SARAWAK is “not obsessed” with control over its hydrocarbon resources and can work with national oil company Petronas to develop the state’s oil and gas resources, Chief Minister Abang Johari Openg said today.

“We are not obsessed. All we want is to play a role in the development of our oil and gas resources.

“We can’t just stand by and watch (Petronas take them all away),” Abang Johari said at a signing ceremony for an onshore maintenance, construction and modification services (ONMCM) contract between Petronas Carigali and Sarawak firm Serba Dinamik Holdings Bhd in Kuching today.

“There is room for Sarawak and Petronas to collaborate more on developing the state’s oil and gas resources,” he added.

The chief minister’s comments mark a conciliatory moment with Petronas in recent times after Sarawak amended and strengthened its 61 year-old Oil Mining Ordinance (OMO) to give the state absolute rights over oil and gas deposits in the state.

In amending the OMO, all oil and gas firms, including Petronas, have to obtain all the necessary licences and permits to continue operating in the state.

The state also started its own oil company, Petros, amid long-standing unhappiness over the 5% oil and gas royalty the state receives from the federal government. Sarawak has been demanding that the amount be increased to 20%.

Petros is meant to protect Sarawak’s interest in the industry by allowing it to participate in upstream oil and gas development, particularly in the exploration and extraction of oil and gas within the state’s waters.

The state also declared the federal Petroleum Development Act – which gives Petronas monopoly over oil and gas resources in the country, including Sabah and Sarawak – as null and void and with no force of law in the state.

It also did the same to the Territorial Sea Act, which annexes Sarawak’s territorial waters from the 3-mile limit onwards.

Sarawak also imposed a 5% petroleum sales tax to increase its revenue from the resources, after Putrajaya repeatedly rejected the state’s demand for 20%.

Abang Johari said the petroleum sales tax, which came into force on January 1, was imposed as the state needs the funds to develop its basic infrastructure.

He said he is in still talks with the federal government over Putrajaya’s opposition to the sales tax. – March 21, 2019.