Voon Lee Shan urges Sarawak, Sabah governments to seek repeal of PDA74

 

By Simon Peter

KUCHING, March 12, 2025: Parti Bumi Kenyalang (PBK) president Voon Lee Shan (picture) today urged the Sarawak and Sabah governments to seek Petroleum Development Act 1974 (PDA74) be repealed and have all oil and gas resources be returned to the two states.

He said Petronas, through PDA74, has taken away the oil and gas resources from the two Borneo states, causing much loss to them.

“PDA74 is a short Act and only has ten sections. The Act gives exceptional wide powers to the prime minister to do almost anything concerning the control and direction of Petronas and all other matters mentioned in the Act,” Voon, a senior lawyer, said in a statement.

 He added the wide powers given in the Act could easily be subjected to abuse by the prime minister, saying that it does not impose any obligation  on the prime minister  to disclose anything in the management of Petronas in parliament.

“The prime minister is not accountable to parliament for his actions.

“At the same time, Petronas which was created as a corporation under the Companies Act 1965 and being not a statutory body could not be subjected to the scrutiny of the Auditor-General.

“It seems that the prime minister have access to moneys and assets of Petronas and can use them for any purpose the prime minister thinks fit and suitable, like acquisition of sick companies by Petronas to prevent the sick companies from collapsing and so on.

“It is doubtful whether the Malaysian Anti-Corruption Commission (MACC) has the power under the Malaysian Anti-Corruption Act 2009 to probe any abuse of power by the prime minister concerning the handling and use  moneys and assets of Petronas.    

“As it is now, it seems that the prime minister can control the production of crude oil and  gas and only prime minister knows how much crude oil and gas are extracted from Sarawak and Sabah.  

“There is nothing in the PDA74 to allow Sarawak and Sabah governments to find out from the  prime minister or from Petronas how much crude oil and gas been extracted by Petronas from Sarawak and Sabah in past years and where revenues from oil and gas been used or managed  by Petronas or by the prime minister.  

“There is also nothing in the PDA74 to allow the Sarawak and Sabah governments to be informed or to intervene the giving away of any oil producing areas to anybody or neighbouring countries permanently.  

“It seems that there is also nothing in PDA74 to prevent the prime minister to sign away permanently any oil producing areas in the shores of Sarawak and Sabah to anybody or to neighbouring countries,” Voon said.

 

 

Petronas, Petros should consider going to court to determine what "sole gas aggregator" actually means, asks Prof Chin

 

By Simon Peter

KUCHING, March 12, 2025: Petroliam Nasional Berhad (Petronas) and Petrol Sarawak Berhad (Petros) should consider asking the court to determine the meaning of “sole gas aggregator” that is a subject of different interpretations by both parties.

Professor of Asian Studies, University of Tasmania, Australia, Professor James Chin said it is his view that going to court is the most effective way to settle the matter.

“It appears that the agreement between Premier Tan Sri Abang Johari Openg and Prime Minister Datuk Seri Anwar Ibrahim is real, but only because both parties have differing interpretations of what was actually settled.

“So, does a deal exist? Yes, it does—a political deal, to be precise—but the crux lies in the details. These details seem to pertain more to the commercial sphere than the political one,” he said on his Facebook when commenting on a new article published in online news portal Free Malaysia Today.

However, he said both sides hesitate to pursue the matter to court, likely because it could unearth other inconvenient issues like Petroleum Development Act 1974 (PDA74) and Oil Mining Ordinance 1958 (OMO58).

“As a result, we can anticipate ongoing friction, with the Abang Johari and Anwar  needing to reconvene again to clarify the terms,” Chin said.

He said many Sarawakians feel that Sarawak is being bullied by Petronas, and many will view Gabungan Parti Sarawak (GPS) as negligent for not securing a clearer agreement back in January.

“Petronas is really behaving badly because it is not used to anymore taking a piece of its rice bowl,” he said, adding that it keeps forgetting that Sarawakians/Sabahans have been paying for Petronas's rice bowl since 1974.

“We are fed up; even in this 'deal'. it is lopsided with Petronas still keeping the LNG, where the bulk of the money is,” Chin said.

According to FMT, quoting a source, Petronas and Petros appear deadlocked in negotiations over gas rights, with Sarawak sticking to its original demands despite giving assurances to the contrary.

“Sarawak’s stance has not changed since last year although federal and Sarawak government leaders have announced that negotiations were progressing,” source told FMT.

