Latest news with #PDA1974
Borneo Post
7 days ago
- Business
- Borneo Post
Sarawak exempted from key PDA provisions under joint declaration, says Premier
Abang Johari said the joint declaration affirms the recognition of Sarawak's executive authority over the distribution of gas within its territory and removes any perceived regulatory uncertainty. – Sarawak Public Communications Unit photo KUCHING (May 28): Sarawak is exempted from certain provisions under the Petroleum Development Act 1974 (PDA 1974) following the signing of the joint declaration between the federal and Sarawak governments on May 21, 2025, said Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg. In his winding-up speech at the Sarawak Legislative Assembly sitting here today, Abang Johari said the joint declaration affirms the recognition of Sarawak's executive authority over the distribution of gas within its territory and removes any perceived regulatory uncertainty. 'This joint declaration reaffirms that Federal and State laws on distribution of gas shall be respected by all persons undertaking the distribution and supply of gas in Sarawak,' he said. Abang Johari also pointed out that Sarawak is not subject to certain requirements under the PDA 1974. 'Federal laws like the Gas Supply Act 1993 do not apply to Sarawak and Sarawak is exempted from the requirements imposed by Section 6(1) and (3) of the Petroleum Development Act 1974 to obtain the permission of the Prime Minister to undertake distribution of gas business in Sarawak,' he said. The Premier extended his appreciation to Prime Minister Dato' Seri Anwar Ibrahim for his leadership and commitment in resolving issues between Petros and Petronas, saying the joint declaration reflected the federal government's recognition of Sarawak's aspirations. 'For the record in this august House, I wish to quote the joint declaration,' said Abang Johari, before reading the full text, which among others confirms the appointment of Petros as the gas aggregator in Sarawak effective March 1, 2025. Under the declaration, Petros' appointment under Section 7A of the Distribution of Gas Ordinance (DGO) 2016 is to be respected by all parties undertaking the business of gas marketing, distribution, and supply in the state. The document also states that Petros and Petronas will cooperate on projects to meet Sarawak's domestic gas needs, including implementing the 1.2 billion standard cubic feet per day (Bscf/d) plan under the Sarawak Gas Roadmap and exploring green energy, hydrogen, and power generation initiatives. 'All discussions on collaborations must be subject to technical and commercial viability. For the purpose of future projects in the State of Sarawak involving international partners, Petronas shall cooperate with Petros,' the declaration read. Abang Johari said with Sarawak's legislative and executive authority over gas distribution confirmed, the state government will ensure regulatory clarity and stability to support industry growth. 'Sarawak will implement plans to increase gas production within its territory, sustainable utilisation of gas by industries, and for the production of clean energy,' he said, adding that this would provide investment opportunities in upstream, midstream and downstream activities. He said these initiatives include the development of carbon capture and storage (CCS) sites to tap into Sarawak's potential gas reserves off its western coast and to support the planned Kuching Low Carbon Gas Hub. 'All these projects will increase the GDP for Sarawak by RM120 billion and create 185,000 high-income jobs,' he said. He also reiterated that Petros, as the state's gas aggregator and resource manager, will play a central role in expanding gas infrastructure, ensuring adequate supply for industrial and domestic use, and developing CCS sites aligned with the state's energy agenda. abang johari DUN joint declaration oil and gas PDA
Borneo Post
17-05-2025
- Business
- Borneo Post
O&G and gridlock: Yet there's political diplomacy in the air!
