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Daily Express
13 hours ago
- Politics
- Daily Express
There must be open dialogue, mutual respect
Published on: Sunday, June 08, 2025 Published on: Sun, Jun 08, 2025 By: Datuk Roger Chin Text Size: By working together, all stakeholders can build a brighter future for Malaysia, one that benefits all its citizens. A Legacy of Discontent - Resolving Sabah and Sarawak's Oil and Gas Impasse Sabah and Sarawak, the emerald jewels of Borneo, are the economic powerhouses of Malaysia. Their vast oil and gas reserves fuel the nation's growth, yet a deep sense of discontent threatens to shatter this prosperity. The root of this tension lies in the unresolved issue of oil and gas rights, a legacy of historical promises and contemporary disagreements. Advertisement This paper delves into the complexities surrounding Sabah and Sarawak's claims, arguing that a critical review of existing frameworks, coupled with open dialogue and a commitment to equitable resource sharing, is essential for achieving a lasting solution. Broken Promises - The Malaysia Agreement of 1963 (MA63) and the Petroleum Development Act (PDA) The Malaysia Agreement of 1963 (MA63) stands as a cornerstone document, promising significant autonomy for Sabah and Sarawak over their natural resources, including oil and gas. However, the Petroleum Development Act 1974 (PDA) appears to contradict this very foundation. Advertisement Established under the cloak of a national emergency, the PDA vested sole authority over Malaysian oil and gas in Petronas, the national oil and gas company. This move by the federal government significantly altered the power dynamic, raising concerns about its adherence to the spirit and letter of MA63. Questioning Legitimacy and Transparency - Deeper Scrutiny Needed Legal scholars raise serious concerns about the PDA's legitimacy. Firstly, the absence of ratification by Sabah and Sarawak's state assemblies potentially violates Article VIII(2)(a) of MA63, which guarantees their control over their natural resources. This unilateral action by the federal government disregards democratic processes and undermines the autonomy promised to these resource-rich states. Secondly, the timing of the emergency coinciding with heightened racial tensions in 1974 necessitates a deeper examination of its true purpose. Was it a genuine crisis, or a convenient justification for a power grab over valuable resources? Scrutinizing historical records and emergency justifications becomes crucial in this context. Beyond legalities, the PDA's lack of transparency adds fuel to the fire. There's no record of citizen consent in these resource-rich states, and the current revenue-sharing formula within the PDA remains shrouded in secrecy. This lack of transparency fuels resentment, as vast wealth is extracted from Sabah and Sarawak with minimal reinvestment in these states. Statistics paint a stark picture - a 2022 World Bank report indicated that Sabah and Sarawak have a GDP per capita significantly lower than the national average. Additionally, these states consistently rank lower in metrics like road quality and access to healthcare compared to the developed peninsular states. The Human Cost of Inaction - Festering Wound and National Unity The extended state of emergency, lifted only in 2011, further stifled legal challenges to the PDA. Decades of simmering discontent have become a festering wound, threatening national unity. Ignoring these grievances has significant economic and social consequences. The oil and gas dispute stands as a major obstacle to national security, prosperity, and cohesion. A fractured Malaysia with a discontented Sabah and Sarawak is unlikely to achieve its full economic potential on the global stage. Beyond Money - A Fight for Self-Determination and Shared Prosperity Sabah and Sarawak's claims extend beyond mere monetary gain. They yearn for a fair deal, a chance to shape their own economic destinies. While increased oil royalty payouts are a necessity, the current model extracts vast wealth, leaving these states lagging behind. They deserve greater control over their resources, the power to decide how their wealth uplifts their people and fuels development. This is not a fight for greed; it's a fight for self-determination. They envision a future where they are active participants in shaping the national economic landscape, not just resource providers. Successful resource-sharing models exist in other federations. Canada's model grants significant autonomy to resource-rich provinces like Alberta over their oil and gas reserves, while ensuring a fair contribution to the national coffers. Similarly, the United Arab Emirates (UAE) employs a successful model where emirates rich in oil and gas contribute to a federal development fund. This fund is then used to support the development of less resource-rich emirates, fostering national unity and shared prosperity. These examples demonstrate that a balance can be achieved, allowing resource-rich regions to contribute to the national good while retaining a significant degree of control over their own resources. Implementing a similar framework in Malaysia, with revenue-sharing based on a transparent formula and provisions for regional development, could pave the way