Give 30% stake in Petronas, 30% membership of its board of directors to Sarawak as a way to resolve Petros-Petronas dispute, suggests Chieng Jen

KUALA LUMPUR, Jan 29 2026: Stampin MP Chong Chieng Jen has suggested that Sarawak be given a 30 per cent stake in Petronas and 30 per cent of the members of the Petronas board of directors consisting of Sarawakians.

Chong Chieng Jen: Referral to the court is not a good way to resolve this dispute because, through the court, it is winner takes all and loser loses all. 

He said this is a way to resolve the on-going dispute between Petros and Petronas.

“With a 30 per cent equity stake, Sarawak will be entitled to 30 per cent of all dividends paid by Petronas in the future while Petronas remains the main regulator in the country.

“Whatever success Petronas has, Sarawak owns 30 per cent. Let us progress and prosper together,” Chong said during the debate on the motion of thanks on the Royal Address in Parliament today.

He said although Prime Minister Anwar Ibrahim together with Sarawak Premier Abang Johari Openg have announced several times that a settlement agreement between Petros and Petronas has been reached, “we still see the two companies fighting each other in court”.

“In my opinion, the dispute between Petros and Petronas will continue forever because one person's gain is another's loss.

“As long as there are two parties claiming rights to the same natural resources, there is bound to be conflict.

“Referral to the court is not a good way to resolve this dispute because, through the court, it is winner takes all and loser loses all.

“Either way, it is not good for the country,” Chong, who is also Sarawak DAP chairman, said.

On Jan 12, 2026, Petronas filed a motion at the Federal Court in Putrajaya to seek clarity on the applicable regulatory framework governing its operations in Sarawak.

The oil company named the federal government and Sarawak government as respondents.

The application seeks for determination by the Federal Court on the legal position applicable to Petronas’ operations in Sarawak, to ensure that the company continues to operate in full compliance with the applicable laws and sound governance practices.

It is not intended to challenge Sarawak’s development aspirations or hinder the role of Petros in the state’s energy sector.

The decision follows constructive engagements since 2024 with Petros and both the federal and state governments through a series of dialogues and negotiations.

While progress has been made on many commercial arrangements and partnerships – including the signing of Commercial Settlement Agreement (CSA) in 2020 – there have been differences which led to uncertainty in respect of the obligations applicable to Petronas.

"Sarawak never surrendered or transferred oil and gas ownship or regulatory authority to the Federation of Malaysia"

KUCHING, Jan 29 2026: Progressive Democratic Party (PDP) vice president Baru Bian today reminded federal minister Azalina Othman Said that Sarawak has never surrendered or transferred the oil and gas ownership or regulatory authority to the federation of Malaysia in the Malaysia Agreement 1963 (MA63) or its accompanying instruments.

Baru Bian: Oil and gas, being resources beneath land and territorial waters, fall squarely within this domain unless expressly transferred—which they were not. 

The Ba’Kelalan Sarawak Legislative Member (SLM) said under constitutional principles, power not expressly ceded remain with the original authority.

He said he disagreed with Azalina’s statement asserting that there is “nothing in the Malaysia Agreement 1963 (MA63) on oil and gas ownership and regulation.”

“While it is true that MA63 does not explicitly spell out oil and gas ownership or regulatory powers, constitutional interpretation cannot be reduced to literal silence alone.

 “A proper reading of MA63 must take into account historical jurisdiction, pre-Malaysia laws, and the legal position of Sarawak at the time of the formation of Malaysia,” he said.

 He stressed that before September 16 1963, Sarawak was a self-governing territory with clear jurisdiction over its land and natural resources.

“This included petroleum resources, which were regulated under laws such as the Sarawak Oil Mining Ordinance and related legislation in force prior to Malaysia’s formation,” he said.

Baru, a practising lawyer, pointed out that MA63 must be read with the Inter-Governmental Committee (IGC) Report.

He added the IGC Report, which forms the backbone of MA63, consistently affirms that Borneo States were to retain control over land and natural resources.

“Oil and gas, being resources beneath land and territorial waters, fall squarely within this domain unless expressly transferred—which they were not,” he said.

He said the enactment of the Petroleum Development Act 1974 (PDA74) Is evidence of lack of federal jurisdiction.

He added that the enactment of PDA itself is telling, saying that if the federal government already possessed inherent constitutional jurisdiction over petroleum resources, there would have been no necessity for Parliament to pass a law to vest ownership in Petronas.

“Legislation is not enacted to claim powers already possessed; it is enacted to create or acquire authority that did not previously exist.

“The PDA is therefore strong evidence that petroleum jurisdiction did not originally lie with the federal government,” he said.

Baru said constitutional interpretation must be historical and purposive, saying that MA63 is not an ordinary agreement; it is a foundational constitutional compact.

He said courts, scholars, and constitutional practice consistently affirm that such documents must be interpreted purposively, with due regard to historical context and the intentions of the parties at the time.

“To argue that the absence of explicit wording extinguishes Sarawak’s original rights is both legally

unsound and historically inaccurate,” he argued.

He stated that respecting MA63 is about constitutional fidelity, not politics.

He said this issue is not about confrontation with the federal government, nor is it about undermining national unity.

“It is about honouring the constitutional guarantees upon which Malaysia was formed.

