Latest news with #KhairulAkmalJasni
CNA
02-05-2025
- Business
- CNA
Petronas unit flouting Sarawak law, says state government as row deepens
KUALA LUMPUR: The Sarawak state government has accused national oil corporation Petroliam Nasional Bhd (Petronas) of flouting its laws, deepening a worsening spat that has already triggered foreign investor disquiet in a sector key to the Malaysian economy. Sarawak's Utilities and Telecommunications Ministry issued a letter on Wednesday (Apr 30) to Petronas Carigali Sdn Bhd, a wholly owned subsidiary of the Malaysian oil giant, stating that it was operating the coastal Miri Crude Oil Terminal (MCOT) facility in the state without a licence, as required under Section 7(e) of its Distribution of Gas Ordinance. According to the unsigned letter addressed to Petronas Carigali's Senior General Manager that was seen by CNA, Petronas Carigali has been given 21 days to obtain a licence or risk being slapped with an undisclosed financial penalty by the Sarawak state government. The letter also referred to three earlier correspondences - first in December 2023, then in February and August last year - suggesting that the licensing issue at the terminal has been brewing for some time. Section 7(e) of the Distribution Gas Ordinance stipulates that any 'operator of a building, managing or maintaining gas pipeline or other apparatus or equipment or mechanism for the distribution of gas' must be licensed. Petronas has yet to respond to CNA's request for comment. Sarawak's move was first reported on Friday by Malay language daily Utusan Malaysia. Senior industry executives with close ties with the oil giant noted that the latest Sarawak directive was tantamount to an open challenge by the state to the decades-old monopoly Petronas has held since it was incorporated under a parliamentary statute in 1974 known as the Petroleum Development Act or PDA. The PDA, among other things, decrees that the national oil corporation is the sole guardian of the nation's hydrocarbon reserves. Sarawak, with probable and proven reserves of petroleum representing 60.87 per cent of Malaysia total reserves and accounting for 90 per cent Malaysia's liquified natural gas (LNG) exports, is insisting that PDA does not apply to the state. It also wants greater control over its resources through wholly owned subsidiary Petroleum Sarawak, or Petros. TIT FOR TAT Industry executives are puzzled why Sarawak has trained its guns on MCOT, a facility that the Malaysian state-oil corporation has been operating since 1988, in its increasingly protracted dispute with Petronas. MCOT is located along the Miri coast in Sarawak. The facility acts as a hub for receiving and storing crude oil and natural gas from offshore Sarawak fields before they are transported for refining and other purposes. Several have suggested that this was a tit for tat move following allegations that Petros may have engaged in corporate espionage to secure some form of leverage in its face-off with Petronas. Former Petronas manager Khairul Akmal Jasni pleaded not guilty in a Sessions Court in Kuala Lumpur on Apr 18 to charges that he had attempted to leak highly confidential information in June last year on the national oil corporation's inner workings to Petros. Cases of corporate spying are extremely rare in Malaysia and the allegations that Khairul had sought to share a document titled 'Q1 2024 Upstream Business Performance, Operational & Financial' has put Petros and the state government headed by Premier Abang Johari Openg in an awkward situation. Abang Johari's state government is a crucial ally in Prime Minister Anwar Ibrahim's coalition government and the rising tensions with Petronas have strained federal-state ties, analysts have noted. As recently reported by CNA, the confrontation over the control of hydrocarbon resources in the state has also stirred foreign investor unease in the oil and gas sector. In a little-publicised surprise move last month, US oil giant ConocoPhillips decided to withdraw from operating the Salam-Patawali deepwater oil and gas field that the company discovered in 2018 with Petronas in a 50-50 joint-venture that was expected to cost RM13.7 billion (US$3.13 billion). Industry executives noted that the decision was party driven by the increasingly unstable regulatory environment facing contractors operating in Sarawak. Sarawak is disputing the overarching powers Petronas wields under the PDA and wants all the hydrocarbon reserves in the state to be regulated under a colonial-era Oil Mining Ordinance 1958 that stipulates that oil and gas resources found within 200 nautical miles of its waters belong to the state. Both parties have tried to reach a compromise in talks that began sometime in April last year, but talks have broken down twice, with Petronas suspending all negotiations in December, according to executives from the national oil corporation.
