Anwar’s petroleum strategy offers S’wak certainty, says analyst

 Samirul Ariff Othman says a negotiated, rules-based settlement offers Sarawak and Malaysia greater long-term certainty than one dependent on the political leverage of the day.

Samirul Ariff Othman (left) says Zaid Ibrahim’s comments highlight a strategic reality: governments can change and Sarawak cannot assume Putrajaya’s position will remain constant.

PETALING JAYA:

Prime Minister Anwar Ibrahim’s readiness to accommodate Sarawak’s legitimate petroleum aspirations gives the state ample grounds for backing his negotiated pathway, an analyst said.

Samirul Ariff Othman said Putrajaya’s willingness to expand Petroleum Sarawak Bhd’s (Petros) operational role provides Sarawak with greater certainty over domestic gas supplies, a crucial factor in driving its industrial growth.

Samirul, an adjunct professor at Universiti Teknologi Petronas, said the flexibility Anwar offers should pave the way for continued constructive engagement by all parties towards a fair and durable petroleum arrangement.

“The current administration has shown that it is prepared to find a workable middle ground between Sarawak’s aspirations and the need to preserve Petronas as a commercially strong, internationally competitive national oil company,” he told FMT.

“It is in everyone’s interest to support and build on that approach.”

This does not mean Sarawak should surrender its rights or scale back its development ambitions, said Samirul.

Rather it means recognising that a negotiated, rules-based settlement would offer Sarawak and Malaysia greater long-term certainty than an arrangement dependent on the political leverage of the day.

Samirul was commenting after former law minister Zaid Ibrahim claimed that a Barisan Nasional–Perikatan Nasional federal government could ensure Petronas remained strong and able to grow without hindrance.

In a recent Facebook post, the former law minister said Umno and PAS could form a stronger Malay-led federal government with greater room to implement national reforms.

“We can ensure Petronas remains strong and is not obstructed in its growth,” Zaid said.

Samirul said the remarks highlighted a strategic reality for Sarawak: governments could change, political alliances could evolve and the approach adopted by Putrajaya towards the state cannot be assumed to remain constant.

“Precisely because political configurations are fluid, Malaysia should avoid building strategic national institutions or petroleum arrangements around the leverage of any particular coalition,” he said.

“Durable, rules-based arrangements will always provide greater certainty than political bargains tied to a specific moment in time.”

Samirul said Anwar’s approach had shown that Sarawak’s ambitions could be advanced without weakening Petronas or destabilising the wider national petroleum framework.

He said constructive reciprocity would help preserve this opening and improve the prospects of concluding an arrangement capable of surviving changes in government.

“Backing this approach is not about partisan loyalty. It is about supporting a process that recognises Sarawak’s legitimate interests while protecting the national institutions on which Malaysia’s fiscal resilience and energy security depend,” he said.

Samirul said Petronas was not simply another GLC, but a globally recognised commercial enterprise and one of Malaysia’s most important strategic institutions.

Its decisions affect national revenue, energy security, investor confidence and Malaysia’s international reputation, he said.

“The direction of the national oil company should never depend on which coalition happens to form the federal government.

“It should be guided by commercial discipline, contractual obligations, sound corporate governance and long-term value creation.”

Samirul said the same principle should guide the evolving relationship between Petronas and Petros.

He said the issue should not be viewed through the lens of electoral arithmetic, political pressure or which party possessed greater bargaining power after an election.

“The issues at stake extend far beyond politics. They involve contractual certainty, resource governance, investment confidence and the future development of Malaysia’s petroleum industry,” he said.

Samirul acknowledged that Sarawak’s aspiration to play a larger role in developing resources within and around the state was legitimate and understandable.

He said greater local participation, stronger downstream industries and increased value creation for Sarawakians were consistent with broader national development objectives.

However, any new arrangement must remain commercially workable, preserve Petronas’s international commitments and support Malaysia’s long-term fiscal and energy security, he said.

Samirul said Anwar’s approach was reflected in the joint declaration between Putrajaya and Sarawak, which seeks to reconcile the state’s aspirations with the national petroleum framework.

The declaration provides that the relevant federal and Sarawak laws concerning gas distribution should coexist and be respected by all parties, including Petronas and Petros.

It affirms that Petronas will continue performing its functions, responsibilities and obligations under the Petroleum Development Act 1974.

The declaration also recognises Petros’s appointment as a gas aggregator under Sarawak’s Distribution of Gas Ordinance 2016, while protecting Petronas’s existing agreements with third parties involving LNG sales and exports.

Petronas and Petros are also to discuss further cooperation on Sarawak’s domestic gas requirements and projects involving green energy, hydrogen and power generation, subject to technical and commercial viability.

Samirul said the framework demonstrated that Sarawak’s aspirations under the Malaysia Agreement 1963 and the preservation of Petronas’s commercial strength were not necessarily contradictory.

“These objectives can be reconciled through clear rules, transparent governance and commercially credible agreements,” he said.

“It is therefore in the interests of Putrajaya, Sarawak, Petronas and Petros to build on the constructive approach taken under Anwar and conclude a fair, commercially viable and durable settlement.”

Such an agreement could give Sarawak greater certainty over its development while safeguarding the national petroleum framework, he said.

“The discussion should move beyond who holds political power today and focus on the institutional framework that will best serve Sarawak and Malaysia over the coming decades,” he said. - FMT