Sarawak minister says Petronas asset sale would complicate matters

Dr Mahathir had earlier said that the federal government could sell Petronas shares privately to states such as Sarawak, Sabah, Terengganu and Kelantan. — Reuters pic
Dr Mahathir had earlier said that the federal government could sell Petronas shares privately to states such as Sarawak, Sabah, Terengganu and Kelantan. — Reuters pic

KUCHING, Dec 12 — A Sarawak minister today warned that existing disputes will become more complicated if Petroliam Nasional Berhad (Petronas) sold assets to oil-producing states such as Sarawak without resolving them.

State Tourism, Arts and Culture Minister Datuk Abdul Karim Rahman Hamzah said such sales should only be decided after ending negotiations on disputes involving the Petroleum Development Act 1974 (PDA) and the Territorial Sea Act 2012 (TSA).

 “We are still having doubts on the legitimacy of the PDA which empowers Petronas the rights over oil and resources found within the territorial waters of Sarawak and Sabah,” he told reporters after receiving High Court, Court of Appeal and Federal Court gowns from former Federal Court judge Tan Sri Sulong Matjeraie on behalf of the Sarawak Museum.

He maintained the state’s argument that the PDA was enacted while an emergency was in effect, meaning the consent of state governments in Sarawak and Sabah had not been required despite the law affecting the extraction of their resources.

He said the validity of the PDA could now be questioned as the Emergency was formally lifted in 2011.

“Perhaps, the court can decide on the legality,” he stressed.

He said that under normal circumstances, the law would have needed the consent of the states’ government and lawmakers.

“Therefore, the sale of assets of Petronas in Sarawak and Sabah could affect the negotiations between the states of Sarawak and Sabah with the federal government and Petronas,” Karim, who is a lawyer by training, stressed.

“Everyone knows that Petronas’ main areas of extraction or mining are in Sarawak and Sabah,” he said, adding that the details on the offer to sell must be studied thoroughly.

Last Tuesday, Prime Minister Tun Dr Mahathir Mohamad told the Reuters news service that the federal government could sell Petronas shares privately to states such as Sarawak, Sabah, Terengganu and Kelantan where the company has most of its energy assets.

Sarawak accounts for two thirds’ of Malaysia’s total gas production and almost a third of its oil.

Sarawak and neighbouring Sabah, both located on the Borneo island and separated from peninsular Malaysia by the South China Sea, have the country’s most prolific oil and gas reserves.

Both states have long called for a quadrupling of royalties paid by Petronas to 20 per cent of its profit.

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