CNA
02-05-2025
- Business
- CNA
Sarawak accuses Petronas arm of operating without licence, as dispute between both sides worsens
KUALA LUMPUR: The Sarawak state government has accused national oil corporation Petroliam Nasional Bhd (Petronas) of flouting its laws, deepening a worsening spat that has already triggered foreign investor disquiet in a sector key to the Malaysian economy. Sarawak's Utilities and Telecommunications Ministry issued a letter on Wednesday (Apr 30) to Petronas Carigali Sdn Bhd, a wholly owned subsidiary of the Malaysian oil giant, stating that it was operating the coastal Miri Crude Oil Terminal facility in the state without a licence, as required under Section 7(e) of its Distribution of Gas Ordinance. According to the unsigned letter addressed to Petronas Carigali's Senior General Manager that was seen by CNA, Petronas Carigali has been given 21 days to obtain a licence or risk being slapped with an undisclosed financial penalty by the Sarawak state government. The letter also referred to three earlier correspondences - first in December 2023, then in February and August last year - suggesting that the licensing issue at Miri Crude Terminal has been brewing for some time. Section 7(e) of the Distribution Gas Ordinance stipulates that any 'operator of a building, managing or maintaining gas pipeline or other apparatus or equipment or mechanism for the distribution of gas' must be licensed. Petronas has yet to respond to CNA's request for comment. Sarawak's move was first reported on Friday by Malay language daily Utusan Malaysia. Senior industry executives with close ties with the oil giant noted that the latest Sarawak directive was tantamount to an open challenge by the state to the decades-old monopoly Petronas has held since it was incorporated under a parliamentary statute in 1974 known as the Petroleum Development Act or PDA. The PDA, among other things, decrees that the national oil corporation is the sole guardian of the nation's hydrocarbon reserves. Sarawak, with probable and proven reserves of petroleum representing 60.87 per cent of Malaysia total reserves and accounting for 90 per cent Malaysia's liquified natural gas (LNG) exports, is insisting that PDA does not apply to the state. It also wants greater control over its resources through wholly owned subsidiary Petroleum Sarawak, or Petros. TIT FOR TAT Industry executives are puzzled why Sarawak has trained its guns on the Miri Crude Oil Terminal (MCOT), a facility that the Malaysian state-oil corporation has been operating since 1988, in its increasingly protracted dispute with Petronas. Miri Crude Oil Terminal is located along the Miri coast in Sarawak. The facility acts as a hub for receiving and storing crude oil and natural gas from offshore Sarawak fields before they are transported for refining and other purposes. Several have suggested that this was a tit for tat move following allegations that Petros may have engaged in corporate espionage to secure some form of leverage in its face-off with Petronas. Former Petronas manager Khairul Akmal Jasni pleaded not guilty in a Sessions Court in Kuala Lumpur on Apr 18 to charges that he had attempted to leak highly confidential information in June last year on the national oil corporation's inner workings to Petros. Cases of corporate spying are extremely rare in Malaysia and the allegations that Khairul had sought to share a document titled 'Q1 2024 Upstream Business Performance, Operational & Financial' has put Petros and the state government headed by Premier Abang Johari Openg in an awkward situation. Abang Johari's state government is a crucial ally in Prime Minister Anwar Ibrahim's coalition government and the rising tensions with Petronas have strained federal-state ties, analysts have noted. FOREIGN INVESTOR UNEASE As recently reported by CNA, the confrontation over the control of hydrocarbon resources in the state has also stirred foreign investor unease in the oil and gas sector. In a little-publicised surprise move last month, US oil giant ConocoPhillips decided to withdraw from operating the Salam-Patawali deepwater oil and gas field that the company discovered in 2018 with Petronas in a 50-50 joint-venture that was expected to cost RM13.7 billion (US$3.13 billion). Industry executives noted that the decision was party driven by the increasingly unstable regulatory environment facing contractors operating in Sarawak. Sarawak is disputing the overarching powers Petronas wields under the PDA and wants all the hydrocarbon reserves in the state to be regulated under a colonial-era Oil Mining Ordinance 1958 that stipulates that oil and gas resources found within 200 nautical miles of its waters belong to the state. Both parties have tried to reach a compromise in talks that began sometime in April last year, but talks have broken down twice, with Petronas suspending all negotiations in December, according to executives from the national oil corporation.