Photo, taken in Putrajaya earlier this month, shows Abang Johari (right) and Anwar meeting to resolve O&G issues. — Sarawak Public Communications Unit photo THE ongoing debate between Petroliam Nasional Bhd (Petronas) and Petroleum Sarawak Bhd (Petros) regarding oil and gas (O&G) rights in Sarawak centres on differing interpretations of the Malaysian Constitution and the Petroleum Development Act (PDA) 1974. I have opted to sidestep the word 'conflict', which can imply a ruthless power struggle with an emphasis on control and dominance, and it frequently evokes images of a Machiavellian pursuit driven by a desire to assert one's will and gain an upper hand. Using different language allows for a more nuanced and potentially less aggressive understanding of the situation. So, let diplomacy also take its course! The debate surrounding O&G rights between Petronas, Malaysia's national oil company, and Petros, the Sarawak state-owned O&G company, has become a complex arena for political manoeuvring and delicate diplomacy between state and federal leadership. Sarawak's pursuit of greater autonomy over its O&G resources has fuelled tensions, requiring careful negotiation to balance state-level ambitions with national interests and revenue sharing. Scrutinise details with care Sarawakians are generally keeping abreast of the case through media reports. While not actively participating, many are keenly observing and offering support when positive developments occur and occasionally expressing combative remarks when stating displeasure. Familiarising oneself with the pertinent clauses of the PDA 1974 can significantly enhance comprehension of the complexities and debated points surrounding the relationship between Petronas and Petros. Reviewing this legislation will provide a stronger foundation for understanding the nuances of their arguments. This fosters a more critical and analytical mindset among supporters of Sarawak's pursuit of greater control over its O&G resources. This approach motivates individuals to scrutinise details with greater care, fostering deeper insight and a more complete grasp of the subject matter instead of being influenced by hype. Despite the PDA 1974 granting Petronas control over hydrocarbon resources, Sarawak maintains that its constitutional right to govern the land, from which these resources are sourced, remains intact. Sarawak argues that the State Legislative Assembly (DUN) has never formally approved or ratified the PDA 1974, implying its lack of consent to the federal law superseding its land rights, and that the Oil Mining Ordinance (OMO) 1958 is a law that still remains in force today. Full authority under OMO 1958 Therefore, to Sarawak, the OMO 1958 gives Sarawak full regulatory authority over all persons and companies involved in the operations of the oil and gas industry in Sarawak. This was stated emphatically by the Premier of Sarawak Datuk Patinggi Tan Sri Abang Johari Tun Openg as 'a defining factor of legal weightage'. Effective July 1, 2018, Sarawak began enforcing the OMO 1958 and the Gas Distribution Ordinance 2016 via the Sarawak Minerals and Management Authority (SMMA), utilising Petros as the enforcement vehicle. This action followed the recent passage of the Oil Mining (Amendment) Bill 2018 on July 10, 2018, meant to strengthen the legal framework for these enforcement activities. This situation often involves high-level discussions addressing constitutional rights, revenue distribution formulas, and the operational control of O&G fields, all while navigating the politically sensitive landscape of regional identity and resource nationalism. The success of these negotiations is dependent on the ability of both federal and state leaders to engage in constructive dialogue, compromise on competing priorities, and reach agreements that are perceived as equitable and beneficial to Sarawak's development as well as the nation's overall economic well-being. 'More than a legal battle' The notion that a straightforward application of the law could have easily solved the problem reveals a simplistic and concerning passage of thought where it disregards the unavoidable subjectivity present, where legal professionals often disagree and interpretations of the law are constantly debated. The process involves more than just a legal dispute where the winner and loser are determined solely by interpreting the letter of the law and established legal principles. Deeper considerations and a comprehensive grasp of the broader context, including the interwoven relationship between law, power politics and social polity are frequently required in situations like the O&G dispute. Instead of continuing down a combative path, achieving the same goal through a more cooperative approach would have led to a definitive solution. This would have fostered a more positive and collaborative environment moving forward. Essentially, the situation could have shifted from conflict to cooperation, allowing everyone involved to concentrate on productive and beneficial activities. Equitable, balanced discourse Achieving a genuinely equitable and balanced discourse is desirable. Nevertheless, the situation becomes even more challenging when intrinsic power dynamics are involved and serve as a biased determinant. This is especially true when the debate touches upon the complex relationship between federal and state governments, especially now under the ongoing pursuit of some devolutionary powers under the Malaysia Agreement 1963 (MA63) by Sarawak. It is a situation where the subtle, but influential, exertion of power can easily overshadow the merits of the O&G arguments themselves. In essence, a supposedly level playing field can suffer cracks under the existing power structures inherent in the broader framework of federal-state relations. The idea that a team of compliant legal professionals would have