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KOTA KINABALU: Shell should expand its presence in Sabah instead of reducing its operations due to its high investments in state waters, said former Minister of Industry and International Trade Darell Leiking.
Expressing shock over Shell’s move, the Penampang deputy described it as “a great loss for the state’s oil and gas industry” if the company were to finally ship from Sabah.
He said the multinational company had recently invested in the second phase of the Malikai deepwater development, which is operated by Shell, involving two additional oil producing wells and four water injection wells, and production is expected to start in the second quarter of next year.
“Such an investment would have required the expansion of the company’s existing offices in Sabah. But what happened was the other way around: the closure of offices, “he said today in a statement.
Leiking, who is also a Moyog assemblyman, was reacting to FMT’s report that Shell was cutting back its operations in Sabah and relocating staff to Miri.
Shell Malaysia had said that it would reduce the footprint of its Kota Kinabalu office, but that the company would remain committed to its upstream and downstream operations as they contribute to the development of communities in Sabah.
In the move to Miri, Leiking said the historic status of the city of Sarawakian as Shell’s first oil production district, both in the country and in Sarawak, does not validate the company’s decision to move staff there.
“A few days ago, a news newspaper (in Sarawak) reported that Shell plans to establish a new office in Miri that will generate around 1,000 jobs and generate massive economic growth in that district.
“While Miri may have enjoyed historic status as the first district in Malaysia where Shell set up its office in 1910, it is now 2020 and Shell currently enjoys oil coming from Gumusut-Kakap and Malikai, both in Sabah,” he said. .
As such, Leiking said there is no reason to set up a new office in Miri just because of historical sentiments.
“We must protect the state’s oil and gas industry by engaging with that oil company and telling them that while we welcome them to do business here, what has been taken out of Sabah must be processed in our state,” he said.
Leiking said that although the state is currently the country’s second-largest oil producer, after Sarawak, Sabah still has unexplored reserves.
Every foreign investor should have taken this into account if they wanted to commit to the development of the industry in the state.
“As a matter of principle, foreign investors should have understood that while Sarawak and Sabah formed the Federation of Malaysia, any activity to use our state’s natural resources for profit should be compensated by developing Sabah by creating jobs. and economic effects. “
To this end, he urged the Sabah cabinet to ensure that the state’s land rights are safeguarded.
Yesterday, Sabah Chief Deputy Ministers Bung Moktar Radin and Joachim Gunsalam expressed their dissatisfaction with Shell’s move, stating that the company’s exit plan had not been communicated to the state government.