Daily Express
30-04-2025
- Business
- Daily Express
ConocoPhilips quits Sarawak, to focus on Sabah
Published on: Wednesday, April 30, 2025 Published on: Wed, Apr 30, 2025 By: Malay Mail Text Size: The logo of American oil and natural gas exploration and production company ConocoPhillips is seen during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. — Reuters pic Kuala Lumpur: US oil firm ConocoPhillips has unexpectedly withdrawn from operating the Salam-Patawali deepwater oil and gas field off Sarawak's coast, adding to the state's rights dispute with Petronas. The project, discovered jointly with Malaysia's national oil corporation Petronas in 2018, represented a 50-50 joint venture valued at approximately RM13.7 billion (US$3.13 billion). According to Channel News Asia, industry sources close to ConocoPhillips confirmed the withdrawal, attributing it to a 'country strategy review' without providing further details. Attempts to reach company executives at their Kuala Lumpur office were unsuccessful. According to multiple industry executives, the decision was partially motivated by regulatory uncertainties stemming from the ongoing dispute between Petronas and the Sarawak Government led by Premier Tun Abang Johari Openg. The Sarawak Government, which owns the oil and gas firm Petroleum Sarawak (Petros), has been asserting greater control over its natural resources. CNA reported that this stance has created discomfort among foreign companies operating in the region, who view Petronas — typically their joint-venture partner in exploration projects — as being under significant pressure in Sarawak. ConocoPhillips will reportedly now focus its operations in neighboring Sabah, where it already maintains a presence. As of April 2024, ConocoPhillips maintained exploration, development, and production activities across approximately 2.7 million net acres in Malaysia, with working interests in six production sharing contracts. The Salam-Patawali exploration block encompasses 300,000 net acres primarily in the Salam and Benum fields off southern Sarawak, where the company had recently conducted a 3D seismic survey in 2023 with ongoing data processing and evaluation. He withdrawal comes amid other developments in Sarawak's energy sector. Thailand's PTTEP, which holds a 42.5 per cent share in the Lang Lebah gas project off Sarawak's shore, is reportedly re-engineering the US$6 billion project 'to improve economic viability.' Sources told CNA that PTTEP has temporarily suspended development activities and postponed final decision-making until next year. Beyond affecting foreign investment, the Petronas-Sarawak dispute has led to allegations of corporate espionage. Former Petronas manager Khairul Akmal Jasni recently pleaded not guilty to charges of attempting to leak confidential information about the national oil corporation to Petros. This rare case of alleged corporate spying highlights the increasing stakes in Sarawak's efforts to challenge Petronas's monopoly. These developments are creating pressure on Prime Minister Datuk Seri Anwar Ibrahim to facilitate a resolution between Sarawak and Petronas, particularly as Malaysia faces economic headwinds from global trade uncertainties. A senior aide to the PM confirmed that Anwar had been briefed on the dispute but indicated that both parties remain firm in their positions, with a senior Petronas official similarly confirming that negotiations have stalled. The core of the conflict centers on Sarawak's challenge to Petronas's decades-old monopoly established under the 1974 Petroleum Development Act (PDA), which designates the national corporation as the sole guardian of Malaysia's hydrocarbon reserves. Sarawak, which accounts for over 60 per cent of Malaysia's petroleum reserves and 90 per cent of its LNG exports, argues that the PDA does not apply to the state and instead advocates for regulation under the colonial-era Oil Mining Ordinance 1958, which would grant the state ownership of resources within 200 nautical miles of its waters. ConocoPhillips' withdrawal represents a significant economic setback for Sarawak. While the exact investment to date in the Salam-Patawali field remains unclear, industry sources had projected development costs at RM13.7 billion, with production expected to peak in 2028 and operations continuing until 2067. ConocoPhillips also operates the SK304 block in Sarawak, encompassing 1.1 million net acres, though exploration there remains at the feasibility stage. The dispute has already spawned legal challenges. Petros filed suit against Petronas in the Kuching High Court in October, contesting a RM7.05 million payment demand related to a 2019 gas sales agreement. Petros argues the agreement is 'illegal and void' because Petronas failed to obtain necessary licensing under Sarawak's Distribution and Gas Ordinance. Separately, Shell's Malaysian unit obtained an interim court order in January to maintain gas supplies from the Bintulu facility pending resolution of the Petronas-Petros dispute. Industry executives note that while existing petroleum projects in Sarawak remain operational, the ongoing conflict could significantly dampen investor confidence in the state's oil and gas sector. They point out that Petros, formed in 2017, lacks the technological expertise and international experience of Petronas's exploration arm, Carigali. According to one Malaysian engineering executive with close ties to Petronas, 'Petros and the Sarawak-based E&P companies don't have the capabilities yet and that does not make them attractive partners without Petronas in the mix.' Sarawak now faces the immediate challenge of finding a replacement contractor for the Salam-Patawali oil field. * Follow us on Instagram and join our Telegram and/or WhatsApp channel(s) for the latest news you don't want to miss. * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Malay Mail
