State to assume full regulatory authority by July
KUCHING: Sarawak will assume full regulatory authority over the upstream and downstream operations and activities of the oil and gas (O&G) industry by July this year.
Chief Minister Datuk Patinggi Abang Johari Tun Openg said all companies or persons involved in the O&G industry must henceforth have the necessary licences, leases and approvals required either under the Sarawak Oil Mining Ordinance 1958 or Sarawak Gas Distribution Ordinance 2016.
“In other words, their operations and activities are required to comply with all state laws, including those related to the use and occupation of land,” he added when launching state-owned Petroleum Sarawak Bhd (Petros) here on Tuesday night.
However, Abang Johari said the enforcement of state laws would not jeopardise the interests or investments of national oil company Petroliam Nasional Bhd (Petronas) and other companies already involved in the state’s O&G industry.
Sarawak has got back control over the exploitation of O&G resources, one of the key issues and part of the ongoing broader talks on the devolution of power between the state and federal governments.
He said Prime Minister Datuk Seri Najib Tun Razak agreed to return to Sarawak power that had been inadventently eroded over the years.
“Sarawak has the constitutional rights to issue prospecting licences and mining leases under Item 2(c) of the State List in the Federal Constitution’s Ninth Schedule.
“The federal government’s rights to develop mineral resources under Item 8(j) of the Federal List in the Ninth Schedule is subject to Item 2(c) of the State List.”
According to Abang Johari, the Sarawak Oil Mining Ordinance 1958 was never repealed by emergency laws when the 1969 Proclamation of Emergency was in force and annulled in 2011.
He said the state cabinet had approved a bill to amend the Sarawak Oil Mining Ordinance 1958 to update the provisions and provide for better enforcement in the next session of the state legislative assembly in July.
The Gas Distribution Ordinance 2016 will come into force on July 1 this year.
Meanwhile, Abang Johari said Petros would spearhead Sarawak’s participation in the strategic O&G industry to boost state development. Petros will be granted the rights to mine O&G in the state.
He also announced the appointment of Saau Kakok, a Bidayuh, with 40 years experience in the O&G industry, as Petros’ chief executive officer.
“Petros is fortunate to gain from Kakok’s experience, talent and vision. I am confident that Kakok is the right person to lead Petros into the future,” Abang Johari said.
It was earlier reported that some 40 candidates were eyeing for the Petros CEO post.
Kakok, 64, joined New York City-based exploration and production company Hess Corp as vice-president of global new business development in 2011.
He has served as a director in Hess Malaysia and Thailand Ltd, Hess Oil & Gas Sdn Bhd and Hess (Indonesia-South Sesulu) Ltd.
Kakok was Shell EP International Ltd’s vice-president from 2007 to 2009.
Petros chairman Tan Sri Hamid Bugo said Kakok would take up his appointment next month.
Bugo said Petros planned to have all essential staff recruited and to commence operations by the end of the year.