State-owned Petroleum Sarawak Bhd (Petros) is asserting a greater role in Sarawak’s oil & gas exploration and production activities now that it has been awarded licences.
Initially, the onshore mining licences granted to Petros cover Limbang and Baram areas in the northern region.
The Sarawak government’s award of such licences is to exercise the state’s rights to regulate oil mining within Sarawak under Oil Mining Ordinance 1958.
Petros, the brainchild of Chief Minister Datuk Patinggi Abang Johari Tun Openg, is tasked to evaluate all applications for licences or mining leases. It is empowered by the state government to facilitate all oil and gas prospecting and mining activities, previously under the purview of Petroliam Nasional Bhd (Petronas).
Petronas, like other oil and gas companies, is required to apply for mining licences from Petros to operate in Sarawak. In opposing such a requirement, Petronas filed a suit in the Federal Court in June 2018 in order to assert its position as the exclusive owner of Malaysian oil resources (including Sarawak) and that the 1974 Petroleum Development Act is still valid.
However, the Federal Court denied Petronas’ application to start legal proceedings against Sarawak.
On July 10, 2018, the Sarawak state assembly passed the Oil Mining (Amendment) Bill 2018 to regulate oil and gas activities in the state.
It is the state government’s intention,according to Abang Johari, to manage the remaining hydrocarbon potential on the onshore areas of Sarawak. The state holds about 56% of Malaysia’s natural gas reserves and over 34% in crude oil reserves.