for a more equitable and sustainable future for all Malaysians. The Road to Reconciliation - A Call for Open Dialogue and Mutual Respect Open and honest dialogue involving all stakeholders is essential for forging a path towards reconciliation. This dialogue must extend beyond politicians to include economists, legal experts, and civil society representatives from Sabah and Sarawak. It must be a genuine attempt to understand the depth of discontent and explore solutions that address the root causes. Ignoring these grievances is a recipe for national fracture. A Sustainable Solution - Benefits for All Malaysians A sustainable solution requires a commitment from all parties involved. The federal government must acknowledge the legitimacy of Sabah and Sarawak's claims and demonstrate a willingness to revisit the existing agreements. This could involve: Establishing a revenue-sharing model that reflects a fairer distribution of oil and gas wealth, with a transparent formula that takes into account factors like production costs and depletion rates. Granting Sabah and Sarawak greater autonomy in managing their own oil and gas reserves, allowing them to decide on exploration, development, and production strategies. Investing in infrastructure development and social programs in Sabah and Sarawak to address historical neglect. This could include projects in transportation, education, healthcare, and rural development. Amending MA63 and related agreements to explicitly recognize Sabah and Sarawak's rights over their natural resources. By embracing a more equitable approach, Malaysia can unlock the full potential of Sabah and Sarawak. These resource-rich states can become not just contributors of wealth but active participants in shaping the national economic landscape. This will lead to a more prosperous and cohesive Malaysia, where all states feel they have a stake in the nation's success. Unity or Dissolution - The Choice Before Malaysia The fate of Sabah and Sarawak's oil and gas rights is a crossroads for Malaysia. The nation can choose the path of reconciliation and shared prosperity, or it can continue down the road of disenfranchisement and risk national dissolution. The time for empty promises and half-measures is over. Sabah and Sarawak deserve nothing less than genuine partnership, one that recognizes their rights and unlocks their full potential. Only then can Malaysia truly thrive as a united and prosperous nation. Call to Action The Malaysian government must take decisive steps to address the grievances of Sabah and Sarawak. A comprehensive review of existing agreements, coupled with open dialogue and a commitment to equitable resource sharing, is essential for achieving a lasting solution. By working together, all stakeholders can build a brighter future for Malaysia, one that benefits all its citizens. The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: [email protected]
Focus Malaysia
2 days ago
- 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
Focus Malaysia
2 days ago
- Business
- Focus Malaysia
Consider PETRONAS-like model to develop our REE industry
DENG Xiaoping once made a shrewd prediction. He said, 'The Middle East has oil, China has rare earths'. Rare earth element (REE) is now indispensable as the world catches the net-zero fever. It is not just limited to use in the electric vehicle but has found strategic use in the military as well. China controls more than 85% of supply, therefore making it an effective bargaining chip for China. Rare earths have become a critical feature of a sustainable world. Venturing into the rare earths industry presents a strategic opportunity for Malaysia, with the PETRONAS model for oil and gas offering useful lessons. There is a suggestion to establish a government-linked company (GLC)—the National Rare Earths Corporation (NREC)—to mirror PETRONAS in overseeing all aspects of the value chain including exploration and mining, processing and refining, downstream manufacturing, research and development (R&D) and innovation, as well as strategic trade and diplomacy. The idea emphasises decentralised operations with centralised oversight. While NREC handles strategy and international relations, state-level operations could be managed by State Rare Earths Boards, which ensure local benefit-sharing and stakeholder involvement. Rare earth mining often faces backlash due to pollution. Malaysia should position itself as a global model for ethical rare earth production. Avoid the 'resource curse' by focusing not just on mining but also advanced material production such as rare earth alloys. R&D investments in alternative materials, recycling, and process improvements should be a strategy. There should be strategic stockpiling and trade policy and this involves coordinating trade through government-to-government (G2G) or long-term offtake agreements to avoid market manipulation. It is important to maintain neutral, non-aligned trade diplomacy to stay out of great power rivalries. The issue of governance, transparency should be addressed. Adopt international best practices in governance. Publish regular ESG reports and include civil society in oversight processes. Can the PETRONAS model be repeated? Yes, but with adaptation. PETRONAS succeeded due to strong legal backing (Petroleum Development