Sarawak starts exerting control over oil and gas

File picture shows Sarawak Chief Minister Datuk Patinggi Abang Johari Openg launching Petroleum Sarawak Bhd (PETROS), March 6, 2018. — Picture by Sulok Tawie
File picture shows Sarawak Chief Minister Datuk Patinggi Abang Johari Openg launching Petroleum Sarawak Bhd (PETROS), March 6, 2018. — Picture by Sulok Tawie

KUCHING, July 1 — The Sarawak government today began exercising its powers over the oil and gas industry, but said it will give industry players until the end of 2019 for full compliance.

A statement issued by the Chief Minister’s Office said oil and gas industry players are required to comply with the Gas Distribution Ordinance 2016, Oil Mining Ordinance (OMO) 1958 and Sarawak Land Code (SLC) 1958.

The Gas Distribution Ordinance, which comes into force today, requires all activities related to gas distribution or within the distribution system for supply and delivery to be licensed by the state through the director of Gas Distribution.

These activities include the import of liquefied natural gas into Sarawak, regasification, treatment and the separation and processing.

They also include the transport, supply and retail of gas, construction, management and maintenances of pipelines, terminals, plants and facilities.

The distribution of all types of gas such as natural gas, liquefied natural gas (LNG), liquefied petroleum gas (LPG), specialty gases used in high tech industries and hospitals would also be covered under the Ordinance.

“Regulations made under this Ordinance on licensing have been approved by the state government and the process of its implementation will commence immediately,” said the Sarawak Chief Minister’s Office.

National oil giant Petronas lost last month its application to the Federal Court for leave to sue the Sarawak state government for regulatory control of oil-and-gas exploration and mining in the state.

The Sarawak Chief Minister’s Office said today state authorities will also begin the process of ensuring compliance with OMO and SLC, including gathering the necessary information from all industry players as well as more detailed and comprehensive engagement with them.

“The state government accepts that this process will take time and that is why the industry players would be permitted to conduct their business and operations as usual up to the end of 2019 while at the same time taking the necessary steps to ensure compliance with state laws,” said the Sarawak Chief Minister’s Office.

OMO empowers the state government to assume full regulatory authority over the upstream and downstream aspects of the oil and gas industry, effective today.

All persons and companies involved in the oil and gas industries in Sarawak, must henceforth, have the necessary licences, permits, leases and approvals from the state authorities.

At the launch of the state-owned Petroleum Sarawak Berhad (Petros) on March 6 this year, Chief Minister Datuk Patinggi Abang Johari Openg had said the state had the rights to have complete control over the grant of prospecting, exploration and mining rights within the boundaries of Sarawak.

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