The source said the Sarawak government is insisting that all domestic gas users, including liquefied natural gas (LNG) plants located in the state, must comply with its Distribution of Gas Ordinance 2016(DGO16) and buy their gas from Petros.

“Needless to say, such an arrangement is bound to disrupt existing commercial agreements Petronas has with end users in the state,” said the source.

On Feb 17, Anwar told Parliament that Sarawak had agreed that the Petroleum Development Act 1974 (PDA) will remain the overarching framework for governance in Malaysia’s oil and gas industry.

The prime minister also announced that all Petronas’s existing agreements will remain intact and governed entirely by the PDA, and that Petronas and its subsidiaries will not be obliged to comply with any additional requirements imposed under state law.

However, Anwar said Petros would be allowed to perform its role as Sarawak’s gas aggregator under the DGO, which “must be read together” with the PDA.

“The inability of both sides to come to a compromise highlights the complexity of having two overlapping laws.

“Both Petronas and Petros are adamant that they are exercising their strict legal rights, with Petronas pointing to the PDA and Petros to the DGO to support their respective positions,” said the source.

The source said this was why Anwar called for a “commercial solution” to resolve the long-running dispute.

“Unless a commercial compromise is achieved, both oil companies and their respective governments will find themselves in a ‘lose-lose’ position over the longer term,” the source said.

Earlier this week, Deputy Prime Minister Datuk Seri Fadillah Yusof said Petronas and Petros were still hammering out the details of their proposed collaboration.

He said Petros had recently submitted a letter to Petronas setting out its proposed terms, which have yet to be agreed upon.

Preparations for free tertiary education in Sarawak have been finalised, says Sagah

KUCHING, March 12, 2025: Sarawak Education, Innovation and Talent Development Minister Datuk Seri Roland Sagah Wee Inn (picture, right) today said all is set for the take-off of the free tertiary education at five state-owned higher institutions next year.

He said the preparations for the start of the free tertiary education have been finalised by the ministry and the higher institutions.

“We are only waiting for the disbursement of funds (from the state government),” he told reporters after the launch of Science, Technology, Engineering and Mathematics (STEM) Catalysts initiative for rural schools for the April-July, 2025 session.

He said the disbursement of funds by the state government is not a problem.

He said the first enrollment for free tertiary into these institutions will be held in February or March next year, after the results of the Sijil Pelajaran Malaysia (SPM) and Sijil Tinggi Pelajaran Malaysia (STPM) have been out.

He said his ministry does not impose quota on the number of students each institution will take, saying that the enrollment depends of the science courses they offer.

Sagah said the state government only provides free tertiary education to students who take up science courses, such as engineering, computer science and mathematics.

“However, arts courses such as finance, accountancy, law and psychology are included under the free tertiary education initiative,” he said, adding that the state still needs graduates in these subjects.

He said that other arts courses may be considered in stages in future.

He added students taking up mass communication course will not be offered free education, quipping that “there are too many reporters around”.

He said he will release the details of all the courses that come under the free tertiary education initiative in November this year.

In the meantime, he said he wants the students to study hard to enable to achieve good results in their SPM and STPM examinations that will entitle them to free tertiary education.

Sagah dismissed suggestions that rural students would be in a disadvantage position compared to their urban counterparts in their pursuits to take up science courses at the stated-owned institutions.

He said there is no study being carried out to say that the rural students are in a disadvantage position due to the rural environment.

“I believe that the rural students are as good in science subjects as their urban counterparts,” he added.

The five institutions are Swinburne University of Technology (Kuching campus), Curtin University of Technology (Miri campus), University Technology Sarawak in Sibu, I-CATS University College and Centre of Technology Excellence Sarawak.

On the STEM Catalysts for rural schools, he said his ministry has worked with Swinburne University of Technology, University of Technology Sarawak and Curtin  University to upskill the teachers to teach coding using the Raspberry Pi to the pupils since 2022.

He added coding is an essential skill, especially now with the advent of artificial intelligence or AI, saying that the future talents must master coding skills to fully harness the potential of AI.

“Studies have conclusively shown that coding trains the mind to solve problems systematically, logically and creatively.

“These are vital skills, no matter which path or career our students choose in their future,” he said.

He said his ministry has experimented with Catalysts in 2024 with schools in Kota Samarahan, Serian and Sri Aman, adding that it was a great success.

“We reached out to over 1,000 pupils in 12 schools. The main feedback we received was schools never seen such deep level of STEM engagement before, at least not at primary school level,” he said.

