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KUCHING: Sarawak is not giving up its oil and gas rights in the settlement with Petronas over the payment of the 5% state sales tax on petroleum products, says Datuk Patinggi Abang Johari Openg.
Refuting such allegations, the Chief Minister said no agreement was made between the state government and Petronas on the validity of the Petroleum Development Act (PDA) 1974 in the settlement.
Instead, he said there was an understanding that while the PDA was recognized in the rest of the nation, oil and gas in Sarawak came under the state’s Oil Mining Ordinance 1958.
“We are not surrendering our rights. Actually, we have the rights and that’s why we went to court – and the court has ruled that we have the rights,” he told reporters after handing over Hari Raya and Gawai goodies to frontliners here on Thursday (May 14).
Abang Johari was responding to criticism from Opposition leaders and NGOs that Sarawak was giving up its rights to oil and gas in the settlement.
He also said a new committee co-chaired by Works Minister Datuk Seri Fadillah Yusof and Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz would negotiate a “new arrangement” with the state government on oil and gas matters.
“The outcome of the negotiations has to go to the state assembly’s consultative committee,” he said.
It was announced last Friday (May 8) that Petronas would pay RM2bil in state sales tax to the state government after reaching a settlement on oil and gas matters in Sarawak.
In the joint statement, the state government and Petronas said they were dropping their legal action against each other following the settlement, while Sarawak would reduce the tax rate in phases.
The statement also said previous agreements made between the state government and Petronas under the PDA were still valid and in force, and that Petronas was recognized as having full regulatory authority over the oil and gas industry in line with the Federal Constitution.
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