SARAWAK Chief Minister Abang Johari Openg today provided some insight into the highly secretive negotiations between state oil company Petroleum Sarawak Bhd (Petros) and Petronas over the latter’s new role in the state’s oil and gas industry.

He also touched upon the terms of the new resource-sharing agreement, following the state’s decision to fully enforce its Oil Mining Ordinance (OMO).

Abang Johari said the national oil company “has shown willingness to discuss with us” after it failed in its attempt to apply for leave and get the Federal Court to hear whether parliament is competent to make laws on oil and gas exploration activities nationwide.

The particular laws Petronas wanted the Federal Court to hear are the Petroleum Development Act 1974, which gives Petronas a monopoly over ownership and exploitation of oil and gas resources in the country, including Sarawak and Sabah, and the Territorial Sea Act 2012, which limits Sabah and Sarawak’s sea border just 3 miles offshore instead of 200.

“We are not trying to disregard Petronas but merely trying to assert our rights and make sure than we can gain as the rightful owner of the resources,” the chief minister said.

He was speaking at a ceremony to mark the load out and sail away of a wellhead platform fabricated for Petronas’ D28 oil drilling project by Sarawak engineering firm Ocean Might Sdn Bhd. Ocean Might is a unit of public listed KKB Engineering Berhad.

The colonial-era OMO legislation gives Sarawak complete control over its oil and gas resources.

Abang Johari, whose address was read by Deputy Chief Minister James Masing, said when the state amended the OMO in July, it was to strengthen its regulatory control over the oil and gas.

“We do not want to be mere spectators in the oil and gas industry,” Abang Johari said, adding that the oil and gas are Sarawak’s as they are found just offshore from Miri, Bintulu and Mukah.

“Perhaps due to an oversight, we have never enforced OMO 1958, but now we want to make sure that we do on all parties involved in the oil and gas in Sarawak, because the resources belong to us.”

He said the 5% royalty Sarawak currently gets “is just chicken feed”.

“That’s why we have been asking for an increase to 20%.”

Sarawak is giving Petronas until the end of next year to come up with a proposal that is acceptable to the state. – October 10, 2018.