KOTA KINABALU, Sept 23 — Initial discussions with Petronas indicate that a Commercial Settlement Agreement (CSA) may be reached soon, allowing Sabah to have a more significant role in its oil and gas development.

Sabah Chief Minister Datuk Seri Hajiji Noor said that the state government’s most recent meeting with Petronas took place on August 24, and that discussions were also held with Putrajaya via Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz, and the response has been “very positive”.

“The objectives of the CSA are a) to allow Sabah more power to decide on its oil and gas industry; b) for Sabah to get a bigger share of the oil and gas derived from the state; and c) for Sabah to get better opportunities for its nominated government linked companies in investing in the upstream and downstream activities,” he said.

“We will ensure that Sabah’s interests and rights are looked after for the people’s benefit,” said Hajiji in his winding-up speech at the state assembly sitting today.


The oil and gas rights of the state have long been a matter of contention in terms of its federal relations, particularly when they involve the royalty gained by the state, which has been at 5 per cent for decades.

Hajiji said that the state will continue to fight for its rights as enshrined in the Malaysian Agreement 1963, including those involving the rights of the continental shelf and border control under the North Borneo (Alteration of Boundaries) Order in Council 1954.

Meanwhile, as for its focus on rehabilitating the economy, Hajiji said that the state will embark on a “cleaning up exercise” of its agencies and subsidiaries, which may see some shut down if they are not performing as intended.


“Every agency will be structured, its finance restructured, if necessary, to ensure it continues to contribute to the state coffers as expected.

“Drastic action will be taken, including shutting down economic activities, investments, programmes and projects that are not performing or have become liabilities,” he said.

He said that post-mortems on the organisations’ operations, subsidiaries, joint ventures and idle assets, among other things, will commence immediately, with the aim of ensuring all the bodies are performing and generating results as expected.

This state assembly sitting, which is the first one this year, convened for three days and saw a question-and-answer session, brief debates and winding-up speeches.