KUCHING, March 6 — Sarawak will assume full regulatory authority over the upstream and downstream aspects of the oil and gas industry in the state by July this year, Chief Minister Datuk Patinggi Abang Johari Openg announced tonight.
He said all persons and companies involved in the oil and gas industries in Sarawak, must henceforth, have the necessary licences, permits, leases and approvals required under either the Oil Mining Ordinance or the Gas Distribution Ordinance.
“They will be required to regularise their operations and activities to comply with all state laws including those related to the use and occupation of land,” he said at the launch of Petroleum Sarawak Berhad (Petros) here.
Abang Johari said the enforcement of the state laws will not jeopardise the interests or investments of Petronas and other companies already involved in the oil and gas industry in Sarawak whether upstream or downstream, but their business and operational activities must be aligned with the laws and regulations.
The chief minister said the State Cabinet has approved a Bill to amend the Oil Mining Ordinance to update its provisions and to provide better enforcement.
He said Bill will be tabled at the next sitting of the State Legislative Assembly.
“The State Legislative Assembly, in the exercise of its constitutional powers, has already passed the Gas Distribution Ordinance 2016 which will be brought into force on July 1, 2018,” Abang Johari said.
He said before Malaysia Day on September 16, 1963, Sarawak had already owned all the petroleum resources both onshore and offshore, in the Continental Shelf.
He explained that the state has complete control over the grant of prospecting, exploration and mining rights within the boundaries of Sarawak which by virtue of Article 2 of Federal Constitution cannot be altered without the approval of the state to be expressed by a law passed by the State Legislature.
“On Malaysia Day, the State has the constitutional rights to issue prospecting licences and mining leases under Item 2(c) of the State List in the Ninth Schedule of the Federal Constitution which provides that: Land, including permits and licences for prospecting for mines, mining leases and certificates are under the legislative authority of the State and therefore, by virtue of Article 80 within the executive authority of the State Government of Sarawak.
“The Federal Government’s right under Item 8(j) of Federal List in the Ninth Schedule is subject to Item 2(c) of State List.
“This means the Federal Government’s authority on oil and oilfields and the development of mineral resources, is subject to the State’s rights to grant mining rights for oil and natural gas within Sarawak.
“All laws passed by Parliament must not be inconsistent with the Federal Constitution: Article 4 declares that the Federal Constitution is the supreme law of the Federation.
“The Sarawak Oil Mining Ordinance was never repealed by any emergency laws promulgated when the 1969 Proclamation of Emergency was in force.
“The 1969 Proclamation of Emergency was annulled in 2011. Thus, Sarawak is constitutionally entitled to enforce the Oil Mining Ordinance and assert our constitutional authority over the rights to mine oil and gas in Sarawak,” he said.
On Petros, he said it will spearhead the state’s participation in the oil and gas sectors that are considered of strategic importance to the overall socio-economic development objectives of Sarawak.
“Petros will be granted rights to mine oil and natural gas in the State and be an important player in the upstream oil and gas industry. Such a licence has already been issued and will be handed to Petros in a little while during this ceremony.
“Given the significant role of Petros in Sarawak’s oil and gas sector, I believe, it is important for Petros to be strong, effective and efficient in performing its mandated roles.
“To achieve these, a delegation of oil and gas regulatory and supervisory authority by the State to Petros is mandatory.
“With this in mind, Petros must build on its strategic presence in Sarawak in order to grow and deliver sustainable economic benefits via its business model, while at the same time safeguarding the interests of our State Government and its resources.
“Accordingly, to ensure that Petros performs its mandated roles in a prudent manner, Petros is required to seek guidance from the state government for broad policy direction in the execution of its strategic roles and responsibilities,” the chief minister said.
Meanwhile Abang Johari announced oil and gas veteran Saau Kakok as the new chief executive officer of Petros.
Saau, a Bidayuh, spent almost 40 years of his career in the industry. His last position was Vice-President for Asia of a US-based independent oil company.
“Petros is fortunate to gain Saau’s experience, talent and vision. I am confident that Saau is the right person to lead Petros into the future, adding value to the careers of talented young Sarawakians while making Petros the best place to work,” he said.
