KUALA LUMPUR (Nov 11): Petronas generates a gross margin of only 10% from production, the Ministry of Finance said in dispelling claims of the national oil-and-gas firm hoarding revenue from Borneo states.

The petroleum industry, including in East Malaysia, operates under production sharing contracts with about 80% of petroleum revenue used to cover exploration, production and operational costs, Finance Minister II Datuk Seri Amir Hamzah Azizan said

Petronas is also required to pay a 5% cash payment to the respective state governments based on gross production, and another 5% to the federal government.

“This means only about 10% of gross profit remains to be shared between Petronas and investors after taxes,” Amir Hamzah told the special chamber of Parliament on Tuesday.

He was responding to an inquiry from Chiew Choon Man (PH-Miri), who asked about the claims that Petronas keeps 95% of Borneo states’ oil and gas revenue.  

Under the Petroleum Development Act 1974, the company, formally known as Petroliam Nasional Bhd, is granted exclusive rights to regulate and manage petroleum resources in Malaysia, including Sabah and Sarawak.

In return, the company is required to pay a 5% cash payment to the respective state governments based on gross production.

For 2025, payments to date amounted to RM2.233 billion for Sarawak and RM1.226 billion for Sabah, according to data provided by Amir Hamzah.

Sarawak received RM2.862 billion in 2023 and RM2.544 billion in 2024, while Sabah received RM1.742 billion in 2023 and RM1.669 billion in 2024. As for the total for the past three years, the payments made to Sarawak was RM7.64 billion and to Sabah was RM4.637 billion.

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