These recent few years saw disputes over the exploitation of Sarawak’s resources, especially in the oil and gas sector. It was reported that Sarawak’s Petros is taking national oil company Petronas to court on the issue. – Petronas Carigali pic, February 7, 2025– Petronas Carigali pic, February 7, 2025
State of the nation: the politics of oil and gas – Zainul Arifin
Sarawak's muscle-flexing belies Petronas’ silent strength in petroleum dispute
Zainul Arifin
Updated 3 days ago
7 February, 2025
9:00 PM MYT
THERE has been some noticeable swagger from Sarawak these days, which in itself is not a bad thing. Such flexing often comes from a position of renewed vigour and confidence. However, there is a hint of righteousness, too, a sort of this-is-our-time-after-you-have-wronged-us vibe.
The almost triumphant-like pronouncements by politicians from the state that Sarawak does and will do things better are, of course, cheered by Sarawakians, but the rest of the country might be slightly bemused by them.
In Sarawak, we are told that the civil servants get paid more, the schools will be better than the rest of the country, the university will be free, the lingua franca is English, and it does things differently, and better too. It will have a better airport, airline, ports, banks, industries, etc. Also if you are not Sarawakian, it will be harder to want to work in the state.
A caveat for all the above is that they are snippets over social media where context is often lacking. Yet they can be barometers of the political inclinations in Sarawak, telling us which way the wind is blowing and colour opinions of the state and its leaders.
Don’t they like us anymore?
These recent few years also saw the noise amped up a bit with disputes over the exploitation of the state’s resources, especially in the oil and gas sector. Sarawak’s Petros is taking national oil company Petronas to court on that.
Depending on who you asked, subject to their inclinations and interpretations of the law of the land, everyone could be wrong or right – either Sarawak has been denied its rights or it is being unreasonable.
Among others, the things being bandied about include the Malaysia Agreement 1963, signed by the parties for the formation of Malaysia, which touched on the terms and conditions of the union – the Petroleum Development Act 1974, which tasked Petronas as the body responsible for oil and gas resources in the country and the Sarawak Distribution of Gas Ordinance 2016, which among others give state company Petros the sole gas rights exploited in the state.
Just as we had thousands of virologists over social media during the Covid-19 era, we now see similar numbers of legal and constitutional experts over the internet where there is less desire to embark on clarity, but to shout and swear.
We dig deeper into the narratives that we hang our hats on, and remain steadfastly stubborn.
Yet, the question by the average Malaysian who is likely to be ignorant of the dots and crosses of legal treatises is: why go to court? To paraphrase a song, something is happening here but we are not sure what it is, do we?
The oil and gas industry is a significant contributor to the national economy, and more so for Sarawak. Its braggadocio over the past few years could be attributed to its stronger financial position arising from the 5% sales tax on oil and gas activities it has been collecting since 2019, which some suggest to be just under RM10 billion thus far. This will likely increase further over the years.
The desire for a win-win solution from the technocrats in Petronas and the prime minister’s measured response did not seem to calm the issues especially when oil and gas revenue can serve as grist for the political mill.
What will happen to Petronas in Sarawak? What will happen to Petronas? Will other states follow suit? Can’t things be resolved amicably?
The court case is also causing concern among investors keen to participate in the industry in the state, including in new growth sectors like carbon capturing where depleted oil and gas reservoirs are used to permanently store captured carbon from industries and power plants.
Petros is new and does not have the capacity on many fronts, which of course it can buy, but the 50-year-old Petronas is a major and respected global player. Are we not on the same team?
Hopefully, the reply in Parliament this week suggested an agreement in January between Sarawak’s premier and PMX is the win-win solution that we seek. Sarawak now has greater control over natural gas resources in the state, except for liquefied natural gas (LNG), and no additional licence is required of Petronas and its subsidiaries to operate in the state.
But again, the devil will be in the details.
The muscle-flexing from Kuching is also seen as a recognition of the state’s role in shoring up the current government. It is obviously a phenomenon of coalition governments that the leaders will need to do some juggling acts to bring everyone, with differing interests and priorities, in line.
It is, of course, naive for anyone to think that Sarawak, or any others in its situation for that matter, will not wave that ubiquitous card in domestic and national politics.
