SARAWAK will get back its eroded rights and its fair share of the revenue of its oil and gas resources if the federal government abides by the rule of law, sadi Chief Minister Abang Johari Openg.

The chief minister hinted that the state does not recognise the federal Petroleum Development Act (PDA) when he said he is pursuing the disputes based “on the framework of our law”.

He was referring to the state’s Oil Mining Ordinance (OMO), which was amended to strengthen Sarawak’s regulatory powers over oil and gas resources last year.

PDA, which the majority of Sarawak MPs then supported, gave Petronas complete rights over exploration and exploitation of petroleum, whether onshore or offshore, anywhere in the country.

However, Abang Johari said PDA could not be legally enforced in Sarawak as the state legislature never ratified the law.

“The regulatory power of oil and gas, as far as Sarawak is concerned, has to be based on our Oil and Mining Ordinance,” he said when answering questions on the oil and gas dispute with Putrajaya and how much progress has been made in resolving it.

“Of course, there are some parties who may not agree,” he said, seemingly referring to national oil company Petronas.

“But we will pursue because we believe in the supremacy of our laws and our (federal) constitution. I am pursuing that within the framework of the laws.

“Our constitution is supreme,” he said in a special interview to mark his third year in office today.

In 2018, Petronas sought a declaration from the Federal Court that under PDA, it is the exclusive owner of petroleum resources in the country, including Sarawak.

It also sought a declaration that the PDA is the applicable law for Malaysia’s petroleum industry and also to state that Petronas is the exclusive owner of petroleum resources as well as the regulator of upstream industries throughout Malaysia, including in Sarawak.

The Federal Court, however, dismissed the application.

Petronas is again going to court, this time to challenge the Sarawak’s imposition of a 5% state sales tax (SST) on petroleum products on the corporation and a judicial review to quash the notices of assessment for the company to pay the state more than RM1.3 billion.

The RM1.3 billion in unpaid SST and penalties are computed up to June 30 last year.

The SST was passed by the state assembly in 2018 and came into force on January 1 last year.

While other oil companies operating in the state have paid their taxes, Petronas remains defiant.

The comptroller of state sales tax filed a writ of summons and statement of claim against Petronas at the Kuching High Court registry on November 21 last year.

The court will hear some of Petronas’ applications tomorrow.

“Some people are paying, some people are not, but we leave it to the court to decide on that.”

Abang Johari said the pursuit of a bigger share of the oil and gas revenue is part and parcel of the then state Barisan Nasional manifesto in the 2016 state elections. – January 13, 2020.