Petros says to review High Court's written judgment before considering taking appropriate legal steps

KUCHING, Feb 25 2026: Petroleum Sarawak Berhad (Petros) said it will review the written judgment of the High Court carefully and consider the appropriate legal steps in accordance with the law. 

The state oil company said the High Court’s decision does not impair its ability to pursue further legal actions to seek clarity on its rights and position under the Distribution Gas Ordinance 2016 (DGO2016).  

“The case decided today on the unconscionable call of the bank guarantee under the Sarawak Gas Sale Agreement (GSA) was based solely on the technical grounds relating to the bank guarantee,” Petros said in a statement when referring to the High Court’s decision

.It said that the court did not make any decision on the underlying legality of the Sarawak GSA, nor did it rule on the merits of the constitutional arguments concerning the DGO 2016.

Early today, the court dismissed Petros’ application to declare Petroliam Nasional Berhad's (Petronas) bank guarantee claim invalid and unconstitutional.

The decision was made by Judge Faridz Gohim Abdullah who ruled that Petronas' claim for the bank guarantee amounting to RM7.95 million was valid.

He explained that Petros failed to prove that the claim on the bank guarantee was unreasonable or unlawful.

The judge said Petronas' claim on the bank guarantee amounting to RM7.95 million is in line with the terms of the bank guarantee which is 'on-demand' and unconditional.

The dispute arose after Petronas made a claim against the bank guarantee following Petros' failure to settle payment for gas supplies in August 2024.

Petros argued that Petronas did not have a valid licence under the DGO 2016 to supply gas in Sarawak, while Petronas insisted that it operated under the Petroleum Development Act 1974 (PDA 1974), a Federal law which it said prevailed over state laws in the event of a conflict.

The court ruled that the issue of overlap between Federal and state law, including the question of legal validity, falls within the exclusive original jurisdiction of the Federal Court and cannot be decided in these proceedings.

Petros was represented by  Cecil Abraham, Sim Hui Chuang, Lim Lip Tze and Rosalie Tien, while Petronas was represented by Cyrus Das, Khoo Guan Huat and Alex Ngu Sze Sha.Sarawak State Legal Adviseri Fong Joo Chung acted as an observer on behalf of the Sarawak government.