KUALA LUMPUR (May 2): The Sarawak government has accused Petronas Carigali Sdn Bhd, the main upstream arm of national oil company Petroliam Nasional Bhd (Petronas), of breaching a state law on gas distribution.
The alleged breach, under Section 7(e) Distribution of Gas Ordinance 2016, involves the operation of a plant owned by Petronas Carigali in Miri, according to a letter issued by the state’s Ministry of Utility and Telecommunication to the company reviewed by The Edge.
Sarawak will impose an unspecified financial penalty if Petronas continues to operate the Miri Crude Oil Terminal without a licence within 21 days from the April 30 date of letter, the ministry said.
Petronas, meanwhile, is disputing the accusation.
Section 7 spells out licensing of activities relating to distribution of gas, and the subsection (e) covers activities of building, managing or maintaining a gas pipeline, or other apparatus or equipment, or mechanism for the distribution of gas.
Petronas confirms notice
Petronas confirmed that Petronas Carigali has received notices related to gas processing and distribution from the ministry on April 30.
Petronas Carigali is statutorily authorised under the federal Petroleum Development Act (PDA) 1974 to undertake the activities, and the company complies with all applicable laws, Petronas said in response to The Edge.
“While we respect the aspirations of the State of Sarawak, Petronas also has a duty to uphold PDA 1974 and safeguard national interests,” the company said.
The tiff is the latest between the increasingly assertive Sarawak and the federal government over the rights and management of petroleum resources in the state. Petroleum Sarawak Bhd (Petros), the state’s own oil-and-gas company, has also clashed with Petronas in courts.
“Petronas will continue to engage constructively and work closely with the federal government, Sarawak, and Petros in exploring future arrangements to ensure regulatory clarity and operational continuity for the benefit of the industry, state, and nation as a whole,” the company added.