KUALA LUMPUR – The federal government will meet the Sarawak state government to detail the scope of cooperation between Petroleum Sarawak Bhd (Petros) and Petroliam Nasional Bhd (Petronas), said Prime Minister Datuk Seri Anwar Ibrahim.
He said the discussion is to explore the cooperation to be undertaken by both companies involving any new projects in any field, Bernama reported.
“The agreement reached (so far) between me, representing the Government of Malaysia and Sarawak Premier (Tan Sri Abang Johari Tun Openg) is to acknowledge all legal matters.
“I, together with Deputy Prime Minister Datuk Seri Fadilah Yusof, will contact the Sarawak Government, and if possible, we will call for a meeting to hear their proposals. I think the best solution will be achieved,” he said at a press conference at the MADANI Government 2025 Ministerial Retreat here today.
Anwar said the federal government acknowledged Sarawak’s state-level aspirations to engage in the oil and gas (O&G) industry during a Dewan Rakyat briefing session on Monday.
He said this aspiration is enshrined in the Gas Distribution Ordinance 2016 (Amendment) (DGO), which will come into effect on March 1, 2025.
“The DGO, when read together with the Petroleum Development Act 1974 (PDA), stipulates that Petros will act as an aggregator in Sarawak,” he said.
Anwar, who is also the Finance Minister, said this role nevertheless maintains prior approvals granted to Petronas and its subsidiaries.
Abang Johari welcomed this, stating that Petros’ participation in the oil and gas sector is part of Sarawak’s efforts to move forward to be part of the entire economic ecosystem based on the principle of cooperation.
“We are not stingy. What we have, we share. Petronas and Petros must cooperate,” he said.
The discussion on Petros-Petronas cooperation comes as the industry faces turbulence following the abrupt cancellation of multiple engineering, procurement, and construction (EPC) tenders for Thailand’s PTTEP-led Lang Lebah gas project offshore Sarawak.
That the project’s final investment decision (FID) has now been delayed until at least 2026, with commercial bids exceeding the budget by over US$1 billion.
Touted as the largest gas discovery in PTTEP’s history, Lang Lebah contains an estimated six to seven trillion cubic feet (Tcf) of gas and was expected to be a key growth driver for the company’s Malaysian portfolio.
However, the sudden suspension of the project has sent shockwaves through the industry, with frustrated bidders citing millions spent on the bid process. A PTTEP official confirmed that the company is now re-engineering the project to optimise costs.
Petronas-Petros tensions an underlying factor?
While PTTEP attributes the delay to cost overruns, industry observers point to long-standing tensions between Petronas and Sarawak’s state-owned Petros as a key factor impacting the project’s viability.
Previously, the executive director of Big Boom Media, which publishes Scoop, Datuk Ahirudin Attan, wrote that the Petronas-Petros rivalry is deterring foreign investors and jeopardising large-scale developments.
He warned that without intervention from Anwar, the fallout could be disastrous for Malaysia’s oil and gas industry, as projects like Lang Lebah were expected to generate billions in revenue, create thousands of high-skilled jobs, and provide spin-off opportunities for local companies. – February 23, 2025