SARAWAK will take its case to court if Petronas refuses to pay sales tax on petroleum products, a ruling that came into force on January 1, chief minister Abang Johari Openg told state lawmakers.

He said Petronas has been issued with the Notice of Assessment over the payment.

He added while Petronas continues to hold out, other petroleum companies operating in the state have done so.

“Under the State Sales Tax Ordinance 1998, Petronas is legally obligated to pay the state sales tax and its failure to do so is tantamount to a breach of law.”

As the spat with Petronas continues, he said the state has taken away the company’s rights to oil mining under its Oil Mining Ordinance 1958 (OMO 1958).

He said state-owned Petroleum Sarawak Bhd (Petros) will now make the decisions to award licences for oil and gas prospecting and production in onshore areas.

He added in the initial stage, Petros will issue onshore mining licences in Limbang and Baram.

“It is the state government’s intention to manage the remaining hydrocarbon potential in the onshore areas of Sarawak.

“The efforts of the state government to gain fairer and more equitable share of revenues from oil and gas produced in Sarawak will continue to be one of the main agenda of the Gabungan Parti Sarawak government.”

Oil exploration activities on land started in Miri in 1810 and moved offshore onto to the continental shelf of Sarawak in the 1950s.

Despite the spat, Johari said the state is projected to collect a revenue of RM10.067 billion next year. – November 4, 2019.