Latest news with #PETROS
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Daily Express
21-07-2025
- Business
- Daily Express
Sabah emerging as Malaysia's next frontier of O&G investment
Published on: Monday, July 21, 2025 Published on: Mon, Jul 21, 2025 Text Size: Clearer regulatory frameworks amid rising geopolitical risks are shifting upstream oil and gas investment toward Malaysia with Sabah offering a stable operating environment per analysts. Photo source: PETALING JAYA: Driven by investor-friendly policies and untapped reserves, Sabah is outranking Sarawak as a more appealing destination for foreign direct investment (FDI) in Malaysia's upstream Oil and Gas (O&G) sector, according to industry observers. Sabah is drawing increased interest from international oil companies as geopolitical instability in the Middle East shifts focus toward Malaysia's stable investment climate, said economist Samirul Ariff Othman, an adjunct lecturer at Universiti Teknologi Petronas. Advertisement 'The 2025 Iran-Israel conflict and escalating Red Sea tensions have driven up freight insurance and security costs while disrupting supply chains across the Middle East and North America,' he said, hinting that investors are looking for lower-risk and high-potential alternatives, with Southeast Asia, particularly Malaysia, emerging as a preferred destination. The Sabah advantage Samirul noted that Sabah is better positioned to capitalise on the shifting global investment trends, especially in terms of near-term foreign direct investment (FDI) inflows. "Currently, Sabah is attracting the strongest near-term FDI inflows, followed by Sarawak,' he said, citing that ConocoPhillips' strategic shift from Sarawak to Sabah indicates the untapped potential of North Borneo's deepwater blocks. Samirul also pointed out that while the Langkasuka basin off Peninsular Malaysia's west coast is generating investor interest, monetisation through commercial development may be slow due to the lack of existing pipelines and processing facilities, as compared to the more developed infrastructure found in other basins, including that of Sabah. 'With ongoing studies in Blocks SB409 and SB310, and Kota Belud's redevelopment, Sabah is set to gain momentum in the second half of 2025,' he said. Regulatory roadblocks in Sarawak Commenting on the competitive landscape in East Malaysia, Samirul observed that while Sarawak has strong LNG infrastructure and active basins such as the SK318 and SK408 gas blocks, regulatory uncertainty involving national oil company PETRONAS and the state-owned PETROS continues to undermine investor confidence. "The overlapping authority between state and federal regulators has created a legal and fiscal limbo at the same time. Investors want clarity, not confusion. Until we resolve these jurisdictional ambiguities, billion-dollar projects will remain stuck at the drawing board," Samirul cautioned. 'While Sarawak's state oil company PETROS has bolstered its role in managing upstream resources, overlapping jurisdictions have added ambiguity in fiscal split and licensing processes.' In May, the federal and Sarawak governments announced a high-level agreement granting PETROS a bigger role as the state's gas aggregator. However, both entities are still engaged in negotiations over legal frameworks, operational control, and commercial terms, with unresolved complexities still hampering progress. Echoing this, Dr. Tricia Yeoh, associate professor at University of Nottingham Malaysia, remarked that Prime Minister Anwar Ibrahim's announcement of a broad agreement reached in February this year with Sarawak Premier Abang Johari Openg did little to resolve the prolonged regulatory ambiguity. "With PETRONAS and PETROS still locked in legal proceedings over an RM8 million bank guarantee in addition to the lack of regulatory clarity, investor confidence remains questionable," she said, hoping that both parties should jointly withdraw the suit and establish a clear, forward-looking partnership. The good news is that there is one positive takeaway from the announcement - all existing PETRONAS contracts with third parties will remain honoured. "However, this assurance still comes short of resolving the broader ambiguities surrounding the Petronas-Petros relationship as the statement does not address Sarawak's claim to resources over 200 nautical miles of its territorial waters, for instance,' Yeoh said, referring to Anwar's speech in the Dewan Rakyat on Feb 17 and a media statement issued by Abang Johari the following day. Yeoh stressed that the federal government should clearly outline the conditions for exceptions or carve-outs granted to individual states. 'If the unclear and confusing situation drags on, it is not helping our national O&G development,' she warned, calling for a joint committee compromising legal, financial and technical representatives from the federal and state governments - to work out a solution. 'With a clear direction in place, the nation can then move forward constructively,' she said. Production Sharing Contract (PSC) By the same token, Samirul favours the idea of creating a more competitive environment through a clearly defined regulatory framework governing the Production Sharing Contract (PSC). "Faster PSC approvals and better regulatory clarity in East Malaysia is needed to sustain FDI momentum through 2026 and beyond," he emphasised. Nevertheless, he acknowledges that Malaysia's PSC remains regionally competitive as compared to that of Indonesia and Vietnam where operators enjoy relatively low oil and gas royalties i.e. 5% to the federal government and 5% to state government - out of a 10% split - with up to 70% of cost recovery. PETRONAS to strengthen partnership Despite regulatory friction, PETRONAS continues to fortify its global ties with energy giants like ConocoPhillips, TotalEnergies, Eni, and Idemitsu, including upstream joint ventures in Indonesia. Commenting this, Samirul said: 'With global upstream costs rising due to inflation, supply chain bottlenecks, and deeper offshore exploration needs, joint ventures have become an essential risk mitigation strategy." "By pooling resources, companies can distribute exploration costs, mitigate capital risk, and combine cutting-edge technologies to make ambitious projects more viable," he pointed this out, wishing for policy and legal frameworks to catch up with investor expectations. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * 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