But the rest of the country, we will still be scratching our heads on Sarawak’s end game as far as its roles and responsibilities in the union. Separate but together, married but living in different homes, with different rules? – February 7, 2025
State of the nation: the politics of oil and gas – Zainul Arifin
Sarawak's muscle-flexing belies Petronas’ silent strength in petroleum dispute
Zainul Arifin
Updated 3 days ago
7 February, 2025
9:00 PM MYT
THERE has been some noticeable swagger from Sarawak these days, which in itself is not a bad thing. Such flexing often comes from a position of renewed vigour and confidence. However, there is a hint of righteousness, too, a sort of this-is-our-time-after-you-have-wronged-us vibe.
The almost triumphant-like pronouncements by politicians from the state that Sarawak does and will do things better are, of course, cheered by Sarawakians, but the rest of the country might be slightly bemused by them.
In Sarawak, we are told that the civil servants get paid more, the schools will be better than the rest of the country, the university will be free, the lingua franca is English, and it does things differently, and better too. It will have a better airport, airline, ports, banks, industries, etc. Also if you are not Sarawakian, it will be harder to want to work in the state.
A caveat for all the above is that they are snippets over social media where context is often lacking. Yet they can be barometers of the political inclinations in Sarawak, telling us which way the wind is blowing and colour opinions of the state and its leaders.
Don’t they like us anymore?
These recent few years also saw the noise amped up a bit with disputes over the exploitation of the state’s resources, especially in the oil and gas sector. Sarawak’s Petros is taking national oil company Petronas to court on that.
Depending on who you asked, subject to their inclinations and interpretations of the law of the land, everyone could be wrong or right – either Sarawak has been denied its rights or it is being unreasonable.
Among others, the things being bandied about include the Malaysia Agreement 1963, signed by the parties for the formation of Malaysia, which touched on the terms and conditions of the union – the Petroleum Development Act 1974, which tasked Petronas as the body responsible for oil and gas resources in the country and the Sarawak Distribution of Gas Ordinance 2016, which among others give state company Petros the sole gas rights exploited in the state.
Just as we had thousands of virologists over social media during the Covid-19 era, we now see similar numbers of legal and constitutional experts over the internet where there is less desire to embark on clarity, but to shout and swear.
We dig deeper into the narratives that we hang our hats on, and remain steadfastly stubborn.
Yet, the question by the average Malaysian who is likely to be ignorant of the dots and crosses of legal treatises is: why go to court? To paraphrase a song, something is happening here but we are not sure what it is, do we?
The oil and gas industry is a significant contributor to the national economy, and more so for Sarawak. Its braggadocio over the past few years could be attributed to its stronger financial position arising from the 5% sales tax on oil and gas activities it has been collecting since 2019, which some suggest to be just under RM10 billion thus far. This will likely increase further over the years.
The desire for a win-win solution from the technocrats in Petronas and the prime minister’s measured response did not seem to calm the issues especially when oil and gas revenue can serve as grist for the political mill.
What will happen to Petronas in Sarawak? What will happen to Petronas? Will other states follow suit? Can’t things be resolved amicably?
The court case is also causing concern among investors keen to participate in the industry in the state, including in new growth sectors like carbon capturing where depleted oil and gas reservoirs are used to permanently store captured carbon from industries and power plants.
Petros is new and does not have the capacity on many fronts, which of course it can buy, but the 50-year-old Petronas is a major and respected global player. Are we not on the same team?
Hopefully, the reply in Parliament this week suggested an agreement in January between Sarawak’s premier and PMX is the win-win solution that we seek. Sarawak now has greater control over natural gas resources in the state, except for liquefied natural gas (LNG), and no additional licence is required of Petronas and its subsidiaries to operate in the state.
But again, the devil will be in the details.
The muscle-flexing from Kuching is also seen as a recognition of the state’s role in shoring up the current government. It is obviously a phenomenon of coalition governments that the leaders will need to do some juggling acts to bring everyone, with differing interests and priorities, in line.
It is, of course, naive for anyone to think that Sarawak, or any others in its situation for that matter, will not wave that ubiquitous card in domestic and national politics.
But the rest of the country, we will still be scratching our heads on Sarawak’s end game as far as its roles and responsibilities in the union. Separate but together, married but living in different homes, with different rules? – February 7, 2025
Veteran newsman Datuk Zainul Arifin is CEO of Big Boom Media which publishes Scoop
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