SARAWAK will get half of Petronas’ share in six new oil and gas discoveries in the state’s waters, Premier Abang Johari Openg said last night.

The six wells are on the Gedombak prospect in Block SK306, Mirdanga in SK411 (in the Balingian province), Sinsing in SK313, Machinchang and Pangkin in SK301B, and Kalung Emas well in SK315 (in the West Luconia province).

Petronas, in a announcement on July 25, stated the oil strikes are “on new and existing oil fields, with low levels of contaminants”.

On whether Sarawak has a share in the new wells, the premier said yes and that the terms were set out in a commercial settlement agreement (CSA) signed on December 7, 2020.

The agreement marked a resolution to the differences between Sarawak and Petronas over the state’s imposition of a sales tax on petroleum products as well as to a longstanding dispute between the two parties over issues related to petroleum resource management, regulatory authority, and revenue sharing.

The key words in the agreement are in a clause called “carried interest within Sarawak waters,” he told reporters after chairing a Parti Pesaka Bumiputera Bersatu (PBB) supreme council meeting in Petra Jaya.

“Let’s say Petronas has a 30% equity, and the contractor 70%. Under the commercial agreement, the 30% must be split with Sarawak. So, 15% for Petronas, the other 15% for us,” he said.

The CSA recognises the Sarawak government’s constitutional rights to regulate upstream activities within its territory.  While Petronas retains its role as the custodian of the country’s oil and gas resources, it shares the responsibility of managing these resources with Sarawak.

Revenue are shared among the federal government, Sarawak, and Petronas. 

The agreement also encourages Petronas to increase its investments in Sarawak’s oil and gas sector, including in exploration and development activities.

Petronas’ exploration unit, Petronas Carigali, which delivered the six new oil and gas finds, had stated in July that the wells were part of a domestic exploration drilling campaign that started in late 2022 and which led that year to the large Nahara-1 oil discovery in Block SK306.

Petronas executive vice-president Adif Zulkifli had said then that the results “showed the still untapped exploration potential of Malaysia’s basins, waiting to be discovered by companies who are willing to adopt new and innovative ways”. – September2, 2023.