Sarawak Perikatan Nasional chairman Jaziri Alkaf Abdillah Suffian said Petroleum Sarawak Berhad (Petros) cannot expect to do away with support from the national oil company as it does not possess sufficient capacity and talent to be self-sustaining.

“If Sarawak’s oil and gas rights are given directly to Petros, who might not want to work with Petronas, it will still have to look for a partner to do the work.”

“Petros simply does not have the capacity and talent to do the work on its own. They still have to work with a third party. If that’s the case, why don’t they just continue working with Petronas?” he told FMT.

The Bersatu supreme council member also warned the Sarawak government against underappreciating Petronas’s role in nation building, pointing to the company’s standing in the global O&G sector and its contribution of RM1.5 trillion in dividends, state sales tax, cash payments, export duties and payments to the national trust fund.

“Petros should not be seen as overshadowing Petronas.

“Petronas still plays a big role in Sarawak. Petros should be working with Petronas by its side – that should be the model,” Jaziri said.

Sarawak premier Abang Johari Openg previously announced that Petros and Petronas will work together to advance both national and state interests, but insisted that Sarawak’s interests must take precedence.

Jaziri said the Sarawak government must balance its desire to reclaim its resources with playing its part in building a stronger nation.

“It’s the mentality of Sarawakians to say: ‘We’ve been left out. Now it’s our time to claim our money.’ But this is a simple narrative,” he said.

“Sarawak cannot stand alone, by itself. For one, it does not have the talent and skills. Our immigration policies are also much more stringent compared to those of the federal government.”

Insufficient compensation?

The dispute over the gas aggregator role stems from Sarawak’s recent grievances about the Petroleum Development Act 1974 (PDA), which vests Petronas with ownership of all hydrocarbon resources across the country.

Sarawak has lately disputed this, and has sought to claim ownership of all O&G resources in and around the state, relying on the Oil Mining Ordinance 1958 (OMO), which it claims overrides or, at the very least, must be read alongside the PDA.

The state also complains that it has not been sufficiently compensated by Petronas for the resources, with some quarters even blaming the national oil company for Sarawak’s underdevelopment.

Weighing in on the dispute, a top lawyer has questioned Sarawak’s narratives.

“Under the PDA’s production-sharing model, the country owns all the oil. The contractor comes in and is paid in kind for the work, but the contractor never owns the oil,” the lawyer, speaking under condition of anonymity, said.

“The OMO is a concession model,” he said. “The concessionaire owns all the oil. The company gets everything, but they pay a percentage (in the form of a royalty payment).

The lawyer said that prior to the PDA, all the oil was owned by Shell, and not Sarawak. When the PDA was brought into force, they had to negotiate Shell out, he added.

“(The PDA model) is more equitable. The returns to the country are huge, as opposed to the reverse.

“If the argument has been that Sarawak has been unfortunately denied the true value of the mineral resource, that’s a question of numbers,” he said, adding that such disputes could be resolved through negotiations.

“Under the PDA — both by agreement and legislative consent — all the oil was vested in Petronas. Sarawak signed the vesting instrument. That’s what the PDA says.”

He also said it was “too simplistic” to attribute Sarawak’s underdevelopment to the state being under-compensated by Petronas.

Sarawak also has issues relating to the lack of transparency, financial mismanagement and corruption, the lawyer said.

On Feb 28, Parti Bumi Kenyalang president Voon Lee Shan demanded that Abang Johari explain how O&G funds received by the Sarawak government have been spent.

“Has the GPS government received this RM49 billion? What then has the money been used for?” he said.

That sum, a cash payout by Petronas to Sarawak, represents half of the RM96.2 billion in compensation the state received as of 2024, according to Prime Minister Anwar Ibrahim.

According to Anwar, Sarawak also received RM18.66 billion in sales tax and RM28.6 billion in shareholder dividends from Malaysia LNG, a liquefied natural gas manufacturer which the state is part-owner of.

On top of that, Sarawak also receives income from the RM280 billion invested by Petronas into upstream O&G infrastructure in Sarawak, as well as federal government funding such as development funds under the various Malaysia Plans.