Alas, an amicable solution has been achieved between PETRONAS and PETROS on the downstream activities of oil and gas in Sarawak. The news of the joint declaration (JD) between PETRONAS and PETROS was made by both the Prime Minister YAB Prime Minister Dato’ Seri Anwar Ibrahim and Premier of Sarawak YAB Datuk Patinggi Tan Sri (Dr) Abang Abdul Rahman Zohari Tun Datuk Abang Openg in Putrajaya on Wednesday.
And today, the Premier called for a press conference to further clarified the content of the JD to the media at the Sarawak Legislative Assembly complex.
The Premier said Sarawak was committed to working closely with the federal government, PETRONAS and PETROS to implement the collaborative framework outlined in the JD in the spirit of federalism.
“This sets in motion a strategic shift towards realising Sarawak's gas potential, advancing the Sarawak Gas Roadmap and accelerating the transition to a cleaner and more sustainable energy future, in line with the aspiration of Sarawak to be the energy hub in the Asean region," the Premier said.
It must be stressed that the JD signed by Prime Minister and the Premier in Putrajaya on Wednesday (May 21), affirmed that all federal and Sarawak State laws relating to distribution of gas in Sarawak will co-exist and be respected by all parties involved in such activities, including PETRONAS and PETROS.
It also recognised PETROS as the gas aggregator in Sarawak, while Petronas would continue its functions and activities under the Petroleum Development Act 1974. And all existing liquefied natural gas (LNG) contract committed by PETRONAS will be honoured.
As such, Abang Johari welcomed the declaration as a clear manifestation of mutual respect and recognition of Sarawak’s regulatory framework, particularly the Distribution of Gas Ordinance (DGO) 2016.
“This joint declaration shows that Sarawak’s rights are respected and that real progress comes from genuine partnership and mutual trust,” said the Premier.
With the JD, PETROS has been recognised as the sole aggregator of oil and gas in Sarawak based on Sarawak’s DGO 2016.
The JD has also reaffirmed that both Federal and Sarawak State laws must coexist in harmony and be respected by all parties. And this is crucial for the country’s economy as well as for Sarawak’s own development agenda based on the Post-Covid Development Strategy (PCDS) 2030 with the aim of ensuring Sarawak to attain a developed status by 2030.
“Therefore, all parties undertaking the business of marketing, distribution and supply of gas to consumers in Sarawak ought to comply with the DGO 2016,” the Premier asserted.
The Premier asserted that those undertaking businesses related to gas need to be licenced. However, PETRONAS being a national company will be given exemption if they applied.
He added that the authority to issue licences and grant exemptions’ lies with the Ministry of Utility and Telecommunications (MUT).
Commenting on the JD, Deputy Minister of Utilities (Sarawak Energy Berhad and Petros) Dato Ibrahim Baki, said it marked a significant milestone in the evolving partnership between Sarawak and the Federal Government in the spirit of federalism and national interest.
Ibrahim said, this is a testament of the commitment from the Prime Minister on behalf of the Federal Government to honour the aspirations and constitutional rights of Sarawak as enshrined under the federal Constitution, the Malaysia Agreement 1963 (MA63) and the Inter-Governmental Committee Report (IGC).
Ibrahim reiterated that the Sarawak Government considered the JD as a clear manifestation of mutual respect an recognition of Sarawak’s regulatory framework, particularly the DGO 2016.
“This is also a testament to the wisdom of the Right Honourable Prime Minister and the Premier”.
“The JD reaffirms our position that both Federal and Sarawak State laws must coexist in harmony and be respected by all parties. I this case, all oil and gas companies operating in Sarawak needs to apply for a licence including PETRONAS. However, in the base of PETRONAS, the national oil corporation, will be exempted from obtaining the licence upon request. This is part of the understanding reached in the JD.
Ibrahim also disclosed that so far, the Sarawak government has issued 14 licenses to upstream industry players and 537 licenses to downstream industry players under the Gas Distribution Ordinance (DGO) 2016 to operate in the state. These licences were issued since the DGO 2016 (Amendment Bill) in 2023.
“Our ministry has also implemented several regulatory measures, namely issuing 10 non-compliance notices to parties carrying out gas distribution activities that operate without a license,” he said at the First Sitting of the Fourth Term of the 19th Sarawak State Legislative Assembly, here yesterday.
Ibrahim explained that there are seven types of licences issued under the DGO (Amendment) 2016. These include the importation of any gas for the purpose of ‘regasification’, processing, treatment, separation, use or distribution in Sarawak.
He also warned that any party who does not have a licence can be fined not exceeding RM20 million for the first offence and 10 times that for subsequent offences under section 21A, DGO 2016.
“This collaborative framework will not only provide certainty and clarity to the oil and gas industry in Sarawak, particularly the recognition of the role of PETROS as the sole gas aggregator in Sarawak.
“Furthermore, it will pave the for further collaboration in the other gas ventures, particularly in the energy space,” he reiterated.
With this JD, Ibrahim is confident that both PETRONAS and PETROS will ink the commercial settlement soonest.-UKAS
