THE state government is committed to exercising regulatory control over the exploration and mining of oil and gas (O&G) within the territorial boundaries of Sarawak in order to accomplish strategic objectives, including equity participation in existing offshore mining blocks and an established framework for the award of new offshore mining blocks.
Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan said another objective was to have greater and more equitable share of revenues from O&G found and produced in Sarawak.
“Another strategic objective is regaining complete control of onshore mining as manifested by the issuance of two oil mining leases to Petroleum Sarawak Berhad (Petros) under the state’s Oil Mining Ordinance (OMO) 1958,” he said in his winding-up speech for the Ministry of International Trade and Industry, Industrial Terminal and Entrepreneur Development (Mintred) today.
He said they also aimed to secure greater volume of natural gas produced in onshore and offshore areas to boost the state’s industrial development agenda, including the establishment of a petrochemical hub in Bintulu.
He said the state government aimed to take control of gas distribution in Sarawak including the distribution of liquefied petroleum gas and also ensure greater participation of Sarawak companies in works and supply contracts in the state’s O&G sector.
He said that to ensure greater participation of Sarawak in the O&G sector and enhance revenue from the state’s petroleum resources, a committee had been set up to facilitate negotiations with the Gabungan Parti Sarawak (GPS) state government, federal government, and Petroliam Nasional Berhad (Petronas) to find commercial solutions on these matters.
“The negotiations are still on-going,” said Awang Tengah, who is also minister for Mintred.
On the five percent state sales tax (SST) imposed on petroleum products from January 1 last year, he said that last year, the state government had collected RM3.09 billion from SST on petroleum products.
“More revenues from investments in downstream industries like the LNG plants and through equity participation in offshore blocks are expected in the future,” he said.
He noted that Shell had decided to relocate its upstream operations in Miri, attributing Shell’s confidence in the state to Sarawak’s credible leadership, political leadership, and sound O&G policy.
“For Sarawak to achieve its vision of a high-income economy by 2030, we must have sustained political stability. Political stability is paramount to be able to govern well and attract more foreign investments, creating more business and employment opportunities,” said Awang Tengah.
