Adopt less confrontational approach in O&G talks, Putrajaya, Sarawak told

 

Petros’s appointment as sole gas aggregator in the state represents a major victory for Sarawak, which has been vocal about enlarging its autonomy, says analyst James Chin. (Bernama pic)

PETALING JAYA: 

Analysts are calling for a less confrontational approach to the Petronas-Petros dispute, saying it would improve relations between Putrajaya and Sarawak and serve the state’s longer-term interests.

University of Tasmania’s James Chin told FMT a successful deal would see Sarawak’s ruling Gabungan Parti Sarawak coalition view Prime Minister Anwar Ibrahim’s Madani government “more favourably”.

He said that Sarawak was not able to push for oil and gas rights during Dr Mahathir Mohamad’s tenure as prime minister as the state was not given the opportunity to address the issue.

James Chin.

“It will be better for Anwar if he can deliver on this,” he said.

Chin, however, acknowledged that negotiations were likely to be complicated.

“Oil and gas are very technical matters, and we are dealing with very technical calculations.

“When the federal and Sarawak governments concluded their discussions earlier this year, they made a deal at a very high level without getting into the details,” he said.

Other analysts, however, cautioned against the federal government making too many concessions to the Bornean states, for fear of backlash if the matter is handled poorly.

They said a more conciliatory approach to negotiations would result in more stable resource-sharing models.

Asrul Hadi Abdullah Sani, partner at ADA Southeast Asia, said the dynamics at play among the various political parties in the Dewan Rakyat have given Sarawak leverage in the negotiations.

Asrul Hadi Abdullah Sani.

“As long as Sarawak has a significant number of seats in Parliament, the federal government will consistently seek compromises to ensure political stability.

“Now is an opportune moment for Sarawak to advocate for its other demands,” he told FMT, referring to Sarawak’s bid for greater control over environmental and other policy areas outlined under the 1963 Malaysia Agreement.

Asrul, however, warned that Sarawak should adopt a balanced approach in its relationship with the federal government.

“A continued perception of confrontation by Sarawak could lead to future policy reversals and political pushback,” he added.

Wong Chin Huat.

Sunway University’s Wong Chin Huat previously told The Edge that while it was important to empower East Malaysian states, concessions “can easily be framed as selling out of Malay-Muslim interests”.

Earlier this month, FMT reported a deadlock in Petronas-Petros negotiations after Sarawak’s state-owned oil company insisted on becoming the “middleman” in Petronas’s existing contracts, contradicting what Anwar announced in Parliament on Feb 17.

Sarawak’s ‘exclusive’ deal

The Petros appointment is considered a major victory for Sarawak, which has so far been vocal about regaining its autonomy in various policy areas, including oil and gas.

“The Petros appointment and successful negotiations would be a big win for Abang Jo, because he has promised Sarawak its MA63 rights.

“He’s been saying that oil and gas is part of that, so if he can get the federal government to recognise Sarawak’s indirect ownership of the gas, that would be a big deal,” said Chin.

He said regaining ownership rights would bring in “billions of ringgit more” for the state.

Chin said one of the plus points arising from the Petronas-Petros settlement was that Sarawak has succeeded in an area in which other states are likely to fail. “Terengganu and Kelantan, will not get (the same deal).”

“The problem with (Sarawak’s) current deal is that the LNG (liquefied natural gas), which is very profitable, is still under Petronas. The current deal only provides for domestic gas distribution.

“If Sarawak is successful, then this type of deal may apply to Sabah, but Sabah does not have that much gas,” he said. - FMT