National petroleum corporation looks forward to collaborate with newly launched state O&G company
KUCHING: Petronas, the national petroleum corporation, welcomes the participation of Sarawak’s own petroleum company Petros in the oil and gas sector and looks forward to continue collaborating with the state for mutual benefit.
Petronas said this in a press statement yesterday to congratulate the state for officially launching Petros at a hotel here on Tuesday night.
“Petronas would like to extend its congratulations to the Sarawak government for the successful official launch of Petros,” the statement said.
Petronas also said it is committed to supporting the state’s aspirations to actively participate in the state’s oil and gas industry in line with the current framework of the Petroleum Development Act, 1974.
According to Chief Minister Datuk Patinggi Abang Johari Tun Openg, the Prime Minister Datuk Seri Najib Tun Razak has agreed to return to the state, power that has been inadvertently eroded over the years.
Acting on Najib’s assurance, the Chief Minister announced that the state will assume full regulatory authority over its oil and gas upstream and downstream industry by July.
He said the state will be able to exploit its natural resources of oil and gas under the State List as per the Ninth Schedule of the Federal Constitution.
“The formation of Petroleum Sarawak Berhad (Petros) and the exercising of the constitutional rights under Item 2(c) of the State List and 8(j) of the Federal List as provided in the Ninth Schedule of the Federal Constitution is the outcome of the discussion on devolution of power between the state and federal government. I would like to therefore thank the Prime Minister for agreeing to give back the power that has been inadvertently eroded over the years,” he was quoted as saying at the launch of Petros.
The chief minister added that persons and companies involved in the oil and gas industry in the state must henceforth have the necessary licences, permits, leases and approvals required under either the state’s Oil Mining Ordinance or the Gas Distribution Ordinance.
“In other words, they are required to regularise their operations and activities to comply with all state laws including those relating to the use and occupation of land.”
However, he assured that the enforcement of state laws will not jeopardise the interests or investments of Petronas and other companies already involved in the oil and gas industry in Sarawak.
“But, their business and operational activities must be aligned with our laws and regulations,” he stressed.
Abang Johari said Petros will spearhead the state’s participation in the oil and gas sector which is strategically important to the overall socio-economic development objectives of Sarawak.
“Petros will be granted rights to mine oil and natural gas in the state and be an important player in the upstream oil and gas industry. Given the significant role of Petros in Sarawak’s oil and gas sector, I believe it is important for Petros to be strong, effective and efficient in performing its mandated roles,” he said.
Petros will also be required to seek guidance from the state government for broad policy direction in the execution of its strategic roles and responsibilities.
Abang Johari pointed out that the launching of Petros was a clear testimony that substantial progress had been achieved in the ongoing discussion on devolution of power.
Meanwhile, when interviewed by Astro Awani at his office in Petra Jaya here, Abang Johari said it is only right for the state to comply with the provisions of the Federal Constitution over getting back its rights.
He said under the Ninth Schedule of the Federal Constitution the state has right to issue permits, leases and licences to mine its natural resources.
“The federal government can develop oil fields but subject to Item 2C of the State List, only then corporations like Petronas can start developing oil fields and it is clear that they need licences and permission but this provision has not been implemented.
“They must get permission from the state to do so,” he said, adding that the state needs to have regulatory control over its minerals, particularly oil and gas.
According to Article 4 of the Constitution, if any other laws are inconsistent with the Federal Constitution, then these laws are void.
“If a law is to be changed, the state needs its State Legislative Assembly to move to amend the law,” he said.
“There must equitable allocation of resources to Sarawak and part of the fund is from Petronas.
“Petronas must acknowledge the fact that it has to comply with the state’s laws. Therefore Petronas must consult the state and go through the state before engaging contractors to
mine any oil field in Sarawak,” he said.