swiftly resolved the issue by adhering to the law ignores the complex factors of bias, authority and opposing viewpoints that invariably influence the decision over the O&G controversy. The concept of the law as an objective 'definitive answer' is a misleading and risky idea, masking the human involvement that ultimately influences its use and makes justice inherently uncertain. Sarawak, through Petros, argues for greater control over its natural resources, citing historical agreements and constitutional provisions that predate PDA 1974. Tan Sri Hamid Bugo (second right), the chairman of the Petros board, seen with the senior executives at Petros' historic milestone, which is the first drill at the SK433 Onshore Block in Miri. — Photo courtesy of Petros 'Core of debate' The core of the debate revolves around whether Sarawak's rights were adequately protected under the Federal Constitution and subsequent legislation, and whether Petros' establishment and ambitions to play a more significant role in the O&G sector are legally permissible within the existing framework. This has led to discussions on revenue sharing, regulatory powers, and the overall balance of power between the federal government and the Sarawak state government in managing Sarawak's valuable resources. Watchers and social influencers who are unaware of the case's intricacies and contents may be persuaded to focus on particular contentious issues that arise and allow state feelings to prevail. Politicians who must balance state sentiment with federal power find it to be a touchy subject. The primary point of contention between Petronas and Petros is their divergent interpretations of the PDA 1974 and the scope of Sarawak's rights to its natural resources. One major topic of disagreement is the extent to which the PDA eliminated Sarawak's pre-existing rights to O&G found within its limits. Petros advocated for increased control and engagement in the upstream sector, arguing that the state should benefit more directly from the resources taken from its territory. Another topic of contention concerns revenue sharing and the allocation of earnings from O&G production. Sarawak contends that the MA63, which formed Malaysia, grants it significant control over its O&G resources, a position they argue has been eroded over time by Petronas' dominance. Specifically, Sarawak desires greater control over the exploration, development and production of O&G within its territorial boundaries, seeking a larger share of the revenue generated and a more active role in the management of these resources. The state wants to gain more directly from its natural wealth and assure its long-term development, which has caused conflict with Petronas, which has long had near-exclusive control of Malaysia's O&G sector nationally. The argument, which has escalated into a full-fledged judicial battle, is centred on a struggle for authority and opposing interpretations of who controls natural resources under Malaysia's federal system. In essence, the conflict is over the proper distribution of power and the definition of property rights within the nation's political framework. Delicate equilibrium of authority At its core, the dispute, now a formalised legal contest, centres on the delicate equilibrium of authority and the differing perspectives on who controls natural resources under Malaysia's federal system. The heart of the matter lies in defining the boundaries of power and ownership within the nation's governmental structure. The escalating conflict boils down to disagreements over the distribution of power and how resource ownership is understood within Malaysia's federal framework, now being fought over in the courts. As the legal disputes heat up, the interpretation of constitutional provisions governing natural resources becomes a flashpoint, potentially leading to increased state autonomy demands and a weakening of federal control. Prime Minister Datuk Seri Anwar Ibrahim is walking a fine line in the wake of increasing legal and political complexity. While acknowledging resource-rich governments' valid concerns and the need for equitable accords, he also recognises the critical role that O&G earnings play in national growth and economic stability. PM Anwar's stance must be properly balanced to prevent upsetting the party. A perception of favouritism toward the federal government might stoke more animosity in Sarawak and Sabah, potentially undermining his coalition. Conversely, granting too much autonomy or revenue to Sarawak and Sabah may result in a backlash from other states, weakening the federal government's authority and setting a precedent for future demands. 'View through political lens' PM Anwar is currently in a difficult situation, caught between the competing forces of legal authority and political influence. Meanwhile, Abang Johari maintains a strong stance, resolutely focused on achieving what he believes is best for the state. PM Anwar's decision will inevitably be viewed through a political lens, and any misstep could jeopardise his leadership and the stability of his administration. He must seek a balanced and pragmatic solution that addresses the grievances of the state while safeguarding national interests and maintaining the integrity of the Federal structure. Despite the protracted discussion, political diplomacy has not slipped the notice of the two leaders, PM Anwar and Abang Johari, who have met on multiple occasions to discuss ways to resolve the legal impasse in the O&G issue. * Toman Mamora is 'Tokoh Media Sarawak 2022', recipient of Shell Journalism Gold Award (1996) and AZAM Best Writer Gold Award (1998). He remains true to his decades-long passion for critical writing as he seeks to gain insight into some untold stories of societal value.
Daily Express
16-05-2025
- Business
- Daily Express
Why Sabah PH-BN quiet on these MA63 issues?
