S’wak will fully enforce OMO58 on its O&G

KUCHING: There is nothing to stop Sarawak from enforcing its Oil Mining Ordinance 1958 (OMO58) on mining of oil and gas on its soil.

In stating this, Assistant Minister for Law, State-Federal Relations and Project Monitoring Sharifah Hasidah Sayeed Aman Ghazali said the Sarawak government will implement whatever rights based on the OMO58 for the benefit of the people of Sarawak.

"We will not compromise our legal position. We will enforce the law for the benefit of the people of Sarawak and we also want to make sure that our regulatory rights are protected," she said when asked to react to Petroliam Nasional Berhad (Petronas) press statement that it would not be giving up on the exclusive ownership of these resources in Sarawak.

On whether Sarawak will fine Petronas for not complying with the requirements of the law, Sharifah Hasidah said it would be premature to think about that now because Petronas did not specifically say they refuse to comply.

"We will still implement the OMO58 for the benefit of the people of Sarawak but if they (Petronas) bring this matter to court we are prepared for it," she said.

Petronas depended on the Petroleum Development Act 1974 for its exclusive ownership but the Sarawak government claimed its enactment through the Parliament had contravened the Malaysian constitution.

Petronas claimed it is the sole regulator of the upstream sector in the country and it would also seek the views and guidance of the federal government being the sole shareholder of Petronas in carrying out its duties.

The Sarawak government insisted that OMO58 stipulates that all oil and gas industry players in Sarawak including Petronas should comply with it.

“Legal and appropriate action will be taken against those who fail to comply with the Ordinance, and this should include the upstream activities carried out by Petronas,” the state government said.

The Sarawak government further said application for licences must be made in a form prescribed in OMO58 and submitted to the State Minerals and Management Authority (SMMA) through Petroleum Sarawak Bhd (Petros).

Chief Minister Datuk Patinggi Abang Johari Tun Openg had emphasised the necessity of enforcing OMO58 given that the rights enabling oil and gas industry players to operate in Sarawak belong to the state government.

Under the new regulation, Petronas must only deal with Petros to produce or extract oil and gas from beneath land within the state's boundaries, according to the Sarawak government.

The Sarawak government would regulate the downstream and upstream oil and gas industry in accordance with state laws. These state laws include the OMO, the Land Code of Sarawak and the Gas Distribution Ordinance (GDO) 2016.