Focus Malaysia
25-06-2025
- Politics
- Focus Malaysia
Activist to Abang Jo: Use special state assembly sitting to push forth Sarawak's autonomy agenda
PROMINENT Sarawakian rights activist Peter John Jaban has urged the state's Premier Tan Sri Abang Johari Abang Openg (Abang Jo) and the Sarawak state assembly to declare the Sarawak's full autonomy within the terms of the Malaysia Agreement 1963 (MA63) during a special sitting on July 7. Responding to speculation in the media that the sitting will focus specifically on electoral reforms, the Global Human Rights Federation (GHRF) deputy president believes that Sarawak would be better served by unilaterally declaring the autonomy it was promised when the state agreed to be part of Malaysia in 1963. 'Although the MA63 special Cabinet Committee has been in place since 2018, the matter pertaining to our autonomy has been dragged out in discussions with Putra Jaya for long enough,' lamented Jaban in a statement. 'The push to provide redress of the historical loss of seats in the Federal parliament and most importantly, the veto power of the Borneo states as enshrined in MA63, is non-negotiable.' As it is, the Sarawak state government under Abang Jo's leadership has begun to reclaim Sarawak's primacy in the form of own education, healthcare, infrastructure development and the petroleum sector (through the formation of state-owned PETROS in July 2017). 'I now hope that our Premier will maximise this opportunity of a special sitting to build on the work he has already put in place to allow Sarawak to stand on its own two feet,' suggested the Malaysian Action for Justice & Unity co- founder. 'We applaud his efforts to provide revenue streams, financial institutions an educational and healthcare ecosystem as well as air connectivity through our own airline. 'We're all even fully used to addressing him as Premier now! He has demonstrated the potential, power and purpose of our Sarawak institutions. But it's also the ime to realise the full restitution of Sarawak's rights under MA63. The discussions have continued long enough.' With a bill at in the state assembly to unilaterally declaring the state's autonomy, Jaban is optimistic that the Sarawakian civil service will be able to start putting in place the administrative requirements needed to realise this goal. 'Much work remains to be done – the strengthening of immigration, abolition of the cabotage policy and the Borneonisation of our institutions, to name just a few,' asserted Jaban. 'But we cannot move forward while we are stuck in endless talks. This is why a special parliamentary sitting should not be focused on small outcomes.' – June 25, 2025
Focus Malaysia
06-06-2025
- Business
- Focus Malaysia
Is it more politically correct for PETRONAS to term its 5k headcount downsizing as 'right-sizing'?
THAT PETRONAS intends to right-size its workforce by laying off by 10% or 5,000 staff and freeze recruitment until end-2026 has earned the wrath of PAS information chief Fadhli Shaari who claimed that the power that be is unperturbed so long as it can continue milking the RM32 bil annual dividend. Moreover, the Pasir Mas MP preferred to reason it from the perspective of the PETRONAS- Petroleum Sarawak Bhd (PETROS) feud although he state-owned oil & gas (O&G) giant's president and group CEO Tengku Tan Sri Muhammad Taufik has attributed the drastic measure to slumping global crude oil prices. 'I've raised this issue many times – in Parliament and outside Parliament. On Nov 13 last year, I asked in the House (Dewan Rakyat) about the direction of negotiations between PETRONAS and PETROS,' recounted Fadhli on his Facebook page. 'Minister in the Prime Minister's Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said replied that national interests would be prioritised. 'I've no problem with PETROS but our question is what will happen to PETRONAS after this? Who will defend the 'mother' of all assets in our country? As it is, PETRONAS and PETROS have been locking horns for more than a year now over the role of gas aggregator in the state. A resolution was supposed to have been reached on July 1, 2024 but the deadline was extended to Oct 1, 2024. Yet almost a year later, a resolution still seems elusive. On this account, Sarawak is challenging PETRONAS' hold over Malaysia's O&G reserves as stated in the Petroleum Development Act (PDA) of 1974 which gives the former control of all of Malaysia's hydrocarbon reserves. This is given Sarawak holds about 60% of Malaysia's gas reserves and accounts for 90% of Malaysia's liquefied natural gas (LNG) exports – attributes that have led the state-controlled PETROS to clamour for the sole aggregator's role. Hefty dividend payout Aside from the PETRONAS-PETROS drag, Fadhli also blamed the government's incessant dependency on PETRONAS dividends despite its falling profits, likening such tendency to 'a stupid and rash act akin to slaughtering the goose that lays the golden eggs'. 'What will happen now? The PETRONAS CEO himself said that if we don't 'rightsize' now, PETRONAS may disappear in 10 years,' wondered the PAS lawmaker who yesterday (June 5) demanded transparency on PETRONAS' operations after the purported sale of its Canadian subsidiary. 'But PMX and the gang are still proud to claim that investors are confident, the economy is strong, everything is supposedly under control. What stability is there if a company as big as PETRONAS has to embark on cost-saving to the extent of laying off its workers?' fumed Fadhli. 'Sadder still, there're thousands of workers to be laid off yet there's no sign of the government's plan to help them – there's no aid package nor re-employment plan. The minister is also silent as if nothing is happening.' Added the former PAS Youth chief: 'Even if this is not a sign of negligence in the management of the country's economy, do we really want to wait until PETRONAS collapses before we regret it? 'It seems that the PMX administration has lost its direction. Take a break first, focus on the Yusuf Rawther lawsuit. The country will be ruined if it continues like this.' – June 6, 2025
