Petronas court bid is institutional due diligence, not hostility to Sarawak, says ex-Treasury official

KUALA LUMPUR, Jan 15 — Former senior Treasury official Nik Azmi Nik Daud has defended Petronas’s decision to seek judicial clarification on Sarawak’s oil and gas laws, saying the move reflects responsible governance rather than an attempt to challenge the state’s authority.

He issued the remarks in response to Parti Pesaka Bumiputera Bersatu (PBB) Youth, which accused the national oil company of undermining Sarawak’s regulatory framework by referring the matter to the Federal Court instead of continuing negotiations.

“I’ve read PBB Youth’s recent comments on Petronas’ decision to seek judicial clarification over Sarawak’s oil and gas laws, and frankly, it’s disappointing to see such inflammatory accusations from a political youth wing that should know better,” he said.

“Let’s be clear: this is not Petronas undermining Sarawak law or going rogue,” he said, adding that the company was “asking the courts for legal clarity when there are overlapping laws and competing interpretations.”

PBB Youth had argued that the court reference risked weakening Sarawak’s regulatory framework and questioned whether Petronas had obtained federal approval before filing the application, while also calling for further federal–state discussions to resolve the issue.

Nik Azmi said portraying the legal move as hostile was inaccurate and harmful to national cohesion.

“Stop trying to undermine national unity. Trying to portray it as a hostile act is not only misleading — it tears us apart when Malaysia doesn’t need more disunity,” he said. 

He stressed that seeking judicial interpretation should not be mistaken for defiance of state law.

“Going to court to seek interpretation is not an attack on Sarawak’s laws. It’s precisely how overlapping state and federal frameworks are meant to be reconciled. That’s the rule of law in practice,” he said.

“When laws intersect — especially in oil and gas — the responsible thing is to ask the courts how they apply together.”

He warned that rejecting the courts because of political discomfort posed a greater threat to institutional integrity.

“The real danger to the rule of law is when political actors insist on unilateral interpretations and reject the courts simply because they might not like the outcome,” he said.

Nik Azmi also rejected more talks, noting that federal and state leaders had already agreed on broad principles governing oil and gas cooperation.

“The prime minister and Sarawak premier Abang Johari Openg met and signed a joint declaration in May 2025,” he said, adding that the document set out a framework in which “Sarawak leads domestic gas supply, Petronas retains LNG exports, cooperation, not confrontation.”

He said the declaration left operational matters to Petronas and Sarawak-owned Petros, making the court reference consistent with what both leaders endorsed.

“So how is it ‘rogue’ for Petronas to do what both leaders publicly endorsed?” he asked.

He pointed out that Abang Johari had himself described the court application as routine.

“Perhaps PBB Youth should learn from their leaders in respecting the process,” he said.

Nik Azmi also rejected claims that Petronas had exceeded its authority, saying the company was acting under its statutory mandate.

“Petronas is not some cowboy operator,” he said. “Petronas is a government-owned entity operating under federal law, specifically the PDA.”

He said the company had a responsibility to seek clarity when legal frameworks intersect.

“Whether or not formal federal approval was sought is beside the point,” he said. “Petronas is acting within its legal authority by asking the courts how its mandate interacts with Sarawak’s laws.”

He said branding the move as “rogue” reflected either a misunderstanding of government-linked entities or an attempt to score political points.

He also cautioned against misrepresenting historical context.

“Before Petronas existed, oil and gas rights didn’t belong to Sarawak either — they were in the hands of large foreign colonial corporations,” he said.

He urged political actors to avoid framing disagreements as betrayals.

“We cannot have every disagreement framed as a betrayal,” he said. “Let the courts do their job.”

PBB Youth chief Datuk Martin Ben had earlier said the wing supported Abang Johari in defending Sarawak’s rights and warned that Petronas’s legal move could undermine state laws.