Wan Zulkiflee should have resigned as Petronas CEO a long time ago, Sarawak politician says

KUCHING, June 21 — Sarawak People’s Aspiration Party (Aspirasi) today said the recent resignation of Tan Sri Wan Zulkiflee Wan Ariffin as chief executive officer of Petroliam Nasional Berhad (Petronas) should have happened a long time ago.

Its president Lina Soo said he was a reason for Petronas not willing to pay the 5 per cent state sales (SST) imposed on the import of petroleum products in Sarawak.

“He had said in public that Sarawak had no legal competence to demand the sales tax and had also opposed demands from Sarawak and neighbouring Sabah for bigger royalty payments,” Soo said when asked by Malay Mail to comment on the resignation of Wan Zulkiflee as Petronas chief executive officer recently.

It was reported that Wan Zulkiflee resigned after a disagreement with Prime Minister Tan Sri Muhyiddin Yassin over a plan to pay US$470 million (RM2 billion) in sales tax to Sarawak.

Petronas had been fighting Sarawak’s demand for the sales tax in court before the two parties announced a settlement last month — although Sarawak later said it would continue its legal action until an agreement is final.

Soo said it is ludicrous that Petronas had no qualms paying a royalty, dividends, corporate tax and extending cash bailouts to the federal government during its 44 years’ of existence, but refused to pay higher oil royalty and SST to Sarawak.

“In 2018, Petronas had paid an additional RM26b and in 2019 another RM30b to bail out the federal government, but to quit over a disagreement to pay RM2b in SST when the bulk of Malaysia’s oil and LNG output is sourced from the state is laughable,” she said.

Soo noted that Wan Zulkiflee had also said that increasing royalties could make operating in Sabah and Sarawak unfeasible.  

“Then in that case Petronas should just quit its operations in Sarawak as it claims it is unfeasible.   

“After all, Sarawak was producing oil from 1910, decades before the existence of the federation of Malaysia, and Sarawak is capable of managing its own oil and gas.  

“Sarawak’s oil and gas was usurped by the Petroleum Development Act 1974 (PDA) which is unconstitutional and not applicable to Sarawak in violation of Sarawak rights,” she argued, adding that Sarawak’s continental shelf belongs to the state, along with all the oil and gas.  

“Ownership and all economic rights over Sarawak oil and gas belong to Sarawak as the landowner,” Soo said, adding that Petronas should rightfully be treated as just like any oil contractor — like Shell, Murphy and Exxon.  

“If Petronas deem it unfeasible to operate in Sarawak, it should just cease its operation here, as there is no lack of international oil companies willing in queue to explore, prospect and mine Sarawak oil and gas.  

“Sarawak is capable of managing its own petroleum resources as it had done since 1910,” she said, adding that today, the state has many oil and gas talents who are capable of steering its petroleum industry.