KUCHING: Sarawak will continue to assert its right to regulate the oil and gas industry in the state while pursuing royalties based on production, says Datuk Patinggi Abang Johari Tun Openg.
The Chief Minister said Petronas was now in discussions with the state-owned oil and gas company Petroleum Sarawak Bhd (Petros), pursuant to the passing of the Oil Mining Ordinance (Amendment) Bill in the Sarawak Legislative Assembly earlier this month.
The updated ordinance requires oil and gas industry players, including Petronas, to obtain licences and permits from the state government for their upstream activities.
They have been given a grace period until the end of next year to comply.
Abang Johari said he did not want to be dragged into the argument about whether the 20% royalty promised by Pakatan Harapan in its manifesto was based on production or profits in view of the ongoing discussion between Petronas and Petros.
“I do not want to jeopardise the discussion. Let them work together.
“Whatever decision they make, they will refer to the Federal Government as well as the state government.
“We leave it to the professionals. Politics must not be too dominant in this discussion,” he said during a high tea with the media here on Tuesday (July 31).
On Sarawak Pakatan's announcement on Monday (July 30) that the state will be given 20% oil profits on top of the existing 5% royalty, Abang Johari said this came only from the state Pakatan parties and not the Federal Government.
“If it’s from the Federal Government, there will be communication with the state government. But as it is, there is no communication whatsoever," he said.
He also reiterated that royalty must derive from production, not profit, and that the state would not give in on this matter.
“How can you say royalty is based on profits? Royalty means ownership.
“The oil and gas are found on our land, therefore how can we give in? That is our right.
“If (Pakatan) promised 20% in their manifesto and now they want to change their promise, that has nothing to do with us. That is up to them.
“But we must stick to the rights that we have over oil and gas, particularly our regulatory control,” he said.