Nothing in MA63 on O&G ownership, regulations, says Azalina

The law and institutional reform minister says management and regulation of the industry are determined by federal laws, specifically the Petroleum Development Act.

Law and institutional reform minister Azalina Othman Said said Putrajaya will abide by the apex court’s decision on the regulatory framework governing Petronas’s operations in Sarawak.

PETALING JAYA:

 The Malaysia Agreement 1963 (MA63) does not contain any provision concerning the ownership or regulation of oil and gas resources, says law and institutional reform minister Azalina Othman Said.

Azalina said MA63 also does not assign the roles of petroleum entities like Petronas or Sarawak’s sole gas aggregator, Petroleum Sarawak Bhd (Petros).

“The MA63 is the foundational document that sets the terms for the formation of Malaysia, including the rights and autonomy of Sabah and Sarawak in certain areas.

“The management and regulation of the oil and gas industry are determined by federal laws, specifically the Petroleum Development Act (Act 144),” she said in a written parliamentary reply.

Azalina said that under Act 144, Petronas is given whole ownership of petroleum in Malaysia, with exclusive rights and privileges to explore and acquire this resource, whether onshore or offshore.

However, she said the commercial settlement agreement inked by Petronas and the Sarawak government in December 2020 provides for Petros’s greater involvement in the oil and gas value chain.

She was responding to Ali Biju (PN-Saratok), who asked for an update on negotiations to avoid overlapping functions between Petronas and Petros.

Azalina said this matter was currently before the Federal Court and that Putrajaya would abide by the court’s decision.

Earlier this month, Petronas filed a motion in the Federal Court to seek clarity on the applicable regulatory framework governing its operations in Sarawak, to ensure its operations in the state comply with applicable laws and governance practices.

The national oil company said the suit was not meant to challenge Sarawak’s development aspirations or hinder Petros, but to obtain the Federal Court’s definitive determination on the legal position applicable to the petroleum sector in the state.

Despite a series of dialogues and negotiations with Petros since 2024, Petronas said there were still differences that have led to uncertainty over its obligations in Sarawak. - FMT