Federal govt to be updated on measures taken by state in regulating O&G industry – CM

Abang Johari making his way to officiate the industry engagement with the oil and gas companies in Sarawak held at a leading hotel here today. – Photo by Muhammad Rais Sanusi

Abang Johari having a light moment with several representatives from the oil and gas companies before leaving the event. – Photo by Muhammad Rais Sanusi

KUCHING: The state government will continuously update the federal government and its agencies on the measures taken by the state in regulating the oil and gas (O&G) industry in accordance with state laws.

Chief Minister Datuk Patinggi Abang Johari Tun Openg further assured that in the enforcement of the laws, the state will be fair and conducive to improving investor confidence in its oil and gas industry.

“The state government will not encroach into areas which are under the constitutional authority of the federal government and will work with the federal government and Petronas to ensure that the oil and gas industry will continue to grow in Malaysia and contribute to the economic success of our nation,” he pointed out.

He was confident that the industry players know well that the Sarawak state government has always been investment-friendly, and welcome investments including foreign participations in the state territorial waters such as Shell Company Ltd which has been around for centuries on Sarawak shores.

Abang Johari highlighted this in his keynote address at the industry engagement with the oil and gas companies in Sarawak held at a leading hotel here today.

The engagement was attended by a large group of representatives from the oil and gas sector across Sarawak to better understand the regulatory and basic procedures of oil and gas industry in Sarawak.

“When it comes to foreign participations in our oil and gas sector, you may have come across some irresponsible social media scare-mongering about their presence in the state, saying that Petronas are selling our state sovereignty,” he shared.

“I know that, well-informed and well educated audience here this morning will recognise what baseless nonsense this is. Rest assure, my administration will never sacrifice an inch of our state sovereignty,” he refuted.

Moving on, Abang Johari said he was equally upbeat about the prospects of high value downstream activities continue growing in the years to come here in Sarawak.

“This view of mine may be a contrary to my present efforts for going upstream via the formation of Petros,” he said.

Petros, he continued, is expected to work alongside with Petronas as co-regulator of oil and gas assets on Sarawak shores as well as in its continental shelf, thus including the Exclusive Economic Zone (EEZ).

“Petros will not undertake exploration activities. Again, Petros will be a co-regulator. I therefore wish to see more Sarawakian oil and gas companies to explore towards high value added downstream opportunities in order to sustain over the longer term spectrum,” he added.

To prepare for the future, he assured that the state government will continue to work with all relevant stakeholders to preserve existing value and open up more opportunities within the industry.

“Having said that, nonetheless, it is not all gloom and doom for local Sarawakian oil and gas upstream companies specifically,” he said.

“Petros have been granted rights to mine oil and natural gas in the state and such a licence has already been issued to Petros. In performing its mandated roles, the state has delegated its oil and gas regulatory and supervisory authority to Petros,” he elaborated.

To ensure that Petros performs its mandated roles in a prudent manner, he emphasised that it is required to seek guidance from the Sarawak government for broad policy direction in the execution of its strategic roles and responsibilities.

“Once all things is in place, Petros will open up doors of opportunities to serious and competent Sarawakian contractors and their partners for new and upcoming Production Sharing Contracts (PSC) in a transparent and openness manner,” he said of the contracts which were typically meant for upstream sectors.

He expressed optimism that Petros would definitely provide a boost to any Malaysian and aspiring Sarawakian upstream service providers.

“This is the Sarawak we are forging. A state that fully grasps the possibilities of the economy of the future, and is embracing them as we speak. Where transparency and efficiency will be our watchwords in both the public and the private sectors,” he concluded.

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