THE federal court has dismissed Petronas’ application for leave to seek a declaration that it is the exclusive owner of all petroleum resources in the country.

The apex court’s decision was reported by The Edge Markets.

The national oil company had asked for the court declaration to clarify its rights and position under the Petroleum Development Act 1974 (PDA) and to declare that it is also the regulator for the upstream industry throughout the country.

Chief Judge of Malaya Ahmad Maarop was the sole federal court judge presiding today, the Malay Mail reported.

It said Ahmad ruled that Petronas should have brought its application to the high court instead, as the federal court would only hear a matter if it involved an invalid law.

Petronas filed its challenge earlier this month in a move against Sarawak, which argued that the state had full rights and regulatory authority over its oil resources and upstream and downstream aspects of the petroleum industry.

Sarawak Chief Minister Abang Johari Openg said in March this meant that Petronas would have to secure a prospecting licence from the state government.

Sarawak has also launched its own oil and gas exploration company, Petroleum Sarawak Bhd (Petros), which Abang Johari asserted would have the “same rights” as Petronas.

The Malay Mail also reported that Petronas wants the courts to declare that the PDA overruled the Sarawak Oil Mining Ordinance (OMO) 1958 as the ordinance was drafted before Malaysia was formed.

The OMO was used by the Sarawak government to inform Petronas that the state would regulate its upstream oil and gas activities from July 1.

The ordinance would also require Petronas to operate with a licence from the state.

Sarawak holds that Malaysia’s formation does not invalidate the OMO, said reports on the court’s decision today. – June 22, 2018.