KUALA LUMPUR (Oct 1): Petroliam Nasional Bhd (Petronas) is maintaining its view that any purported action targeting the national oil company in relation to legal proceedings initiated by the Sulu claimants against the Malaysian government is baseless.
Petronas would continue to defend its legal position in the matter, the company said in a statement to The Edge on Saturday (Oct 1) in response to queries on the issue.
On Thursday, The Edge reported that lawyers acting for the heirs of the late Sultan Jamalul Kiram II of Sulu were understood to be in the process of submitting an application to the Dutch courts to seize assets belonging to Petronas.
Citing a source familiar with the matter, the report said the assets that could be under siege could be "worth a lot, in the billions probably”.
“Malaysian companies have a lot of businesses in the Netherlands, be it CPO (crude palm oil) or even LNG (liquefied natural gas), so it looks like an interesting target,” the source said.
Petronas via Dutch companies, such as Petronas Carigali Canada BV, Petronas International Power Corporation BV and PLI (Netherlands) BV, has extensive assets in Canada, India and Indonesia, among others.
In the statement, Petronas said it is aware of the latest action being initiated by the Sulu claimants against Putrajaya, based on media reports and the statement issued by the Prime Minister's Department on Friday.
"Petronas maintains its view that any purported action targeting Petronas in relation to this case is baseless, and Petronas will continue to defend its legal position," it added.
The latest action comes after bailiffs acting for the Sulu sultan seized Petronas Azerbaijan (Shah Deniz) Sàrl and Petronas South Caucasus Sàrl in Luxembourg, both of which belong to Petronas, to satisfy a US$14.92 billion (RM66.4 billion in mid-July) award by Spanish arbitrator Gonzalo Stampa.
However, a Petronas statement following reports of the seizure clarified that these units had already divested their entire stakes in the natural gas project in Azerbaijan, and that the proceeds from the disposal had been repatriated.
To recap, the legal dispute erupted after the eight heirs of the late Sulu sultan initiated international arbitration proceedings against the Malaysian government in end-January 2018 in Madrid, based on an 1878 agreement between Sultan Mohamet Jamal Al Alam (the then Sulu sultan) and Baron de Overbeck and Alfred Dent, which granted perpetual sovereign rights over what are parts of Sabah today, in return for an annual RM5,300 token payment.
Malaysia has been paying RM5,300 annually since 1878.
In 2013, the administration of then prime minister Datuk Seri Najib Razak ceased the RM5,300 yearly payment, after an incursion of more than 200 armed militants who invaded Lahad Datu and resulted in 78 deaths caused a purported breach in the 1878 agreement. Malaysia claims the militants are linked to the sultan of Sulu, but the heirs dispute this claim.