Lawyer: Federal Court can say who has rights to O&G in Sarawak

Malik Imtiaz Sarwar says the apex court is the right forum as the state government has taken the stand that the PDA 1974 which applies nationwide must now exclude Sarawak.

PUTRAJAYA: The Federal Court was today told that it is competent to hear the legal dispute between Petroliam Nasional Bhd (Petronas) and the Sarawak government as laws on oil and gas fields are legislated by Parliament.

Lawyer Malik Imtiaz Sarwar said Sarawak could not rely on its Oil Mining Ordinance (OMO) 1958 to support its rights.

“The apex court is the right forum to decide as it is the federal legislature (Parliament) that legislates laws on oil and gas exploration,” said Malik, who is appearing for Petronas.

On June 4, the national oil company filed an application for leave to commence proceedings on its claim over ownership rights to Sarawak’s oil and gas resources.

The leave application under Article 4(4) of the Federal Constitution is heard before a single judge.

However, the state government has objected, saying the apex court is the wrong forum and that the dispute should begin in the High Court.

The Sarawak government has made it mandatory for all oil and gas industry players operating in the state to be licensed under its OMO and Gas Distribution Ordinance beginning July 1.

In March, the state launched Petroleum Sarawak Bhd (Petros) as its oil and gas regulatory and supervisory authority, reportedly with the blessing of the previous federal government.

Malik said it was clear that there was contest between Petronas and the Sarawak government on who should regulate the oil and gas industry in the state.

He said the state was now saying that the Petroleum Development Act (PDA) 1974 which applies nationwide must now exclude Sarawak.

“Sarawak is saying that OMO is still a valid and good law which we are hearing for the first time,” he added.

Sarawak state legal counsel JC Fong said the declaration sought by Petronas was not within the exclusive jurisdiction of the Federal Court under Article 128 (1)(a) of the constitution.

“They have not reached the threshold to get leave to have the dispute heard in the apex court,” he added.

He said Petronas was not challenging Parliament’s authority to make law under the constitution but was merely seeking a declaration that the PDA was duly enacted by the federal legislature.

“Petronas did not raise the competency of Parliament to pass the PDA and so this case should not be treated as a proceeding for a declaration,” he said.

Likewise, he said, Petronas was not disputing the validity of the OLO which was passed by the Sarawak legislature.

Chief Judge of Malaya Ahmad Maarof will deliver his ruling tomorrow on whether to allow Sarawak’s objection. -FMT