KUCHING: Deputy Prime Minister Datuk Seri Fadillah Yusof has called for the federal and Sarawak governments to reach a ‘win-win’ solution regarding the ongoing dispute over offshore oil and gas resources along the Sarawak coast.
In a recent interview with Free Malaysia Today (FMT), he said Sarawak claims the right to all resources within its borders, including the continental shelf, based on the Malaysia Agreement 1963 (MA63).
He added that Sarawak is seeking “more empowerment” over its resources, in line with the spirit of MA63.
“As far as Sarawak is concerned, the continental shelf extends about 100 miles (160 km) from the territorial border,” he said.
However, under the federal Petroleum Development Act 1974, Petronas holds exclusive authority over Malaysia’s onshore and offshore oil and gas resources.
Sarawak’s claim to offshore oil and gas, Fadillah explained, is based on the state’s Oil and Mining Ordinance 1958, which Sarawak argues was suspended during the national emergency in 1969.
“During the emergency, only the federal government could introduce laws, which is why the ordinance could not be enforced,” he said.
Sarawak contends that the law was revived after the emergency was lifted in 2011, restoring the state’s rights to all its oil and gas resources.
Additionally, the Sarawak state assembly passed the Distribution of Gas Ordinance 2016, enabling the state to assume Petronas’ role as gas aggregator.
The ordinance grants Sarawak’s state-owned company, Petros, authority over all aspects of buying, selling, price-setting, and distributing liquefied natural gas in the state.
Negotiations between Petronas and Petros are ongoing, with Fadillah expressing hope that the two parties will reach a commercial agreement.
He envisions Petronas continuing offshore exploration, while Petros takes over onshore activities.
Fadillah, who is also Energy Transition and Water Transformation Minister, acknowledged that both sides have differing views on what constitutes a fair agreement.
He stressed that the ultimate goal is to achieve a “win-win” solution that benefits both the state and federal governments.
