Chief Minister Datuk Patinggi Abang Johari Openg's
address at the launch of Petroleum Sarawak Berhad (Petros) on March 6, 2018
• Foremost,
I wish to convey my warmest greetings to you all present here tonight, which
includes players from the oil and gas sectors, the GLCs, corporations and
everyone who come from near and far to be with us at the official launching of
Petroleum Sarawak Berhad (PETROS).
Ladies and Gentlemen,
• Today
marks yet another milestone in the State’s Oil and Gas inclusion efforts and
especially for Sarawak, simply because we have a new source to enable us to
increase the depth of our state’s resources management model.
• My
State cabinet and I, are very happy indeed because we are taking the bull by
the horns in our efforts to transform our State economy in order to leap frog
to new heights. So this event tonight is a momentous occasion not only for
Sarawak but also for Malaysia.
Distinguished Guests, Ladies and Gentlemen
Historical background
• Let me
begin by sharing a few words about the State of Sarawak’s humble journey in the
Oil and Gas industry.
• The Oil
mining in Sarawak started on 22.12.1910 when the first oil well in Miri was
commissioned. [Photo of the “old lady” in Miri]
• In
1920, the Rajah issued what was known as “the Shell Concession Order” to
designate the area in Miri for the exploration and mining of Oil by Sarawak
Oilfield Limited – which was owned by Shell. [Copy of Order to be displayed]
• Exploration
for oil offshore Baram area took place in the 1930s by the Dutch and the
British.
• In
1952, the Sarawak Colonial Government issued an Oil Mining Lease, in the form
of a Deed, to Sarawak Oilfields Limited with the liberties, right and
privileges to explore and mine all “the petroleum lying or within under or
throughout the territory comprising the Colony of Sarawak including lands
beneath all territorial waters….” [Map to be displayed].
• In
1954, the Queen in Council passed the Sarawak (Alteration of Boundaries) Order
to extend the boundaries of Sarawak to include the area being the seabed and
its subsoil which lies beneath the high seas contiguous to the territorial
waters of Sarawak. [Display the Order]
• In
1958, Council Negeri passed the Oil Mining Ordinance to “make better provision
in the law relating to oil mining in Sarawak and its Continental Shelf”.
[Display long title of Ordinance].
Ladies and Gentlemen,
STATE’S RIGHTS TO OIL REMAIN IN TACT AFTER MALAYSIA DAY
• Therefore,
before Malaysia Day (16 September, 1963), Sarawak already owned all the
petroleum resources both onshore and offshore, in the Continental Shelf, and
have complete control over the grant of prospecting, exploration and mining rights
within the boundaries of Sarawak which by virtue of Article 2 of Federal
Constitution cannot be altered without the approval of the Sarawak to be
expressed by a law passed by the State Legislature. [Display Articles 1 and 2
of Federal Constitution].
• On
Malaysia Day, the State has the constitutional rights to issue prospecting
licences, mining leases under Item 2(c) of the State List in Ninth Schedule of
Federal Constitution which provides that “Land, including permits and licences
for prospecting for mines; mining leases and certificates” are under the
legislative authority of the State and therefore, by virtue of Article 80
within the executive authority of the State Government of Sarawak” [Display
Item 2(c)]
• Federal
Government’s right under Item 8(j) of Federal List in Ninth Schedule is subject
to Item 2(c) of State List. This means the Federal Government’s authority on
oil and oilfields and the development of mineral resources, is subject to the
State’s rights to grant mining rights for oil and natural gas within Sarawak.
[Display Item 8(j)]
• All
laws passed by Parliament must not be inconsistent with Federal Constitution:
Article 4 declares that the Federal Constitution is the supreme law of the
Federation. [Display Article 4]
• Sarawak
Oil Mining Ordinance was never repealed by any emergency laws promulgated when
the 1969 Proclamation of Emergency was in force.
• The
1969 Proclamation of Emergency was annulled in 2011. Thus, Sarawak is
constitutionally entitled to enforce the Oil Mining Ordinance and assert our
constitutional authority over the rights to mine oil and gas in Sarawak.
PRIME MINISTER’S ASSURANCE
• The
YAB Prime Minister has stated categorically that rights inadvertently taken
away from the State (including that is, during the period of the said
Emergency) will be given back to the State. [Display News report]
• The
State Cabinet has approved a Bill to amend the Oil Mining Ordinance to update
its provisions and to provide better enforcement thereof. This Bill will be
tabled at the next sitting of the State Legislative Assembly.
• The
State Legislative Assembly, in the exercise of its constitutional powers, has
already passed the Gas Distribution Ordinance 2016. This Ordinance will be
brought into force on 1st July, 2018.
Distinguished Guests, Ladies and Gentlemen
COMPLIANCE WITH STATE LAWS
• Therefore,
by July this year, the State will assume full regulatory authority over the
upstream and downstream aspects of the oil and gas industry in Sarawak.
• All
persons and companies involved in the oil and gas industries in Sarawak, must
henceforth, have the necessary licences, permits, leases and approvals required
under either the Oil Mining Ordinance or the Gas Distribution Ordinance. In
other words, they are required to regularize their operations and activities to
comply with all State laws including those relating to the use and occupation
of land.
