Sarawak's Premier Abang Johari Openg has reiterated the state's authority over the management and distribution of its oil and gas resources. This statement comes amid prolonged negotiations with the Malaysian government and Petronas, the national oil corporation. Since July of last year, Sarawak's state-owned company Petros and Petronas have been in talks to resolve disputes related to resource control. The discussions have become increasingly critical as Sarawak holds approximately 60% of Malaysia's gas reserves and is responsible for nearly 90% of the country's LNG exports.
The central government of Malaysia, however, maintains that Petronas will continue to be the sole guardian of the nation's oil and gas reserves, including those in Sarawak. This position is supported by the Production Sharing Agreement 1974 (PDA), which grants Petronas exclusive rights over petroleum operations without requiring additional licenses or procedures beyond the PDA's stipulations.
Sarawak's push for greater autonomy over its hydrocarbon resources has faced significant challenges. In February 2024, Sarawak appointed Petros as the state's sole gas aggregator under its Distribution of Gas Ordinance 2016. Petronas has recognized Petros in this capacity, though this recognition notably excludes liquified natural gas (LNG). This exclusion represents a substantial setback for Sarawak in its quest for increased control over its natural resources.
“That’s why we formed Petroleum Sarawak Berhad (Petros) and Petros will work together with Petronas … And we have a say in the distribution of gas,” – Abang Johari
Premier Abang Johari has taken proactive steps by requesting Deputy Prime Minister Fadillah Yusof to address the situation at the federal level. The Premier's efforts reflect Sarawak's longstanding desire for greater influence over its hydrocarbon resources.
“Lately, Prime Minister of Malaysia (Anwar Ibrahim) has agreed that Petros is to be the aggregator of gas (in Sarawak),” – Abang Johari
The ongoing talks between Sarawak and Petronas are not occurring in isolation. The matter was brought up during a bilateral meeting chaired by Malaysian Prime Minister Anwar Ibrahim and his Singaporean counterpart Lawrence Wong. These discussions align with broader regional collaboration initiatives.
Meanwhile, significant developments are unfolding between Sarawak and Singapore. During the 10th Malaysia-Singapore Annual Leaders' Retreat in 2023, both nations agreed on establishing a Singapore Consulate-General office in Kuching, Sarawak. Additionally, the construction method for a 1,000-megawatt undersea electricity transmission project from Sarawak to Singapore is anticipated to be finalized within the first quarter of the year.
“We discussed ways for Singapore and Sarawak to work closely together on energy, the green and digital economy, sustainability and strengthening people-to-people ties,” – Vivian Balakrishnan
“I anticipate that these discussions will be concluded within the first quarter of this year, followed by the potential signing of an agreement between Malaysia and Singapore,” – Abang Johari
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