Awang Tengah: Consultative framework to facilitate, monitor implementation of commercial settlement agreement terms

Awang Tengah speaking at the commercial agreement signing ceremony. – Bernama photo

KUCHING (Dec 7): The Sarawak government and Petroliam Nasional Berhad (Petronas) have agreed to the establishment of a consultative framework to facilitate and monitor the implementation of the terms of the commercial settlement agreement, said Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan.

This, he said, was also to ensure that the interests of the state of Sarawak would be given the utmost consideration by Petronas in its decision-making process especially pertaining to the management of the offshore petroleum operations.

The Second Minister of Urban Development and Natural Resources said while Petroleum Sarawak Berhad (Petros) would be given the authority to manage and carry out onshore petroleum operations, Petronas would provide access to Petros, data gathered from its past petroleum development efforts, so that the potentials of the petroleum resources could be realised.

“The signing of this commercial settlement agreement will herald the revival of onshore mining in Sarawak – the only place in Malaysia where upstream petroleum activities is taking place.

“The state government has already issued to Petros two oil mining leases covering areas in Miri and near Marudi, to kickstart petroleum operations, and oil prospecting licenses will soon be issued to Petros to facilitate exploration for more hydro carbons in areas described as the ‘petroleum fairway’ in northern Sarawak,” he said at the signing ceremony of the commercial settlement agreement between the Sarawak government and Peronas in Kuala Lumpur today.

Awang Tengah said the Sarawak Government would collaborate with Peronas to create and maintain a stable and investment friendly environment conducive for the sustainable development and growth of the oil and gas industry, both upstream and downstream, in Sarawak.

He said the Sarawak government appreciated the board and management of Petronas for having agreed to the terms of the commercial settlement agreement.

He believed the agreement manifested the common desire of both parties to cooperate constructively to bring the oil and gas industry in Sarawak to greater heights.

Awang Tengah noted that prior to the formation of Malaysia, Sarawak already had laws regulating oil mining on land and offshore in the continental shelf.

He said Sarawak had also been receiving revenues in the form of oil royalty and petroleum tax before Sept 16, 1963, adding that mining in the offshore areas started in the 1970s.

He pointed out that today, Sarawak accounted for over 60 per cent of the national natural gas production and over 25 per cent of the nation’s oil output, while one of the world’s biggest liquefied natural gas complex is located at Bintulu which manufactures 28 million tonnes of liquefied natural gas (LNG) per annum.

“On account of these factors, the aspirations of Sarawakians are for the state government to have a greater degree of involvement in the management of our oil and gas resources on both onshore and offshore areas, enjoy a more equitable share of the revenues from these resources.

“It is also the aspiration of Sarawakians to be accorded with greater investment opportunities for the state in both the upstream and downstream sectors, secure availability of natural gas produced in the state at fair prices to boost the state’s industrial development agenda, and for Petronas to continue and expand its current vendor development programmes as well as to provide more opportunities for Sarawak companies to participate in the oil and gas sectors such as in the award of contracts for supply and services works,” he said.

Awang Tengah believed all these were undeniably the legitimate expectations of the people of Sarawak.

“I am pleased to say that these expectations are now embedded in the terms of the commercial settlement agreement. Therefore, these expectations have been duly recognised by the federal government and Petronas,” he said.

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