Sagah said for this year, the teams from his ministry will travel to 18  district education offices to engage with over 6,000 pupils in over 130 primary schools.

“We will start from Lundu in the south, to Kanowit in central Sarawak and on to Baram in the north,” he said.

 

Why Petronas-Petros dispute over gas distribution rights must be settled as soon as possible

 

By Simon Peter

Commentary: The Petronas-Petros gas distribution rights issue is far from over

Despite recent claims by Prime Minister Datuk Sri Anwar Ibrahim, the dispute between the Sarawak government and Petroliam Nasional Berhad (Petronas) over  the control of gas distribution in Sarawak is far from over.

The prime minister was reported by the media as saying that the dispute between Petronas and Petros over the gas distribution rights had been resolved in his meeting with Premier Datuk Patinggi Abang Johari Openg.

However, Minister in Prime Minister's Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said’s statement in parliament had made the issue rather murky and confused.

Her statement had also angered Sarawakians towards the federal government, particularly on Petronas only recognising Petros’ role as a gas aggregator minus the liquefied natural gas in Sarawak.

She claimed that Petronas and its subsidiaries did not require licensing and did not subject to any additional procedures to carry out petroleum operations in Sarawak beyond those stipulated under the PDA.

An upset Abang Johari declared that Azalina was giving misleading statement on the role of Petros as gas aggregator including LNG, saying that her statement was not “really accurate”.

What is being the gas aggregator then if LNG is excluded?

Both Anwar and Abang Johari had agreed to sort out the issue once and for all.

In the national interests, Abang Johari had stressed that he and the prime minister had reached an understandings that all parties respect federal and State laws including Petroleum Development Act 1974 (PDA 1974) and Distribution of Gas Ordinance 2026 (DGO 2016).

He said Petronas and Petros would work together as partners to advance national and state interests and revenues, and the interests of Sarawak would have to be prioritised.

Abang Johari had made it very clear that even though Petros took the role of gas aggregator, existing contracts entered into by Petronas and its subsidiaries were not affected to enable Petronas to fullfil its domestic and international contractual obligations.

Anwar’s follow-up statement  supported Abang Johari’s points on the Petronas-Petros issue.

The federal government, according to Anwar,  aspired to support Sarawak in engaging in oil and gas industry activities within the state and that both Petronas and Petros would have to move forward as partners to ensure the protection of the nation's and Sarawak's interests and benefits.

In the meantime, Sarawakians have to wait for the outcome of another round of meeting between Anwar and Abang Johari.

The Petronas-Petros issue has to be settled as soon as possible and must be based on a win-win situation.

The earlier the better and should not be dragged too long until the term of the unity government ends in 2027 or 2028. By then, it will be too late.

Abang Johari had made it known that the Gabungan Parti Sarawak (GPS) only supported  Anwar as prime minister until the end of his term.

However, that stand may change if the Petronas-Petros issue is amicably solved to the satisfaction of all parties.

The gas industry is a billion ringgit business, with Petronas and its subsidiaries  controlling and getting much of it.

Political pundits cited Tan Sri Muhyiddin Yassin, then the prime minister, as an example, who had a hand in helping to solve problem relating to the imposition of 5 per cent Sarawak State Sales Tax on petroleum products that was strongly opposed by Petronas.

They also would want to see if Anwar could do the same this time around.

It is recalled that the Kuching High Court had ruled that the Sarawak government had the constitutional and legal rights to impose the SST in a civil case involving the Sarawak government against Petronas.

However, Petronas filed an appeal in the Court of Appeal. It later withdrew the appeal, allowing the Sarawak government to proceed with the imposition of the SST.

Judge Azhahari Kamal Ramli, in giving his grounds of judgment, said he found that the power of the state to make law for imposing sales tax derived from Article 95B(3) of the Federal Constitution.

He said this Article was added to the Federal Constitution upon the recommendation of the Inter-Governmental Committee (IGC), prior to the formation of Malaysia that the Borneo states should have the power to impose sale tax, that any discriminatory rates would not be imposed on goods of the same type but of different origin.

The judge added the Article 95B(3) was added by Article 26 of the Malaysia Act 1963 to take effect from September 16, 1963, which provided that the legislatures of Sabah and Sarawak could also make laws for imposing of sales tax and any sales tax imposed in the states of Sabah and Sarawak should be deemed to be among the matters enumerated in the State List and not to the Federal List.