“Sarawak’s position on oil and gas is rooted in law, history, and constitutional principle. It deserves serious engagement—not dismissal based on a narrow textual reading,” he said.

He stressed that the assertion that MA63 is irrelevant to oil and gas because it is silent on the matter oversimplifies a complex constitutional reality.

He said silence does not mean surrender, saying that history, law, and subsequent legislation all point to the same conclusion that Sarawak never relinquished its original jurisdiction over oil and gas.

“A mature federation must be willing to confront these truths honestly, in the spirit of MA63 and genuine federalism,” he added.

 

"MA63 was never a statute about pipes or drilling licenses. It is Malaysia’s birth certificate," Dr Kelvin Yii tells Azalina

KUALA LUMPUR, Jan 29 2026: Bandar Kuching MP Dr Kelvin Yii has told federal minister Azalina Othman Said that her interpretation of the Malaysia Agreement 1963 (MA63) is narrow and does not take into account the historical context and laws of each region holistically.

Bandar Kuching MP Dr Kelvin Yii: Here is a historical truth that we must not forget: If the federal government had the original, constitutional title to petroleum, then there would be no need for the Petroleum Development Act 1974 & the Territorial Sea Act 2012.  

He said MA63 is not just about discussing resources, but about discussing the foundation of Malaysian federation.

“We are here to talk about a promise that is carved not in the sand, but in our highest law: the Federal Constitution, which was born from MA63,” he said during the debate on motion of thanks on the Royal Address in Parliament today.

“MA63 is not an ordinary document. It is a nation-building contract. It is the legal and political foundation on which Malaysia was formed as a federation of distinct entities, namely Malaya, Sabah and Sarawak, each with its own history, laws and sovereign nature.

“To claim that MA63 is irrelevant to natural resources simply because the words “oil and gas” do not appear verbatim is a fundamental misunderstanding of how the constitutional compact works,” Dr Yii said.

“This narrow reading is “strategically incomplete” and misses the purpose of MA63, which is not to list every sector, but to safeguard Sarawak’s autonomy and equal status as a founding partner of Malaysia.

“Let us be clear: MA63 was never a statute about pipes or drilling licenses. It is Malaysia’s birth certificate. Nor can it be read exclusively in isolation,” he added.

He said to understand its true meaning and intent, MA63 must be read in conjunction with the entire body of founding documents, especially the Intergovernmental Committee (IGC) Report on which it is based.

He stressed that it is this collective agreement that determines how sovereignty, legislative power and economic control will be divided, saying “its legal force is enshrined in the Federal Constitution itself.”

Yii said the  Constitution is clear that land and natural resources are State matters, stating that this was true in 1963, and it remains true today.

“For Sabah and Sarawak, this is further protected by specific guarantees such as Article 95D,” he argued.

Yii said the principle of state ownership is absolute and rooted in the definition of land, precisely, the Sarawak Land Code defines state land as including the sea within its extended boundaries.

“What was once called Crown Land before 1963, became, definitively, state land after Malaysia Day,” he pointed out.

“Why? Because when sovereignty was transferred by the Queen under MA63, it was transferred to the Sarawak government, not to the federation.

“Sovereignty over Sarawak, and with it the ownership and possession of the land and resources in Sarawak, was never vested in the federal government.

“This position was reinforced during our period of "self-governance", from July 22, 1963, until we helped form Malaysia on September 16 of the same year,” he said.

Dr Yii reminds Azalina that oil and gas do not float in the air, but are found underground and under the seabed.

“Here is a historical truth that we must not forget: If the federal government had the original, constitutional title to petroleum, then there would be no need for the Petroleum Development Act 1974 & the Territorial Sea Act 2012.

“Whether we agree or disagree with this act or who passed it first is another discussion.

“However, this Act exists for one reason only, that is, because the ownership was not federal in the first place.

“Parliament enacted the law to gain control, not to confirm existing rights.

“So, when Sarawak exercised its rights under the Oil Mining Ordinance 1958, it was not an act of protest.

“It was an act of legitimate continuation. It is the exercise of power and sovereignty that is the basis for the formation of a federation and in my view, a right that should not have been surrendered in the first place.

“And I know that some aspects of this issue are now under consideration in the courts and I think that is the most appropriate arena to determine the validity of the interpretation of the constitution and our rights under MA63.

“I am confident in the rights that we have and await the decision of the court,” he said.

He also told Azalina that no rational government or territory would enter into a federation only to surrender its sovereignty and its major natural resources without a clear agreement.

“Acts of Parliament do not override constitutional structure. Political convenience does not defeat the conditions of establishment. Gradual centralization does not extinguish

“The rights of Sabah and Sarawak are not a demand. They are a constitutional legacy, born of sovereign ownership that was never ceded.

“It is time that legacy is respected, fully, according to the original offer.

“We are not asking above and beyond, but what is afforded and promised to our forefathers during the formation of Malaysia,” he said.

In a written reply to a question raised by Saratok Member of Parliament Ali Biju in the Dewan Rakyat on January 26, Minister in the Prime Minister's Department (Law and Institutional Reform) Azalina Othman Said stated that MA63 is a fundamental document for the formation of Malaysia but does not contain provisions relating to the ownership, management or regulation of oil and gas, in addition to stressing that the industry is determined by federal legislation, particularly the Petroleum Development Act 1974 which vests Petronas with petroleum.