THE Oil Mining Ordinance (OMO), 1958, which provides for the powers for the issuance of prospecting licenses, mining leases, and certificates to regulate oil mining onshore and offshore Sarawak, has never been repealed and continues to be valid and in force.
Datuk Ibrahim Baki (GPS-Satok) said as far as the august House is concerned, there is none who surrendered such rights.
“If you surrender, you’re a betrayer,” he said when debating on the Supply Bill 2025 today.
He earlier explained that Sarawak (Alteration of Boundaries) Order in Council 1954 was made by the then British Monarch, Queen Elizabeth II, pursuant to the Colonial Boundaries Act 1895, and by that Order, the boundaries of Sarawak were extended to include the area of the continental shelf being the seabed and its subsoil which lies beneath the high seas contiguous to the territorial waters of Sarawak.
“Although the limit of the continental shelf was not specifically stated in the Order, but what constitutes the continental shelf is clearly stated to be ‘the seabed and its subsoil which lies beneath the high seas contiguous to the territorial waters of Sarawak’.
“In 1952, the then Sarawak government issued a mining lease to Sarawak Oilfields Limited (SOL). After the 1954 Order in Council, by a Deed made on May 13, 1956, the mining area in the said mining lease was extended to cover the continental shelf, giving SOL the right to exploit and mine petroleum lying or being within the area of the continental shelf.
“Therefore, since 1956, Sarawak had exercised rights over the exploitation and mining of petroleum in the area of the continental shelf which is within the extended boundaries of Sarawak,” he said.
Ibrahim further stressed that the Sarawak Legislature, then known as the Council Negri, passed the Oil Mining Ordinance (OMO), 1958 to regulate oil mining in Sarawak, including the continental shelf.
“In the premises, the territory of Sarawak includes the continental shelf beyond its territorial waters up to a depth of 200 metres or beyond that limit to where the depth of the superjacent waters allows for exploitation of the natural resources in the seabed and subsoil.
“There is no issue on the continental shelf not been properly defined in the said Order in Council, 1954, because the Geneva Convention on the Continental Shelf had made clear what constitutes the ‘continental shelf’ of a State,” he said.
He then said under the Federal Constitution, mining leases and certificates are the legislative authority of the State by virtue of Item 2(c) in the State List (List II) of the Ninth Schedule of the Federal Constitution.
“Therefore, Sarawak has the legislative and executive authority over the issuance of mining lease and certificate to regulate oil mining, including in the continental shelf,” he said.
He said with the OMO 1958 which continues to be valid as a state law by reason of section 73 of the Malaysia Act 1963, and therefore the development of mines, mining, oils and oilfields would have to be subject to prospecting licences, mining leases, and certificates issued under the OMO.
He also said when the Emergency (Essential Powers) Ordinance No. 10 was promulgated
pursuant to the Proclamation of Emergency 1969, the OMO was not repealed although the Continental Shelf Act 1966 and the Petroleum Mining Act 1966 was extended to Sarawak.
“During this period of emergency, the federal government requested the state government to assign the mining lease issued to SOL in 1952 to the federal government, by a Deed of Assignment dated March 18, 1971.
“In the recital to the Deed of Assignment, the rights of the state to issue the mining lease and that the mining area included continental shelf were acknowledged by parties to that Deed which include the federal government,” he said.
He added that in Malaysia, the continental shelf is defined by the Continental Shelf (Amendment) Act 2009, and the rights of Sarawak to regulate petroleum mining in the continental shelf which had been exercised even before Malaysia Day are not affected or prejudiced by Malaysia’s claim to sovereignty over the continental shelf under the United Nations Law of the Sea (UNCLOS) 1982.
“Sarawak will continue to exercise its constitutional authority under item 2(c) of the State List to regulate petroleum mining in the continental shelf by the issuing of exploration licence and mining leases or certificates pursuing to its Oil Mining Ordinance,” he said.
He added although section 2 of the Petroleum Development Act 1974 (PDA) purports to vest petroleum in PETRONAS vide a vesting Order prescribed in the First Schedule thereto, the PDA did not repeal the OMO and did not exempt PETRONAS complying with constitutionally valid state law.
“The only law that PETRONAS is exempted from complying with, is the Petroleum Mining Act 1966.
“If Parliament had intended PETRONAS to be exempted from any other laws, whether state or federal, in regard to its upstream businesses or activities, Parliament would have spelt out such exemption in the PDA.
“Therefore, the PDA and the Sarawak Oil Mining Ordinance must coexist and both legislations must be complied with,” said Ibrahim.