Act), technical capability-building, and international partnerships. For rare earths, transparency, sustainability, and geopolitical neutrality will be more important than in oil & gas. It has been reported that Malaysia's focus now is on its rare earths-bearing ion-adsorption clay (IAC) deposits overlying the granite bodies along the peninsula's spine. The advantage of the IAC deposits is that there is essentially no thorium in them. Some preliminary investigation work has reported an inferred amount of some 16.2 million tonnes of REE in the country. There is now only one operating mine in Kenering, Gerik and there is now also one Proof-of-Concept (POC) midstream processing plant in Simpang Pulai. Some industry players now on the alert on another potential money spinner in the rare earths business in the form of thorium. The rising demand for thorium in new-generation nuclear energy designs is rooted in the push for safer, cleaner, and more sustainable nuclear power systems, and it has emerged as a fuel in advanced reactors. New designs like the Molten Salt Reactors (MSRs) and Liquid Fluoride Thorium Reactors (LFTRs) are optimised to use thorium efficiently. These so-called Generation IV reactors promise inherent safety (e.g., passive shutdown systems), less long-lived radioactive waste, higher fuel efficiency, and reduced weapons proliferation risk. As countries move away from fossil fuels, nuclear power is seen as a reliable base-load clean energy source. In this case, thorium is seen as a better long-term nuclear option due to greater abundance and reduced risks compared to uranium. India, China, and some Western research institutions are heavily investing in thorium-based reactor designs. India's 'three-stage nuclear programme' relies significantly on thorium as the country has vast reserves. China is testing MSR prototypes in the Gobi Desert, specifically targeting thorium fuel cycles. Monazite sands, a by-product of REE processing, often contain thorium. Malaysia already processes rare earth elements (Lynas in Gebeng), and thorium is present in the waste streams (typically stored as radioactive waste). This existing material could potentially be re-evaluated and extracted as a valuable resource instead of waste. There are caveats, however. Rare earths have a smaller market and more complex processing routes and environmental risks are greater if mismanaged. Global geopolitics around critical minerals is intense—neutral positioning is key. Malaysia has the chance to lead not just in rare earth mining, but in sustainable, responsible resource governance. A hybrid PETRONAS model—state-led but innovation-driven, transparent, and green—can position Malaysia as a respected player in the global critical minerals economy. The reality is we cannot just sit back without taking the right actions to profitably harness billions from Malaysia's reasonably rich rare earths deposits. We must not squander the opportunity. – May 23, 2025 The author is affiliated with the Tan Sri Omar Centre for STI Policy Studies at UCSI University and is an associate fellow at the Ungku Aziz Centre for Development Studies, Universiti Malaya. The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia. Main image: Unsplash/Benjamin Zorn
Malay Mail
28-05-2025
- Business
- Malay Mail
Sarawak exempted from key PDA provisions under joint declaration, says Abang Jo
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. — The Borneo Post
Malaysian Reserve
23-05-2025
- Business
- Malaysian Reserve
Wan Ahmad Fayhsal calls for clarity on Petronas-Petros roles in federal govt-Sarawak agreement
by NURUL NAJMIN ABU BAKAR PARTI Pribumi Bersatu Malaysia leader Wan Ahmad Fayhsal Wan Ahmad Kamal is calling for greater clarity on the ongoing discussions between the federal government and Sarawak regarding the roles of Petroliam Nasional Bhd (Petronas) and Petroleum Sarawak Bhd (Petros). The Machang MP said that the recent joint statement between Prime Minister Datuk Seri Anwar Ibrahim and Sarawak Premier Tan Seri Abang Johari Openg represents a positive step towards a more constructive and equitable dialogue. However, the implementation of the agreement remains unclear, particularly on how the Petroleum Development Act (PDA) and the Sarawak Distribution of Gas Ordinance (DGO) are expected to 'co-exist'. 'What does it actually mean for the PDA and DGO to 'co-exist'? If Petronas no longer needs to obtain a licence but must apply for an exemption, how will this be implemented in practice? 'Clarity on these matters is critical to ensure the arrangement is substantive and not merely symbolic,' he said in a statement. The joint statement issued on May 21 noted the shared role of Petronas and Petros in Sarawak's energy landscape. Abang Johari said Petronas and its subsidiaries are no longer required to obtain operating licences from the Sarawak government to operate in the state. He said while Petros is formally recognised as the sole gas aggregator in Sarawak under the joint statement, the authority to issue operating licences remains with the state's Ministry of Utility and Telecommunication. Wan Ahmad Fayhsal stressed that while Sarawak's aspiration for greater control over its natural resources is valid, Petronas continues to play a vital strategic and economic role for Malaysia.
