Masidi: Two oil and gas firms yet to settle unpaid SST with Sabah govt

Masidi (centre) and Malaysian Petroleum Resources Corporation (MPRC) president/CEO Mohd Yazid Ja’afar (right) visiting exhibition booths at the roadshow on Aug 18.

KOTA KINABALU: The two Hibiscus Petroleum Bhd-owned oil and gas companies with overdue state sales tax (SST) have yet to settle the outstanding amount with the Sabah government.

"If they had paid, I would be smiling from ear to ear," state Second Finance Minister Datuk Seri Masidi Manjun said when asked for a payment update concerning Repsol Oil and Gas Ltd (Repsol) and SEA Hibiscus Sdn Bhd (SEAH).

“You do not see me smiling like that,” he told reporters at a press conference during the Sabah Oil and Gas, Services and Equipment (OGSE) roadshow here on Thursday (Aug 18).

ALSO READ: Sabah ready to revoke work permits of two firms over unpaid sales tax

During the state assembly sitting in July, Masidi said the state government will cancel all work permits issued to the two companies if they fail to settle the overdue SST amounting to RM97mil.

At the time, he said notices were given to both firms on June 21, and the amount was supposed to be settled in full within 30 days.

He added that the state government reserves the right to take legal action against the companies.

Asked if the state government would proceed with revoking work passes to the companies, he said: "We will pursue, within our constitutional and legal power of the state, whatever (avenues are) available.This is being dealt with by the (government) side, with Petronas. We will update the media if and when the need arises,” said Masidi.

Masidi noted that the government had not encountered such problems with any other oil and gas companies.

“I have forgotten the exact number of companies (paying SST), but if everyone pays, we will collect about RM1.2 bil a year,” he said.

ALSO READ: Sabah has earned RM800mil in sales tax on petroleum products so far this year: Masidi

Regarding the event, Masidi said Sabah companies should explore opportunities from the National OGSE Industry Blueprint (OGSE Blueprint) 2021-2030 to move up the value chain.

Masidi, who is also state Local Government and Housing Minister, said it was ironic that Sabah is a major producer of oil and gas but still at the infancy stage in the sector.

“Sabah is not at the forefront, but far behind compared to states like Sarawak and Terengganu and even states that do not produce oil.

“There are 369 Sabah OGSE companies but half are not active.

“The reasons could be that they are not competitive enough to take up the big jobs, or have not been actively participating in this kind of technology or innovation,” he said.

ALSO READ: Sabah oil and gas roadshow to promote funding, talent development opportunities

Malaysian Petroleum Resources Corporation (MPRC) president and chief executive officer Mohd Yazid Ja’afar said 26 out of 31 initiatives have been rolled out since the launch of the OGSE Blueprint in April last year, with the remaining five expected to be implemented next year.

MPRC is the agency under the Economic Planning Unit (EPU) of the Prime Minister’s Department which is tasked with advancing the country’s OGSE sector.

“Among the initiatives rolled out so far are the OGSE Development Grant to promote technology adoption among companies, under which we have approved 36 companies so far.

“This includes one Sabah company with approved funding of RM250,000,” said Mohd Yazid.

Asked why only one company from Sabah received the grant, he said it was likely that there was a lack of awareness on the available incentives, as well as a lower "appetite to go global".

However, he said MPRC would encourage more Sabah companies to apply through the roadshow and other platforms.

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