Published on: Friday, May 16, 2025 Published on: Fri, May 16, 2025 Text Size: 'Upko and PBRS claim to be bridges to Putrajaya? They are more like pipelines draining Sabah's wealth straight to Kuala Lumpur,' Yong said. Kota Kinabalu: Sabah Progressive Party (SAPP) accused the State's PH-BN coalition of staying silent on important oil and gas lawsuits while Sarawak aggressively challenges Federal laws in court. SAPP Supreme Council member cum Vice Youth Chief, lawyer Yong Yit Jee, dismissed claims by Upko and PBRS that they are securing Sabah's rights. Advertisement 'Sarawak is fighting tooth and nail in court, but Sabah PH-BN is using 'good relations' as an excuse while our resources are taken away,' Yong said. He pointed to the Petroleum Development Act 1974 (PDA1974) and Territorial Sea Act 2012 (TSA2012) as laws that have undermined Sabah and Sarawak's rights under the Malaysia Agreement 1963 (MA63). The criticism comes as Sabah NGO Sabar mounts a legal challenge against TSA2012, a move the Sabah Chief Minister has supported, stating the State does not recognise the law. 'Upko and PBRS claim to be bridges to Putrajaya? They are more like pipelines draining Sabah's wealth straight to Kuala Lumpur,' Yong said. 'Sarawak sues, while Sabah PH-BN settles for handshakes and empty promises,' Yong said, questioning the two parties' impact where they boast about resolving 13 MA63 issues. He called out Upko's Federal minister, Datuk Ewon Benedick, for failing to amend PDA1974 or deliver the promised 40 per cent revenue formula by July 2024. 'It is now May 2025, where is the formula? Where is our money?' Yong said, referring to Ewon's September 2023 announcement. SAPP, which has long opposed PDA1974, TSA2012 and the loss of oil-rich Blocks L and M to Brunei, is now demanding Sabah PH-BN clarify its stance. 'Will they remain Federal puppets or finally stand with Sarawak to reclaim Sabah's full MA63 rights?' he said. * 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
Borneo Post
15-05-2025
- Politics
- Borneo Post
SAPP slams Sabah PH-BN over ‘negotiation excuse'
KOTA KINABALU (May 15): Sabah Progressive Party (SAPP) Supreme Council member cum Vice Youth chief Yong Yit Jee has slammed Sabah's PH-BN coalition for their silence on oil and gas lawsuits, while Sarawak aggressively challenges federal laws – dismissing UPKO/PBRS' claims of securing Sabah's rights as empty rhetoric. 'While Sarawak fights tooth and nail in court, Sabah PH-BN hides behind the excuse of 'good relations' as our resources get plundered,' Yong said, detailing how the Petroleum Development Act 1974 (PDA1974) and Territorial Sea Act 2012 (TSA2012) have systematically eroded Sabah and Sarawak's MA63 rights. The criticism comes amid Sabah NGO SABAR's landmark legal challenge against TSA2012 – a case that the Sabah State Government through Chief Minister has confirmed that Sabah does not recognise TSA2012. 'UPKO and PBRS claim to be bridges to Putrajaya? More like pipelines draining Sabah's wealth straight to Kuala Lumpur,' Yong, a lawyer, fired. Despite UPKO and PBRS boasting about resolving 13 MA63 issues, Yong retorted: 'Sarawak sues while Sabah PH-BN settles for empty smiles at negotiation tables.' The SAPP leader specifically called out UPKO's federal minister Datuk Ewon Benedick: 'No effort to amend PDA1974 in Cabinet. No sign of the 40% revenue formula promised by July 2024. We're now in May 2025 – where's the formula? where's our money?' referencing Ewon's September 2023 announcement. Yong challenged UPKO and PBRS to prove their commitment by pressuring the federal government to drop its appeal against the Sabah Law Society's case on Sabah's 40% revenue rights. SAPP, with a decades-long record of fighting PDA1974, TSA2012 and for the 40% tax revenue – including opposing the giveaway of oil-rich Blocks L and M to Brunei – now demands Sabah PH-BN declare their true allegiance: 'Will they remain federal puppets, or finally stand with Sarawak to reclaim Sabah's full MA63 rights?' Ewon and PBRS president Datuk Arthur Joseph Kurup have recently issued a joint statement stating that as members of the current national political coalition, their parties see themselves as 'Sabah's bridge to Putrajaya,' working alongside other parties to consistently raise key issues affecting the state, including the MA63. 'The 'Sabah First' struggle requires cooperation among all political parties in the state. This must be achieved through wise and consultative engagement between the federal and state governments, not through confrontation,' they said. Ewon and Arthur added that both UPKO and PBRS have raised numerous Sabah-related issues through their coalition platforms, including at the Cabinet level which they said has proven effective, with nine MA63-related demands fulfilled under the current federal government, while four were resolved under the previous administration.
