KUALA LUMPUR, Sept 7 — Malaysia’s national oil corporation, Petronas, is contemplating a court injunction to defend its monopoly on the country’s natural resources amidst escalating demands from Sarawak for increased control over oil and gas extraction and trading.
Sources close to the situation revealed that Petronas is weighing the possibility of filing for a court injunction in the coming days, according to a report published in Channel News Asia today.
This legal move aims to prevent any immediate action by the Sarawak government against Petronas. According to the sources, if Sarawak does not resume negotiations, the dispute could escalate into a full-blown court battle.
Sarawak has given Petronas an ultimatum to finalise an agreement by October 1, granting the state complete authority over the supervision of oil and gas trading.
A senior government official privy to talks on the matter between Petronas and Prime Minister Datuk Seri Anwar Ibrahim and his economic advisory committee, stated, “No middle ground has been reached (between Petronas and Sarawak) and the option at this point is to turn to the courts.”
The official, who requested anonymity, added that Anwar prefers to handle Sarawak’s demands at the corporate level with Petronas rather than involving the federal government.
Petronas has not yet commented on the possibility of seeking judicial relief.
Petronas president and group chief executive officer Tan Sri Tengku Muhammad Taufik Tengku Aziz expressed concerns on September 5 about potential impacts on fuel supply security and reliability.
He noted that international buyers, such as Japan and South Korea, are seeking assurances regarding consistent and cost-effective supply amid the proposal for Sarawak’s state-owned Petroleum Sarawak Bhd (Petros) to become the sole gas aggregator for the state.
“We have seen ourselves become one of the primary partners of countries like Japan and South Korea and they want assurance that supply, if developed through an integrated model, will be able to be supplied reliably, cost competitively, (which is) now more important than ever,” he told the media in Kuala Lumpur.
Sarawak’s senior legal counsel, Joseph Chioh Hock Hua, stated that he was unaware of Petronas’ legal considerations and declined to comment on the ongoing negotiations due to secrecy laws.
Anwar, who assumed office in November 2022, faces a complex challenge balancing economic and political interests, particularly given Sarawak’s critical role in the unity government. The state government, led by Premier Tan Sri Abang Johari Openg, has intensified its push for greater autonomy, invoking the charter from when Sarawak and Sabah joined Malaysia in 1963.
Sarawak holds significant economic importance, representing 60.87 per cent of Malaysia’s total petroleum reserves and nearly 90 per cent of the country’s LNG exports. The state’s demand for Petros to oversee oil and gas reserves directly challenges Petronas’ longstanding monopoly since its establishment in 1974.
Sarawak insists that its oil and gas resources should be regulated under the Oil Mining Ordinance 1958, which claims resources found within 200 nautical miles of its waters belong to the state.
