EX-PETRONAS chief executive Wan Zulkiflee Wan Ariffin stepped down as he disagreed with the government’s plan to pay RM2 billion in oil and gas sales tax to the Sarawak government.

A source close to Wan Zulkiflee told Reuters that he could not agree to the deal and resigned in protest.

“Wan Zulkiflee resigned because of principles, that he is not agreeable to the Sarawak deal.

“The new government is open to giving more to the states that produce oil,” said the source close to the government.

The former Petronas CEO, who had been in the national oil and gas company for 37 years, and the Prime Minister’s Office did not respond to Reuters’ request for comment.

The Sarawak government is controlled by Gabungan Parti Sarawak (GPS), a bloc of local parties that are aligned to Prime Minister Muhyiddin Yassin’s Perikatan Nasional (PN) coalition.

Muhyiddin’s government is on shaky ground, reportedly having a majority in the low single digits in Dewan Rakyat, and needs GPS’ 18 lawmakers to stay in power.

Sarawak had been demanding that the federal government pay its dues over the state’s oil and gas resources, with the sales tax being one of the state’s ways of forcing Putrajaya to pay up.

Petronas, however, had maintained that it has the sole rights to all oil and gas resources nationwide, including in Sarawak, and had taken the dispute to the courts.

Muhyiddin is also reportedly open to giving Sabah and Sarawak more royalty payments for their oil and gas resources, key demands of both Bornean states.

Wan Zulkiflee had previously said that hiking royalty payments is not feasible and it was estimated that this could cost the company up to RM7 billion a year. – June 19, 2020.