Borneo Post
03-05-2025
- Business
- Borneo Post
Petronas–Sarawak dispute could undermine investor confidence, LNG exports, analysts warn
Azmi says that any disputes raised would only be detrimental to all parties involved, namely the federal government, the Sarawak government, Petronas and Petros. — Bernama photo KUALA LUMPUR (May 3): The Sarawak government should respect the agreement with the federal government as outlined in the Petroleum Development Act 1974 (PDA 1974), instead of creating disputes involving the operations of Petronas Carigali Sdn Bhd (PCSB) at the Miri Crude Oil Terminal, according to an analyst. Dr Azmi Hassan, a geostrategist from the Nusantara Academy for Strategic Research, said that any disputes raised would only be detrimental to all parties involved, namely the federal government, the Sarawak government, Petroliam Nasional Bhd (Petronas) and Petroleum Sarawak Bhd (Petros). 'Petronas has operated in Sarawak for decades, so why are they being 'disturbed' now when the provisions in the PDA are clear? Such interference creates legal complications and, in this case, affects foreign investor confidence. 'It undermines the positive perception of foreign investors, and we're now seeing the consequences – US oil firm ConocoPhillips has reportedly announced its withdrawal from a project in Sarawak,' said the National Professors Council Fellow. Media reports previously stated that ConocoPhillips had withdrawn from operating the deepwater Salam-Patawali oil and gas project off Sarawak, worth an estimated RM13.7 billion (US$3.13 billion). The report also alleged that the decision to pull out was driven by regulatory uncertainty stemming from ongoing disputes between Petronas and the Sarawak government. Commenting further, Azmi said that if the issue remains unresolved, it risks greater losses for the country through missed collaboration opportunities with global oil and gas giants such as Shell and ExxonMobil in Sarawak. Yesterday, Petronas confirmed to Bernama that its subsidiary PCSB had received a notice from the Sarawak Ministry of Utility and Telecommunication last Wednesday related to gas processing and distribution. The national oil company told Bernama that PCSB is legally authorised under the PDA 1974 to conduct its activities and has complied with all applicable laws. Meanwhile, Universiti Malaya sociopolitical analyst Datuk Prof Dr Awang Azman Awang Pawi said the Sarawak government is clearly asserting a different interpretation based on state rights as stipulated in the Malaysia Agreement 1963 (MA63), even though the PDA 1974 remains a recognised federal law. He said no formal breach has occurred so far, as there has been no court ruling or announcement of the cancellation of the joint agreement. 'However, Sarawak's issuance of a notice and enforcement action constitutes a direct challenge to Petronas' exclusive authority under the PDA 1974, which has been the foundation of Malaysia's oil and gas industry model for nearly 50 years,' he said. He added that the issue is not only legal in nature but also a test of Malaysia's federalism, particularly in the management of natural resources, highlighting differing interpretations of the PDA 1974, MA63 and the Oil Mining Ordinance 1958 (OMO 1958). Awang Azman warned that if not wisely handled through joint negotiations or legal review, this could lead to a trust crisis between the federal and state governments, negatively impact investments, and weaken the national energy strategy. At the same time, he said any disruption to Petronas' exploration and production activities in Sarawak would have more serious effects on the national oil and gas industry, including potential disruptions to both national and global supply chains. This is because Sarawak is Malaysia's main producer of liquefied natural gas (LNG), and any disruption to Petronas' operations in the state could jeopardise exports and long-term contractual commitments to countries such as Japan and South Korea, he said. He said an open conflict between the state government and Petronas may cause international investors to view Malaysia as a risky investment destination in policy and legal aspects. 'It also raises the risk of dual power structures. If Petronas adheres to federal law while Sarawak enforces state law, it creates legal ambiguity that necessitates either a federal-state legal resolution or court action,' he said. Awang Azman added that the conflict could also hinder cooperation talks between Petros and Petronas, ultimately delaying strategic investments such as new gas field developments and energy infrastructure. – Bernama gas investment lead oil PDA 1974 Petronas sarawak
