KUALA LUMPUR (Jan 29): A Sarawak lawmaker has proposed granting the state a 30% equity stake and board representation in Petroliam Nasional Bhd (PETRONAS) to break the deadlock between the federal and state governments over gas asset oversight.

During Thursday’s debate on the royal address in the Dewan Rakyat, Chong Chieng Jen (PH-Stampin) suggested that equity participation would entitle Sarawak to 30% of all dividends distributed by the national oil company. Under this arrangement, PETRONAS would maintain its role as the country's principal manager of oil and gas rights.

“The 30% equity stake would also allow Sarawak to receive returns from the company’s assets spread across the globe,” Chong said.

Talks between PETRONAS and Petroleum Sarawak Bhd (Petros) on the oversight of gas assets in Sarawak have reached a stalemate despite a formal agreement signed last May by Prime Minister Datuk Seri Anwar Ibrahim and Sarawak Premier Tan Sri Abang Johari Tun Openg to jointly develop the sector.

At the centre of the dispute is Petros’ claim to sole gas aggregator rights under state law, namely the Distribution of Gas Ordinance (DGO), while PETRONAS maintains that its authority under the federal Petroleum Development Act 1974 (PDA) supersedes state legislation.

Tensions escalated earlier this month when PETRONAS filed a case at the Federal Court seeking a determination on the legal position of its operations in Sarawak, naming the federal government and the Sarawak state government as respondents.

The move drew criticism from several lawmakers from Gabungan Parti Sarawak (GPS), who called on the federal government — as PETRONAS’ shareholder — to clarify whether the legal action was taken at Putrajaya’s direction.

Chong, who is also Sarawak's opposition leader, argued that litigation is the wrong path, as it would result in a “winner-takes-all, loser-loses-all” outcome. “Either way, it is not good for the country,” he said.

Chong also noted that Sarawak has been receiving only a 5% annual royalty from oil and gas extraction since PETRONAS was established, which he said is disproportionate to the state’s contribution as the country’s largest oil and gas producer.

By pursuing equity participation rather than a zero-sum confrontation, Chong said national interests could be safeguarded while supporting Sarawak’s economic development, creating a win-win outcome.

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