OFFSHORE operations belonging to Petronas in Sarawak and the quantum of the petroleum sales tax for last year are among issues high on the agenda at next week’s meeting to resolve disputes between Sarawak and the national oil company.

Senior Minister Fadillah Yusof, who co-chairs the federal committee with Finance Minister Tengku Zafrul Aziz, is to work out a new commercial arrangement for Petronas in the state. The federal committee will meet with the committee from the Sarawak government, headed by Deputy Chief Minister Awang Tengah Ali Hassan, on September 17 to review findings on the outstanding disputes.

“The meeting in Kuching (next week) will be to get updates from a technical committee (under the Sarawak government committee) on what they have achieved in terms of negotiations and discussions,” Fadillah told reporters after opening a Malaysia Day art exhibition at the state library in Kuching today.

One issue that is “more or less resolved” is Petronas’ operations onshore, but offshore operations still need to be discussed, added Awang Tengah.

Issues that cannot be resolved at the meeting next week will be referred to Prime Minister Muhyiddin Yassin and Sarawak Chief Minister Abang Johari Openg.

To date, the committee had managed to get Petronas and the Sarawak government to withdraw their respective legal suits against each other over the dispute on the 5% state sales tax on petroleum products.

Petronas has also committed to settling the sales tax, with payment to be made before end of this month.

Sarawak and Petronas were on a collision course after the state said it did not recognise the Petroleum Development Act (PDA) 1974 (and began exercising its rights over oil and gas via its 62-year-old Oil Mining Ordinance (OMO).

The PDA gave Petronas a monopoly over all the oil and gas resources in the country. – September 12, 2020.