SARAWAK Chief Minister Abang Johari Openg has told Petronas it cannot operate as usual from July, adding that the national oil company has not done enough to develop the country’s largest state.

His remarks, carried by satellite TV operator Astro tonight, underscore the state’s move to be independent of Putrajaya ahead of the 14th general election, widely expected to be called next month.

“Petronas must acknowledge the fact that it is our right for them to align with our laws,” the chief minister said in an interview on Astro Awani.

Last night, the chief minister, at the launch of the state-owned Sarawak Petroleum Bhd (Petros), said by July, Sarawak will assume full regulatory authority over the upstream and downstream aspects of the oil and gas industry in the state, and that all individuals and companies wishing to do business in the industry, including Petronas, must have the necessary licences, permits, leases and approvals from the state government.

The legal requirements are from either the Oil Mining Ordinance 1958 or Gas Distribution Ordinance 2016.

Prior to this, Petronas, vested with the powers under the Petroleum Development Act 1974 (PDA), dictated all aspects of the oil and gas industry in the state.

Petronas negotiated and awarded all the power-sharing contracts and its contractors.

Abang Johari said under the new operating condition, as Sarawak exercises its constitutional rights over the two resources, some Petronas decisions are also no longer for the company to make alone.

He gave the appointment of contractors as an example.

“They can’t appoint their contractors themselves. They must get their contractors and sub-contractors who are registered with us,” he said, referring to the new legal requirement for oil and gas companies to have licences, permits, leases and approvals from the state government.

Abang Johari said Sarawak never had a say in the appointment of contractors before.

“We don’t have a say especially in the question of the participation of our private sector.”

He said while the national petroleum company has posted billion of ringgits in profits, it is not doing enough to channel some of the money to develop the state.

“The understanding (for the PDA) was that, Petronas would use part of its revenue to develop the state. Over the years, you can see what has happened.

“Petronas has got lots of revenue, but our perception is that they concentrated their projects in the peninsula, while the state is struggling to get money to develop basic infrastructure.

“Fair enough, it has to be shared throughout the country, but there must be the equitable allocation of resources to Sarawak.”

He said Sarawakians can also see and think.

“Sarawakians are looking at the Twin Towers, and Sarawakians are also looking at all the bailouts of the federal government… and we can think that part of the money comes from Petronas.”

He said Petronas is not doing enough to help develop the state.

“Yes, they have their plant in Bintulu. That is their investment, and we have a certain equity.

“But what must be done is, there must be equitable jobs to be given to Sarawak companies.”

Despite the warning of change, Petronas said the company “is committed to supporting Sarawak’s aspirations to actively participate in the state’s oil and gas industry, in line with the current framework of the PDA”.

In offering its congratulations to the Sarawak government over the launch of Petros, and welcoming the participation of the state petroleum company in the oil and gas sector, Petronas said it is looking forward “to continue collaborating with the state for mutual benefit”. – March 7, 2018.