With so many members of parliament from Sarawak and Sabah as well as non-governmental organisations speaking their minds on oil and gas ownership and Malaysia Agreement 1963 (MA63), the replies from Prime Minister Anwar Ibrahim are much awaited by Sarawakians and Sabahans.
Caption: Sarawakians and Sabahans are anxiously waiting for his answers on Petronas' legal challenge, MA63 and oil and gas
The issues at hands are Petronas taking action against the federal government and Sarawak government and the subsequent reply by Minister in the Prime Minister’s Department Azalina Othman Said in Parliament on MA63 and oil and gas.
The disappointment and frustration as expressed by the MPs during the debate on the motion of thanks for the Royal Address in Parliament is understandable.
Both Willie Mongin (MP for Puncak Borneo) and Doris Sophia Brodie (MP for Sri Aman) have asked identical question: Whether Petronas has the blessing or consent of the federal government and the prime minister before going to court?
Petronas is a wholly-owned federal government entity and it comes under the Prime Minister’s Department.
That is why Sarawakians (and Sabahans) are waiting anxiously for the answers from the prime minister.
The MPs questioned the timing of Petronas’ legal challenge in the light of the joint declaration signed by Anwar and Sarawak Premier Abang Johari Openg, which among other things, related to oil and gas found within Sarawak’s boundary.
Willie lamented that Petronas’ decision to drag both the federal and Sarawak state governments into the fray was "deeply concerning for Sarawakians", particularly after Anwar and Abang Johari last year had signed a joint declaration to commit both parties to negotiate in the spirit of MA63.
On Jan 12, Petronas filed a motion at the Federal Court seeking clarity on the legal and regulatory framework governing its operations in Sarawak, naming both the federal and Sarawak state governments as respondents.
The application sought 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.
Azalina’s reply to a question raised by Saratok MP Ali Biju raised the blood temperatures among the MPs from Sarawak and Sabah in Parliament.
She replied 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, pointing out that the industry is determined by federal legislation, particularly the Petroleum Development Act 1974 which vests Petronas with petroleum.
Ali asked the prime minister to state the federal government’s latest stance on Sarawak’s claims relating to the Order in Council 1954 and the Territorial Seas Act 2012, as well as the extent to which the MA63 negotiations can avoid overlapping powers between Petros and Petronas.
Many MPs from the two Borneo regions who spoke in Parliament described her interpretation of MA63 as narrow and does not take into account the historical context and laws of each region holistically.
Bandar Kuching MP Dr Kelvin Yii, for example, stated that 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 to be enacted, in the first place.
He said MA63 is not an ordinary document, but 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, Yii said is a fundamental misunderstanding of how the constitutional compact works.
Ba’Kelalan Sarawak Legislative Member (SLM) Baru Bian, who is also a senior lawyer, said that Sarawak has never surrendered or transferred the oil and gas ownership or regulatory authority to the federation of Malaysia in MA63 or its accompanying instruments.
He said oil and gas, being resources beneath land and territorial waters, fall squarely within this domain unless expressly transferred—which they were not.
He said under constitutional principles, power not expressly ceded remain with the original authority.
For the record, Anwar and Abang Johari, on May 21, 2025, signed a joint declaration, reaching an understanding on matters involving Petronas and Petros.
At a joint press conference, Anwar, who is also Finance Minister, said the agreement represented a step forward in national and state development through cooperation between Petronas and Petros.
He said this understanding, in principle, had been discussed earlier with the premier, taking into account the parameters that recognise both the Petroleum Development Act (PDA) 1974 and Sarawak’s amended Distribution of Gas Ordinance (DGO) 2016.
Anwar said the agreement reflected Sarawak’s growing maturity and capability, including the establishment of a state oil company with significant potential.
He added that the understanding ensured Petronas’ role would remain intact, while Petros’ position in Sarawak would be formally recognised.
The prime minister stressed that Petronas’ role is not diminished. It continues to operate as usual, but now within a framework that also takes into account Sarawak’s enhanced responsibilities and Petros’ role.
In a press statement the following day, Abang Johari expressed his gratitude that the federal government has honoured the aspirations and constitutional rights of Sarawak as enshrined under the federal Constitution, MA63 and the Inter-Governmental Committee Report (IGC).
On Feb 17, 2024, Anwar announced in Parliament that Petros would be the aggregator for oil and gas in Sarawak beginning March 1, 2025, via the Distribution of Gas Ordinance 2016 (DGO).
On Jan 15 this year, Abang Johari commended Anwar’s recognition of Petros as the state's gas aggregator. He said the state government and Petros would work closely with the federal government and Petronas “to ensure that Petros carries out its role as the sole gas aggregator without interruption to the supply of gas for consumers, including investors.
In the light of these developments, Petronas’ legal action can be described as shocking and surprising to the state government and Petros, and perhaps, not the federal government, being the sole shareholder of Petronas.
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