Sabah politicians upset by Petronas’ legal bid

Tracy Patrick

 | June 6, 2018 

Upko's Arthur Sen says the company is claiming resources it doesn't own while LDP's Teo Chee Kang demands intervention by the state government.

Sabah reportedly has the largest oil reserve in Malaysia. (Bernama pic)

KOTA KINABALU: Two Sabah politicians have denounced Petronas for seeking a court declaration that it owns all petroleum resources in the country.

Upko Youth chief Arthur Sen said Petronas was trying to claim resources that did not belong to it while Liberal Democratic Party president Teo Chee Kang demanded intervention by the state government.

Petronas announced in a media statement on Monday that it had filed an application with the Federal Court asking it to declare that the Petroleum Development Act 1974 (PDA) gives it exclusive ownership of Malaysia’s petroleum resources and makes it the regulator of the upstream industry for the whole country.

Sen told FMT the company’s statement showed it was ignoring laws other than the PDA, such as the state constitutions of Sabah and Sarawak.

He noted that under those constitutions, the two states are owners of all lands within their borders, including the areas in the sea, and any move to alter the boundaries of either state must be approved by its legislative assembly.

Former Sabah chief minister Harris Salleh did not seek the approval of the state assembly before signing the PDA in 1976. The act entitles every oil-producing state to a cash payment of 5% of the total value of oil and gas extracted from within its borders.

“The court must hear what the real owners of these resources, Sarawak and Sabah, have to say,” Sen said.

Teo meanwhile said the Sabah government must consider itself an interested party in the Petronas suit and should not be content with expressing concern through press statements. It must intervene in the case, he added.

“Whatever ruling may be made by the Federal Court will surely have far reaching implications on Sabah as we are the state with the largest oil reserve in Malaysia,” he said.

Teo also said the Sabah State Rights Committee had made reference to the issue in its report to the previous state government. He was the chairman of the committee.

He demanded that the present government clarify its stand on the issue, noting that Pakatan Harapan had often promised 20% oil royalty to Sabah and Sarawak.

“Now that it has formed the federal government and the Sabah state government, PH must honour the promise without delay,” he said.

Petronas’ statement came in the wake of reports that the new federal government would seek higher contributions from it to offset the shortfall in revenue resulting from the abolition of the goods and services tax.

Last March, the Sarawak government asserted its rights over petroleum resources in the state, saying it planned to assume full regulatory authority on upstream and downstream activities in July.

The state has formed its own oil and gas company, Petroleum Sarawak Bhd (Petros), for the purpose.