KUCHING, Nov 13 — A committee has been formed to facilitate negotiations between the state government, the federal government and Petroliam Nasional Berhad (Petronas) to ensure greater participation of the state in the oil and gas sector, Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan said in the state assembly today.

He said negotiations on commercial solutions for the matter are still ongoing among the three parties.

“The state government is fully committed to taking control of the exploration and mining of oil and gas within the territorial boundaries of the state,” he said in his winding-up speech for the debate on the State Budget 2021. 

Awang Tengah said the objectives are to have a greater and more equitable share of revenue from the oil and gas found and produced in Sarawak; and to regain complete control of onshore mining as manifested by the issuance of two Oil Mining Leases to state-owned Petroleum Sarawak Berhad (Petros) under the state’s Oil Mining Ordinance 1958. 


He said the state also wants equity participation in existing offshore mining blocks and an established framework for the award of new offshore mining blocks and to secure a greater volume of natural gas produced in onshore and offshore areas. 

Apart from the imposition of the state sales tax (SST), Awang Tengah said the state is expected to receive revenue from investments in downstream industries, like LNG Plants, and through equity participation in offshore blocks in the future. 

He said given the state’s political stability as well as sound oil and gas policy, Shell Malaysia has decided to relocate its upstream operations to Miri involving around 2,000 of its employees.


“This is a clear manifestation of Shell’s confidence in the state’s conducive business environment for investment,” he said.

Awang Tengah stressed political stability is paramount in order to be able to govern well and attract foreign investment, creating more business and employment opportunities.

“More so during this Covid-19 pandemic where the government of the day puts all of its time, effort and resources into focusing on the well-being of the rakyat and building the economy, instead of politicking,” he asserted.