THE undercurrent of Sarawak’s anger towards Petronas was on show at a domestic gas signing ceremony – transfer of stewardship of the distribution of domestic gas to state oil firm Petros – in Kuching today.

Deputy Chief Minister Awang Tengah Ali Hassan pulled no punches when he described speeches made by Petronas president and group CEO Wan Zulkiflee Wan Ariffin and Petros chairman Hamid Bugo as full of niceties.

Zulkiflee in opening his address, said the transfer was “in the spirit of collaboration and shared commitment, towards developing Sarawak’s domestic gas business for long-term growth and prosperity”.

“In here, we talk very nicely. Outside we fight,” Awang Tengah said in reference to the ongoing legal fight Petronas had mounted to avoid paying state sales tax on petroleum products.

Petronas is the only oil and gas company operating in the state that is challenging the tax which came into force in the beginning of last year.

Quoting the popular English idiom “when in Rome, do as the Romans do”, Awang Tengah said Petronas should respect Sarawak’s laws.

“Follow the local laws of Sarawak,” he said as he veered from his prepared text.

Awang Tengah, who said Sarawak has achieved the policy goal of its Distribution of Gas Ordinance 2016 for stewardship of its resources, said the state had to “beg” for more domestic gas for industries in Bintulu.

“We have to beg. We have to write to the prime minister for more quota of gas.

“Ultimately, they agreed but that is not enough.”

Awang Tengah, who is also state minister of international trade and industry had alluded to the 2016 agreement with Petronas for the supply of 450 million standard cubic feet per day (mmscfd) of natural gas for power and non-power sectors in the state.

Of this, 250 mmscfd was to Sarawak Energy Berhad to fire its power generation plants at Tg Kidurong and Samalaju Industrial Park in Bintulu.

The remaining 200 mmscfd are for feedstock in the petrochemical industry.

He said the failure to guarantee potential investors of a steady supply of gas had resulted in “many missed investment opportunities”.

He also said Sarawak exercising its powers over its resources and Petronas exercising its powers in the Petroleum Development Act 1974 had caused confusion among potential investors.

“The investors are confused which is the authority to abide by, the state or Petronas.

“For the investors, this is very confusing and many just walked away.”

He said with the state now in full control of the natural gas distribution, he hoped it could restore investor confidence.

The transfer, which took effect from January 1, gives Sarawak full control and authority over the supply, sales, and distribution of natural gas within the state with Petros to supply, sell and deliver domestic gas to Sarawak homes, businesses and industries.

Awang Tengah said with that, Sarawak is now in a strong position to to promote itself as the preferred investment destination and to leapfrog its economic development towards a high income economy by 2030.

Sarawak holds 54% of the total national gas reserve and 29% of the total oil reserve.

Most of the oil and gas resources are exported as crude oil and liquefied natural gas. – February 12, 2020.