'Petronas needs to do more for Sabah O&G sector'

Petroliam Nasional Bhd (Petronas) and a consortium led by Japan's JXTG Holdings Inc are among the companies interested in buying a stake in India's Bina oil refinery, a source close to the matter said.

KOTA KINABALU: The Institute for Development Studies (IDS) Sabah feels that more can be done by Petronas, especially in downstream industries to help boost Sabah’s economy and development.

IDS chief executive officer Datuk Dr Johan Arriffin said during a meeting with Petronas chief strategic liaison officer, Idris Ibrahim, that Petronas needed to create more entrepreneurs in the oil and gas (o&G) sector. 

He said Sabah was lagging far behind Sarawak in the vendor development programme and it was high time Petronas worked on the issue.

“The climate to invest in Sabah is highly conducive, as the Sabah Oil and Gas Industrial Park in Sipitang (SOGDC) offers many opportunities for Petronas to go further downstream,” he said in a statement on Wednesday (Jan 16). 

Johan said currently, the Sabah Ammonia Urea (Samur) project production was only for the export market and did not provide any feedstock to the state. 

“On the gas supply of the remaining 90 million scf of gas for the state, Petronas should reconfirm the availability and gas price,” he said.

Johan Ariffin said the gas price should also be discounted to make the project commercially viable, otherwise Sabah would be left further behind in downstream O&G development.

Both IDS and Petronas agreed that further in-depth discussions were necessary to create a platform to collaborate in developing Sabah’s role in maximising its natural resources to benefit both the state and nation. 

“The collaboration with Petronas in the field of research and exchange of data would be beneficial for the state government to make informed decisions with regards to planning purposes within the oil and gas industry,” Johan said.

He expressed disappointment that the second Ammonia and Urea project, Markisa, now renamed Saffron, had not gotten off the ground. 

“This is a big opportunity loss for the state. 

"There are many petrochemical derivatives spinoffs from the proposed plant including job creation, and it is a disappointment that the project has not materialised”, Johan said. 

On other developments, Idris said Petronas was focusing more on community wellbeing and environmental projects in Sabah, as part of their Corporate Social Responsibility (CSR) efforts to turn Sabah into a developed oil-producing state. 

“Developing sustainable CSR plans and programmes would heavily impact Sabah’s local communities to be more independent and productive,” he said.


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