KUALA LUMPUR (Aug 30): Petroliam Nasional Bhd (Petronas) continues to work with the Sarawak state government to develop the state's hydrocarbon assets, president and group chief executive officer Tan Sri Tengku Muhammad Taufik Tengku Aziz said.
Speaking after announcing Petronas' latest quarterly results, Tengku Muhammad Taufik said Petronas is “committed to Sarawak”, and keen to develop fields beyond those underlined in the commercial settlement agreement (CSA) signed between the state and the company in December 2020.
He was responding to questions about the company’s position in Sarawak's oil and gas (O&G) industry, following news reports saying that the state’s premier had called on oil major Shell to continue to become Sarawak's partner in the development of its O&G resources, including carbon capture and storage.
“Engagements have continued. We have a Sarawak state representative on the board [of Petronas]; coordination is done through platforms which are agreed. The dialogue is both formal and informal, so I don’t know why it is portrayed as an immediate substitution or replacement [of Petronas in the state],” Tengku Muhammad Taufik said.
Petronas and the Sarawak state executed a CSA on Dec 7, 2020 to resolve differences over the imposition of state sales tax on petroleum products and other O&G matters.
The CSA, Tengku Muhammad Taufik said, already addressed topics around upstream participation.
“The remarks recently made around 50% [participation limit for Petronas in Sarawak assets] were already envisaged in the settlement agreement. It is not unilateral exercising of rights. There is language around procuring from us at commercial arm's-length terms. This is not seen as a giveaway [by Petronas].
“So this 50% may have been taken out of context,” he added.
“You see five discoveries offshore Sarawak [that were announced]. We recognise the prolific nature of reserves there. We will work with the state to grow that pie, and along the entire value chain, be it supply or gas, entering into renewables — it was not originally put into the CSA — we will continue to work with them in a very amicable, commercially minded manner,” he said.
Meanwhile, commenting on China’s newly released 2023 Standard Map, which sees the country’s maritime line encroaching on Sabah and Sarawak borders, Tengku Muhammad Taufik said Petronas works within the confines of Malaysia’s sovereign lines.
“We have been asked this question about all activities in both the Kasawari and Timi [fields offshore Sarawak].
“Our upstream activities are within our country’s sovereign rights. Petronas very vigorously defends Malaysia’s rights to develop assets and energy reserves for its own energy security.
“I do note with interest that the reach has grown beyond its claims”, he added.
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