• The
enforcement of our State laws will not jeopardize the interests or investments
of Petronas and other companies already involved in the Oil and Gas industry in
Sarawak, whether upstream or downstream, but, their business and operational
activities must be aligned with our laws and regulations.
Ladies and Gentlemen
PETROS AND ITS ROLE
• The
Government incorporated Petroleum Sarawak Berhad (“PETROS”) to spearhead the
State’s participation in the Oil and Gas sectors that are considered of
strategic importance to the overall socio-economic development objectives of
Sarawak.
• PETROS
will be granted rights to mine oil and natural gas in the State and be an
important player in the upstream Oil and Gas industry. Initially, such a
Licence has been issued and will be handed to PETROS in a little while during
this ceremony.
• Given
the significant role of PETROS in Sarawak oil and gas sector, I believe, it is
important for PETROS to be strong, effective and efficient in performing its
mandated roles. To achieve these, delegation of Oil and Gas regulatory and
supervisory authority by the State to PETROS is mandatory.
• With
this in mind, PETROS must build on its strategic presence in Sarawak in order
to grow and to deliver sustainable economic benefits via its business model,
while at the same time safeguarding the interests of our State Government and
its resources.
• Accordingly,
to ensure that PETROS performs its mandated roles in a prudent manner, PETROS
is required to seek guidance from the Sarawak Government for broad policy
direction in the execution of its strategic roles and responsibilities.
Ladies and Gentlemen,
PETROS TEAM
• In
August last year, I appointed PETROS first Board of Directors. Early this year,
I have appointed Datin Josephine Hilary Dom, as an additional board member.
• Josephine
is a respected individual in the field of finance and accounting has been
around in the Malaysian corporate world for more than three decades now.
• As I
speak, PETROS already have a Chief Executive Officer (CEO). He is an
experienced and professional individual in the Oil and Gas fraternity that will
lead a competent and high integrity PETROS operational team.
Ladies and Gentlemen,
• I am
delighted to introduce here that Mr. SAAU KAKOK is officially the new CEO of
PETROS. Saau, a Bidayuh, spent almost 40 years of his career in the Oil and Gas
industry. His last position was the Vice-President for Asia of a US-based
independent Oil company.
• PETROS
is fortunate to gain Saau’s experience, talent and vision. I am confident that
Saau, is the right person to lead PETROS into the future, adding value to the
careers of talented young Sarawakians while making PETROS the best place to
work.
• Like
what I have said, Sarawakians indeed have a good pool of talents with the
experience and expertise in Oil and Gas industry and their involvement will be
further enhanced with participation in contracts and supply of services offered
by PETROS. The State Government will issue guidelines to PETROS to ensure
greater and more meaningful participation by Sarawakians and Sarawak companies
in this sector.
• Since
1975, Liquefied Natural Gas from Sarawak have been exported by PETRONAS and the
revenues so derived have contributed tremendously to the national economy and
the development of the Federation. By the exercise of our constitutional
rights, the State Government is fulfilling the aspirations of the people of
Sarawak that the additional revenues from Oil and Gas will accelerate
industrial development and economic progress as to enable Malaysia as a whole
to achieve a high income economy by the year 2030.
• The
State Government would like to see PETROS work alongside with PETRONAS both in
the upstream and downstream sectors of the oil and gas industry. Both Companies
can contribute significantly towards the advancement of the Oil and Gas
industry in Malaysia and the economic progress and prosperity of our Nation.
DEVOLUTION OF POWER
• Tonight
I would like to announce to Sarawakians as I have promised in Sibu recently.
YAB Prime Minister has agreed to return to the State, power that has been
inadvertently eroded over the years. Therefore, the State will exploit our
natural resources Oil and Gas which is constitutionally under the State List as
per Ninth Schedule of the Federal Constitution.
• Indeed,
the formation of PETROS and the exercising of the constitutional rights under
item 2(c) of the State List and 8(j) of the Federal List as provided in the
Ninth Schedule of the Federal Constitution is the outcome of the discussion on
Devolution of Power between the State and Federal Government.
• I
would like therefore to thank the YAB Prime Minister for agreeing to give back
the power that has been inadvertently eroded over the years.
• The launching of PETROS tonight is a clear
testimony that substantial progress has been achieved in the ongoing discussion
on Devolution of Power.
• With
the continued support of the people for the Barisan Nasional, more progress
will be made so as to meet the aspirations of Sarawakians that the State of
Sarawak to attain the level of development of the more developed States in
peninsular Malaysia by having more revenues from our Oil, Gas and other mineral
resources to fund the State Government’s development agenda and the initiatives
launched by me for a Digital Economy for Sarawak.
Conclusion
Distinguished Guests, Ladies and Gentlemen,
I would like to conclude by reiterating the importance
for all of us as Malaysians, working together to address our common challenges
as we strive to enable Sarawak to benefit from this limited natural resources
management initiative.
Once again I wish to thank you all presence tonight to
see through the state to develop even at a greater phase with policies like
this creation of PETROS.
I wish PETROS, its Board of Directors, new CEO every
success in the discharge of their responsibilities to spearhead the oil and gas
industry to a new era where the State not only controls and regulates this
industry but the State and our people will truly benefit from the oil and
natural gas resources which the State is endowed with.
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