29-04-2025
- Business
- Malay Mail
ConocoPhillips quits major Sarawak project amid state's row with Petronas
KUALA LUMPUR, April 29 — US oil firm ConocoPhillips has unexpectedly withdrawn from operating the Salam-Patawali deepwater oil and gas field off Sarawak's coast, adding to the state's rights dispute with Petronas. The project, discovered jointly with Malaysia's national oil corporation Petronas in 2018, represented a 50-50 joint venture valued at approximately RM13.7 billion (US$3.13 billion). According to Channel News Asia, industry sources close to ConocoPhillips confirmed the withdrawal, attributing it to a 'country strategy review' without providing further details. Attempts to reach company executives at their Kuala Lumpur office were unsuccessful. According to multiple industry executives, the decision was partially motivated by regulatory uncertainties stemming from the ongoing dispute between Petronas and the Sarawak state government led by Premier Tun Abang Johari Openg. The Sarawak government, which owns the oil and gas firm Petroleum Sarawak (Petros), has been asserting greater control over its natural resources. CNA reported that this stance has created discomfort among foreign companies operating in the region, who view Petronas — typically their joint-venture partner in exploration projects — as being under significant pressure in Sarawak. ConocoPhillips will reportedly now focus its operations in neighboring Sabah, where it already maintains a presence. As of April 2024, ConocoPhillips maintained exploration, development, and production activities across approximately 2.7 million net acres in Malaysia, with working interests in six production sharing contracts. The Salam-Patawali exploration block encompasses 300,000 net acres primarily in the Salam and Benum fields off southern Sarawak, where the company had recently conducted a 3D seismic survey in 2023 with ongoing data processing and evaluation. He withdrawal comes amid other developments in Sarawak's energy sector. Thailand's PTTEP, which holds a 42.5 per cent share in the Lang Lebah gas project off Sarawak's shore, is reportedly re-engineering the US$6 billion project 'to improve economic viability.' Sources told CNA that PTTEP has temporarily suspended development activities and postponed final decision-making until next year. Beyond affecting foreign investment, the Petronas-Sarawak dispute has led to allegations of corporate espionage. Former Petronas manager Khairul Akmal Jasni recently pleaded not guilty to charges of attempting to leak confidential information about the national oil corporation to Petros. This rare case of alleged corporate spying highlights the increasing stakes in Sarawak's efforts to challenge Petronas's monopoly. These developments are creating pressure on Prime Minister Datuk Seri Anwar Ibrahim to facilitate a resolution between Sarawak and Petronas, particularly as Malaysia faces economic headwinds from global trade uncertainties. A senior aide to the PM confirmed that Anwar had been briefed on the dispute but indicated that both parties remain firm in their positions, with a senior Petronas official similarly confirming that negotiations have stalled. The core of the conflict centers on Sarawak's challenge to Petronas's decades-old monopoly established under the 1974 Petroleum Development Act (PDA), which designates the national corporation as the sole guardian of Malaysia's hydrocarbon reserves. Sarawak, which accounts for over 60 per cent of Malaysia's petroleum reserves and 90 per cent of its LNG exports, argues that the PDA does not apply to the state and instead advocates for regulation under the colonial-era Oil Mining Ordinance 1958, which would grant the state ownership of resources within 200 nautical miles of its waters. ConocoPhillips' withdrawal represents a significant economic setback for Sarawak. While the exact investment to date in the Salam-Patawali field remains unclear, industry sources had projected development costs at RM13.7 billion, with production expected to peak in 2028 and operations continuing until 2067. ConocoPhillips also operates the SK304 block in Sarawak, encompassing 1.1 million net acres, though exploration there remains at the feasibility stage. The dispute has already spawned legal challenges. Petros filed suit against Petronas in the Kuching High Court in October, contesting a RM7.05 million payment demand related to a 2019 gas sales agreement. Petros argues the agreement is 'illegal and void' because Petronas failed to obtain necessary licensing under Sarawak's Distribution and Gas Ordinance. Separately, Shell's Malaysian unit obtained an interim court order in January to maintain gas supplies from the Bintulu facility pending resolution of the Petronas-Petros dispute. Industry executives note that while existing petroleum projects in Sarawak remain operational, the ongoing conflict could significantly dampen investor confidence in the state's oil and gas sector. They point out that Petros, formed in 2017, lacks the technological expertise and international experience of Petronas's exploration arm, Carigali. According to one Malaysian engineering executive with close ties to Petronas, 'Petros and the Sarawak-based E&P companies don't have the capabilities yet and that does not make them attractive partners without Petronas in the mix.' Sarawak now faces the immediate challenge of finding a replacement contractor for the Salam-Patawali oil field.
