KUALA LUMPUR — Petroleum Sarawak’s (Petros) role as gas aggregator in the East Malaysian state will not affect national oil company Petronas’ existing domestic contracts, Prime Minister Datuk Seri Anwar Ibrahim said today, in outlining the points of agreement reached between Putrajaya and the Sarawak government on both entities.
He told the Dewan Rakyat the federal and state governments have agreed to recognise federal law in the Petroleum Development Act 1974, as well as Sarawak’s own Distribution of Gas Ordinance (DGO) 2016, and both laws read together allow Petros to play the role of gas aggregator in the state.
“This role still validates previous approvals for Petronas and the company’s subsidiaries. This means that Petronas will maintain all existing domestic and international contractual obligations,” Anwar, who is also the Finance Minister, said in a ministerial statement on Petronas and Petros.
The two entities have appeared to be at odds recently, with a lawsuit by Petros against the national oil company in the courts over alleged breaches of Sarawak laws governing the state’s own oil and gas sector.
Anwar added that Putrajaya and Sarawak also agreed that Petros and Petronas would work together as partners for the interests and revenue of both the country and the state.
In that spirit, subsequent negotiations are to be held for the mutual benefit of both parties using commercial principles and in a transparent manner, he said.
For Petros, it maintains its right under the DGO to obtain up to 1.2 billion cubic feet of natural gas a day for Sarawak’s domestic needs, with a guarantee of additional amounts based on future needs.
“PETROS also has the authority to expand new activities and take advantage of its cooperation with Petronas,” Anwar added.
He also highlighted the benefits, development and jobs Petronas has brought to Sarawakians, noting its total investments and infrastructure in the state of more than RM280 billion since 1976.
In the last decade, since 2014, Petronas had spent over RM90 billion in contracts for upstream investments, while Sarawak vendor companies secured contracts worth over RM40 billion.
In terms of financial return, Sarawak has also received cash payments of RM49 billion as of last December, sales tax payments of RM18.66 billion as at the third quarter of last year, and dividends of Rm28.6 billion as of December.
Petronas also contributed directly to the human capital development of Sarawakians through education initiatives, scholarships, training programmes and over 4,300 job opportunities with the national oil company. – February 17, 2025