KUCHING — March 6, 2018: Sarawak is to assume full regulatory authority over the upstream and downstream aspects of the oil and gas industry in the state by this July as part of the devolution of powers from the federal government.
This was announced here tonight by Chief Minister Datuk Patinggi Abang Johari Openg when launching Petroleum Sarawak Berhad (Petros).
He said Sarawak would exploit its natural resources of oil and gas as provided for constitutionally under the State List in the Ninth Schedule of the federal Constitution.
The devolution of powers was in keeping with the agreement by Prime Minister Datuk Seri Najib Razak to return to Sarawak the powers provided for in the Malaysia Agreement 1963 (MA63) that had been inadvertently eroded over the years.
Abang Johari said the formation of Petros and the exercising of the constitutional rights under item 2(c) of the State List and 8(j) of the Federal List as provided in the Ninth Schedule of the federal Constitution were the outcomes of the discussions on the devolution of powers between the state and federal governments.
He thanked Najib for agreeing to give back the powers that had been inadvertently eroded over the years, saying that the launch of Petros was a clear testimony that substantial progress had been achieved in the ongoing discussions on devolution of powers.
“All persons and companies involved in the oil and gas industry in Sarawak must henceforth have the necessary licences, permits, leases and approvals required under either the Oil Mining Ordinance or the Gas Distribution Ordinance. In other words, they are required to regularise their operations and activities to comply with all state laws including those relating to the use and occupation of land,” said Abang Johari.
He gave the assurance that the enforcement of the state laws would not jeopardise the interests or investments of Petronas, the national oil corporation, and other companies already involved in the oil and gas industry in Sarawak, whether upstream or downstream, but their business and operational activities must be aligned with Sarawak laws and regulations.
The government-incorporated Petros will spearhead the state’s participation in the oil and gas sector that is considered of strategic importance to the overall socio-economic development objectives of Sarawak.
Abang Johari said Petros will be granted the right to mine oil and natural gas in the state and will be an important player in the upstream oil and gas industry.
The licence was handed to Petros chairman Tan Sri Hamid Bugo. — Bernama