S’wak now controls its O&G resources


State govt invokes Oil Mining Ordinance 1958 (OMO)to hand over oil mining leases to Petros

Zaidi (left) handing over the mining leases to Bugo (right), witnessed by Abang Johari (second right) and Awang Tengah (second left). — Photo by Roystein Emmor

KUCHING: Sarawak is now in complete control of its onshore oil and gas resources after the state government handed over oil mining leases of two blocks near Miri and Marudi to Petroleum Sarawak Berhad (Petros) last night.

Chief Minister Datuk Patinggi Abang Johari Tun Openg said the lease was awarded based on the Sarawak Oil Mining Ordinance 1958 (OMO) which was never repealed even during the period of the 1969 Proclamation of Emergency.

“The state government is firmly committed to regulate oil mining in the state to protect the interests and aspirations of Sarawakians.

“Tonight, that commitment is exemplified by the issuance of Mining Leases to Petros in respect of two blocks, one in the Adong Kecil West in Miri area, and the other in the Engkabang area South of Marudi.

“This signals the beginning of the state government’s efforts to exercise Sarawak’s constitutional rights to regulate oil mining under the state laws to take complete control over the exploration and production of petroleum in the onshore areas,” he said.

Abang Johari was speaking during the Sarawak Oil and Gas Industry Dinner 2020 held in conjunction with the handing over of the lease at a hotel here.

With issuance of the lease, Abang Johari said Sarawak, through Petros, now has control and legal title to all the oil and natural gas produced in its onshore waters and to select and appoint contractors or enter into ventures with investors to explore and produce the oil and gas from onshore Sarawak.

He said the state government will also have in place a fair and business friendly regulatory framework and environment to attract investors to participate in the development of its oil and gas industry.

Abang Johari assured that the state government through Petros would continue to collaborate with the existing industry players already operating in Sarawak including Petronas and Shell.

“I have been informed that Shell will be relocating the headquarters of its Malaysian operations to Miri. As a result of this effort, nearly 2,000 Shell employees will be resident in Miri.

“Because of this, and the commencement of renewed exploration activities for oil and gas production in the Miri and Marudi areas, the economy of Miri should experience robust growth in the coming years,” he said.

Abang Johari also affirmed that the state government will strengthen the role of Petros in spearheading the state’s enhanced involvement in the oil and gas industry especially in the downstream sectors.

He said these efforts would be geared towards securing for the state adequate natural gas supplies needed to drive the its industrial development agenda, including the establishment of a petrochemical hub, and gas processing plant to enhance security of supply for Liquefied Petroleum Gas (LPG) to meet the increasing demands for LPG in the state.

He said all these initiatives by the state government would ensure greater opportunities for Sarawakians and Sarawak companies to participate and invest in the oil and gas industry and to acquire expertise, knowledge and technology that would contribute to the continued growth and development of the oil and gas industry which would contribute to the economic success of Sarawak and of the nation.

“I am confident that Petros is ready and equipped to play its important role in advancing successfully the policies and objectives of the state government which I have mentioned.

“I ask all of you involved with the oil and gas industry to fully cooperate with Petros towards making the industry grow sustainably in a well-regulated and business friendly environment provided by the state government,” he said.

Also present during the dinner were Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan, Petros chairman Tan Sri Datuk Amar Dr Hamid Bugo, Tourism Minister Datuk Abdul Karim Rahman Hamzah, Assistant Minister in the Chief Minister’s Department Datuk Sharifah Hasidah Sayeed Aman Ghazali and Urban Development and Natural Resources Ministry Permanent Secretary Datu Zaidi Mahdi.