Senator: Sarawak's O&G rights protected by state laws, not overridden by PDA 1974

Borneo Post

a day ago

Ahmad says the PDA 1974 is 'not a shield of immunity' that overrides existing Sarawak laws such as the OMO 1958 which have been in place before the formation of Malaysia. – Bernama photo
KUCHING (Aug 13): Pasir Gudang MP Hassan Abdul Karim's remarks on Sarawak's oil and gas jurisdiction are one-sided and ignore the governing laws that have been in force since the formation of Malaysia, said Senator Datuk Ahmad Ibrahim.
Ahmad said the Petroleum Development Act (PDA) 1974 is 'not a shield of immunity' that overrides existing Sarawak laws such as the Oil Mining Ordinance (OMO) 1958 which have been in place before the formation of Malaysia.
'Firstly, Sarawak has been producing oil and gas since the discovery of oil in Miri in 1910—53 years before Malaysia was formed. This industry developed under Sarawak's own laws long before the PDA existed.
'Secondly, the Malaysia Agreement 1963 and the Malaysia Act 1963 preserve state laws. Section 73 of the Malaysia Act 1963 preserves all state laws in force before Malaysia, including the OMO 1958 which remain valid today,' he said in a statement today.
In chiding Hassan for saying that Prime Minister Datuk Seri Anwar Ibrahim was wrong to grant Sarawak additional power over the state's oil and gas sector, Ahmad said all MPs need to understand both legal and historical facts before making their remarks public, adding that ignorance of the law is not an excuse.
He said the OMO 1958, which was amended in 2018, grants Sarawak full authority over petroleum licensing onshore and on its continental shelf.
'The PDA 1974 applies fully in states that do not have their own petroleum laws like OMO 1958. In those states, Petronas is the sole aggregator of oil and gas.
'In Sarawak, the PDA cannot override the OMO, the Distribution of Gas Ordinance (DGO) 2016, the Sarawak Land Code, or the State Sales Tax (SST),' said Ahmad.
He said under the DGO 2016, Sarawak has exclusive authority to license and regulate domestic gas distribution, with state-owned Petroleum Sarawak Berhad (Petros) formally recognised by the federal government as the sole gas aggregator for Sarawak's domestic market, excluding liquefied natural gas (LNG).
'Why exclude LNG? LNG is an international export commodity regulated under PDA 1974 due to long-term sales contracts between Petronas and overseas buyers like Japan, Korea and China.
'The 2020 Commercial Settlement Agreement between Sarawak and Petronas retained LNG under Petronas' management to maintain market stability and avoid breaching export contracts, while granting Sarawak full control over the domestic gas market,' he added.
He also pointed out that on March 13, 2020, the High Court upheld Sarawak's right to impose SST on petroleum products, with Petronas withdrawing its appeal and settling the dues.
'To the MP for Pasir Gudang, before politicising on hearsay, acquaint yourself with these legal facts. Sarawak's constitutional, historical, and legal position is not subject to political convenience,' said Ahmad.
In a recent parliamentary reply to Hassan, Minister in the Prime Minister's Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said said the PDA 1974 would remain in force in accordance with existing legal provisions.
She said Petronas had signed two key agreements to strengthen cooperation, namely a Commercial Collaboration Agreement with Sabah, and a Commercial Settlement Agreement with Sarawak.
The agreements outline the framework of commercial cooperation between Petronas and Sabah's SMJ Energy and Sarawak's Petros, she said in her reply. Ahmad Ibrahim lead oil and gas OMO PDA