Sarawak to set up own oil company

SARAWAK’S state government plans to set up its own oil exploration company, despite the national oil company, PETRONAS, gaining a large part of its Malaysian revenue from gas fields in the state.

Petroleum Sarawak (Petros) will be wholly owned by the state government, and it is currently unclear how this will impact the PETRONAS' activities.

PETRONAS president and group chief executive officer Datuk Wan Zulkiflee Wan Ariffin told The Star that two companies’ partnership could take shape as service providers or through a production-sharing contract. However, discussions are ongoing.

Regarding the plans, he said: “We have a strong relationship with the Sarawak government, as such, we welcome its participation in the O&G industry.

“But we also have regulations in place, of which under the PDA (Petroleum Development Act), PETRONAS is the custodian and manager of the O&G resources in Malaysia.”

The Star reports that Sarawak currently receives royalties of some 5% from PETRONAS for O&G revenues, and that the state will continue to pursue an ongoing request for a 20% royalty.

The formation of Petros was officially announced last month by Sarawak chief minister Datuk Amar Abang Johari Tun Openg, and it is expected the company will be operational in the first quarter of 2018.

In a Borneo Post story featured on the Sarawak government website, Abang Johari said that Petros would enable Sarawakians to participate more in both upstream and downstream oil and gas, and that both water and land exploration are being considered.

He added that he would work with Prime Minister Datuk Seri Najib Tun Razak and PETRONAS to get the maximum benefit from the state’s oil resources.

“Of course, we will try to get what is rightfully ours. And I will explore other ways for us to get maximum benefits from our oil and gas. In 3-5 years, there will be a lot of activities in oil and gas. This I can tell you but it’s still premature for me to reveal to you now,” he said.