Abang Jo’s assurance on Petros ‘does not match reality’, says Zaid

 Former law minister says Petros’s bid for Petronas’s gas role could weaken the national oil company.

Former law minister Zaid Ibrahim (left), responding to Sarawak premier Abang Johari Openg, said Petros taking over Petronas’s gas aggregator role means taking over a key part of the national oil company’s business.

PETALING JAYA:

Former law minister Zaid Ibrahim has disputed Sarawak premier Abang Johari Openg’s assurance that Petroleum Sarawak Bhd (Petros) will not displace or undermine Petronas.

Zaid said the assurance “does not match reality”, pointing to Petros’s bid to take over Petronas’s role as the gas aggregator in Sarawak.

“Petros wants Petronas’s gas aggregator role. That is not a minor adjustment or a supplementary role. It means taking over a key part of Petronas’s business,” he said on Facebook.

Yesterday, Abang Johari said Petros’s expanding role in Sarawak’s gas sector was not intended to displace Petronas.

He said Sarawak remained committed to working with Petronas while it built up its own ability to process the state’s resources, including plans for a liquefied natural gas regasification terminal in Kuching by 2029.

He said Petros had been in discussions with Norwegian energy infrastructure company Höegh Evi for more than a year, with the two companies announcing a joint development agreement to develop, own and operate the terminal.

“Many people say I want to kill Petronas, or that Petros will undermine Petronas. That is simply not true. We share opportunities with Petronas,” he was quoted as saying.

But Zaid said cooperation could not be judged by assurances alone, but by the effect of the changes being pursued.

He said Petronas stood to lose billions if it lost control of its gas aggregation role in Sarawak, where its gas business is estimated to be worth about RM10 billion a year.

“Petronas has already suffered from Sarawak’s various actions. In the Shell dispute, around RM80 million a month in payments was withheld amid confusion over who should be paid,” he said.

Zaid said the issue went beyond commercial arrangements, as Sarawak was also challenging whether the Petroleum Development Act 1974 and other federal petroleum laws applied in the state.

“That is challenging the very legal foundation on which Petronas was built,” he said.

He warned that allowing individual oil-producing states to assert similar control over petroleum resources and key parts of the supply chain would erode Petronas’s scale and its ability to serve the national interest.

“If every oil-producing state does the same thing, Petronas loses the scale that made it strong. Its national role can be undermined and eventually broken,” he said.

Zaid said the starting point for any settlement must be a clear recognition of Petronas’s rights over Malaysia’s oil and gas resources under the PDA.

“That must be non-negotiable. Once that is settled, then there can be negotiations on the role Petros should play, taking into account Sarawak’s needs and circumstances.

“But it cannot begin with Petros taking over Petronas’s functions while the legal rights of Petronas are still being challenged,” he said. - FMT