It is also recalled that the Federal Court, on June 22, 2018,  struck out Petronas’ application to haveexclusive right over oil and gas resources in Sarawak.

Chief Judge of Malaya Tan Sri Datuk Wira Ahmad Maarop, in dismissing the application, held that the declaration sought by Petronas did not come within the ambit of Article 4 of the Federal Constitution.

"In my view, the declaratory reliefs sought by the applicant do not come into the ambit of Article 4(3) and 4(4) of the Federal Constitution.

“Hence the reliefs sought by the applicant are not within the exclusive original jurisdiction of the federal court. The reliefs sought are within the constitution of the high court of Sarawak.

“Thus the question of leave on Article 4(4) of the Federal Constitution does not arise. The application is dismissed," Justice Ahmad Maarop said in his ruling.

A press statement from the Chief Minister’s Office said that the Federal Court’s decision paved the way for Sarawak to enforce its laws from July 1, 2018.

The statement added Petros would be delegated with the appropriate powers to implement the Oil Mining Ordinance (OMO) 1958.

In its court filing, Petronas sought a stay order in respect of the Sarawak government’s commencement to regulate upstream activities in the state under OMO 1958 beginning July 1, 2018.

Petronas was required to comply with the OMO and must have the requisite licences or leases, failing which the upstream activities carried out by Petronas would be illegal and appropriate action would be taken.

Petronas was seeking a declaration that the PDA was duly enacted by Parliament and that Petronas was the exclusive regulatory authority for the upstream industry throughout Malaysia, including in Sarawak.

However, Sarawak argued that the OMO 1958 was a law where the Sarawak state legislature had the legislative authority to regulate the granting of oil prospecting licences, oil exploration licences and oil mining leases.

Therefore, the state of Sarawak has the executive authority over the permits and for prospecting for mines and over mining leases and certificates.

According to Abang Johari,  Sarawak’s probable and proven reserves of petroleum represent 60.87 per cent of Malaysia's total reserves while Sabah’s make up around 18.8 per cent.

This explains why Sarawak wants to have a major share in the gas industry, not a bystander.

Let’s take a look at the Federal Constitution.

Ninth Schedule of the Federal Constitution: 

Section 8 of the Federal List: Trade, commerce and industry, including-

(j)Subject to item 2 (c) in the State List: Development of mineral resources; mines, mining, minerals and mineral ores; oils and oilfields; purchase, sale, import and export of minerals and mineral ores; petroleum products; regulation of labour and safety in mines and oilfields.

Ninth Schedule of the Federal Constitution:

Section 2 of the State List: Except with respect to the Federal Territories of Kuala Lumpur and Labuan, land including-

(c)Permits and licences for prospecting for mines; mining leases and certificates.

Petroleum Development Act 1974:

2. (1) The entire ownership in, and the exclusive rights, powers, liberties and privileges of exploring, exploiting, winning and obtaining petroleum whether onshore or offshore of Malaysia shall be vested

in a Corporation to be incorporated under the Companies Act 1965 or under the law relating to incorporation of companies.

(2) The vesting of the ownership, rights, powers, liberties and privileges referred to in subsection (1) shall take effect on the execution of an instrument in the form contained in the Schedule to this Act.

(3) The ownership and the exclusive rights, powers, liberties and privileges so vested shall be irrevocable and shall enure for the benefit of the Corporation and its successor.

The main amendments to the Oil Mining Ordinance 1958:

1.Section 8 stipulates that a licence or lease shall not b assigned or transferred without the prior approval of  the Majlis Mesyuarat Kerajaan Negeri

2. Section 8A on the restriction on award of contract by a licencee to lessee

3. Section 19 and Section 27 empower the Majlis Mesyuarat Kerajaan Negeri to grant oil prospecting licence and oil mining lease whether or not the applicant had previously been granted an oil exploration licence;

4. Section 33 on the overriding control by the State Minerals Management Authority established under the Mineral Ordinances 2004 (Cap 56). This amendment would give the authority the power to issue directions or guidelines to the lessee

5. Section 33B on the delegation by the authority. This means the section would allow the authority to delegate any of its power, functions, duties or responsibilities conferred by OMO to:

(i) The Minister

(ii) A Committee formed by the authority comprising its members or any other persons named in the notification

(iii) Any other public officer,or

(iv) Any person

6. Section 33C is incorporated to provide the state with the power to issue a single licence and lease comprising of oil exploration, oil prospecting and oil mining activities