Petronas-Petros issues to be ironed out

The Sun

11-05-2025

PETALING JAYA: The federal government and the Sarawak administration have agreed to iron out all lingering issues between national oil giant Petronas and Sarawak's state-owned energy company Petroleum Sarawak Bhd (Petros) through direct negotiations.
The breakthrough came during a high-level meeting chaired by Prime Minister Datuk Seri Anwar Ibrahim on Thursday at Perdana Putra, during which he met Sarawak Premier Tan Sri Abang Johari Abang Openg.
Senior representatives from both Petronas and Petros were also present.
In a statement, the Prime Minister's Office said both parties agreed to swiftly finalise a set of guiding principles aimed at fostering clearer coordination and paving the way for more effective collaboration between the two energy firms.
The move is expected to unlock untapped potential in Malaysia's energy sector, particularly in bolstering the country's capacity to supply commercial energy to Asean markets.
This aligns with both Putrajaya's and Sarawak's broader goals to position Malaysia as a key regional energy hub.
The meeting was described as 'cordial and harmonious', with discussions rooted firmly in the spirit of federalism and mutual respect.
Both Anwar and Abang Johari reaffirmed their shared commitment to resolving outstanding issues through dialogue.
On April 30, Petronas confirmed that its subsidiary, Petronas Carigali Sdn Bhd (PCSB), received a notice from the Sarawak Utility and Telecommunication Ministry on gas processing and distribution activities.
The notice pertained specifically to operations at the Miri Crude Oil Terminal, which the state alleges are being conducted without the requisite licence under the Distribution of Gas Ordinance (DGO) 2016.
The notice stipulates that PCSB had 21 days from the date of issuance to obtain the necessary licence, and failure to comply could result in financial penalties under Section 21A of DGO 2016.
Additionally, PCSB is accused of violating Section 7(e) of DGO 2016, which mandates that any entity constructing, managing or maintaining gas pipelines and related infrastructure must secure a licence.
DGO 2016, with effect from July 1, 2018, has designated Petros as the state's sole gas aggregator.
The role entails the procurement, distribution and maintenance of the gas supply network in Sarawak.
The appointment of Petros as the sole aggregator is part of Sarawak's broader initiative to assert greater control over its natural resources.
In response to the notice, Petronas has stated that its subsidiary operates under federal law and complies with all applicable regulations. The company has expressed its commitment to constructive engagement with both federal and state governments to ensure regulatory clarity and operational continuity.
Petros was established on Aug 7, 2017 as a wholly state-owned oil and gas company.
The initiative formed part of Sarawak's strategy to enhance control of its resources, drawing upon its constitutional rights under the State List of the Ninth Schedule of the Federal Constitution.
Sarawak's stance is also shaped by the Malaysia Agreement 1963 (MA63).
The state government contends that certain rights enshrined in MA63, particularly those relating to natural resource management, have been eroded over time and is seeking their restoration.
Should the negotiations prove successful, the Petronas–Petros collaboration could become a pivotal force in unlocking Sarawak's energy potential, while also strengthening federal-state cooperation.