KUALA LUMPUR (Feb 17): National oil company Petroliam Nasional Bhd (Petronas) will retain all its existing domestic and international contractual obligations in Sarawak, said Prime Minister Datuk Seri Anwar Ibrahim.

This will remain the case even after Sarawak's state-owned oil company, Petroleum Sarawak Bhd (Petros), assumes control of gas distribution in the state as the aggregator, effective from March 1.

“This (Petros') role still confirms the previous approval given to Petronas and its subsidiaries,” Anwar told the lower house of Parliament on Monday.

Anwar did not say whether Petronas would be required to obtain a licence, or be subject to any additional procedures, to carry out petroleum operations in Sarawak.

Last week, Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said revealed in a parliamentary reply that Petronas recognises Petros as the state's gas aggregator, excluding liquefied natural gas.

She added that Petronas and its subsidiaries are not required to obtain a licence, or comply with additional procedures, to conduct petroleum operations in Sarawak beyond those outlined in the Petroleum Development Act 1974 (PDA), and that an agreement had been reached between Sarawak Premier Tan Sri Abang Johari Tun Openg and Anwar on the matter.

However, Abang Johari was reported as saying on Sunday that Azalina's statement was "less than accurate". "That is why I will continue discussions with the prime minister," Abang Johari was quoted as saying in The Borneo Post.

He reportedly also reiterated the state’s position that it had regulatory authority over oil and gas activities in its territory, saying the state's ownership of its resources is provided clearly in the Federal Constitution and Malaysia Agreement 1963, and that any extraction of such resources must first be approved by the state.

“This is the rule of law. If you come to my house, you must first greet me before entering. If I don’t open the door, then you cannot come in. The same applies to our oil and gas resources,” he was further quoted as saying.

The federal government has been engaged in negotiations for months with the Sarawak government over Petronas’ authority over the country’s oil and gas reserves. Under the PDA, Petronas is tasked with developing the country's hydrocarbon resources, including natural gas.

However, following Sarawak's amendment to the state's Distribution of Gas Ordinance (DGO) 2016, Petros is set to become the sole gas aggregator for the state. As a result, any party engaged in gas distribution activities in Sarawak must apply for a licence, as provided for under the DGO.

In his Parliament address on Monday, Anwar said Petros' role as Sarawak’s gas aggregator, as outlined in the state's DGO, which will come into force on March 1, must be read together with the PDA.

He reiterated that both the federal and Sarawak governments recognise the PDA as "a federal Act, as stated in the provisions of the law".

Anwar added that under the DGO, Petros is guaranteed access to up to 1.2 billion cubic feet of natural gas per day for Sarawak's domestic needs, with additional supply based on future requirements.

Petros is also authorised to expand its activities and collaborate with Petronas, he said.

Anwar emphasised that Petronas and Petros will move forward as partners to safeguard the interests and profits of both the nation and Sarawak.

"All subsequent detailed negotiations will ensure mutual benefits and interests in accordance with transparent commercial principles," he noted.

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