Bill fortifies control over O&G resources
The Sarawak Legislative Assembly updates several provisions in the Oil Mining Ordinance (OMO) 1958 by passing the Oil Mining (Amendment) Bill 2018
With the strengthening of our regulatory control framework, Sarawak would be in a far better position to ensure greater participation in the oil and gas industry. Datuk Amar Awang Tengah Ali Hasan, Deputy Chief Minister
KUCHING: The Sarawak Legislative Assembly ( DUN) yesterday passed the Oil Mining (Amendment) Bill 2018, to update several provisions in the Oil Mining Ordinance ( OMO) 1958, and to bring the Ordinance in line with the current practices and operations in the upstream sector of the oil and gas industry.
Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan said, with the amendments, Sarawak would be able to strengthen its regulatory control over exploration and prospecting for petroleum, which by definition includes natural gas.
“With the strengthening of our regulatory control framework, Sarawak would be in a far better position to ensure greater participation in the oil and gas industry,” Awang Tengah, who is also the Minister of Industrial and Entrepreneur Development told the august House in his winding up speech before the Bill was passed.
He added that it would also facilitate a higher return of investment and ownership of equity in the industry.
The Bill was debated by 13 assemblymen from both sides of the political divide.
Awang Tengah hoped that the consensus among the elected representat ives on the passing of Bil l wil l help Sarawak in regulating the oil and gas industry in Sarawak successfully.
On the inadequacy of penalties provided in the Amendment Bill as raised by several assemblymen, Awang Tengah said Sarawak does not anticipate a lot of noncompliance to provisions in OMO 1958.
“However, we can assure this august House that if a real need were to arise, the necessary amendments would be made to increase penalties,” he said.
Awang Tengah, who is also Second Minister of Urban Development and Natural Resources also told the House that Sarawak holds 25 per cent equity in the MNLG3, and hoped that the Pakatan Harapan ( PH) government would honour their election manifesto of granting at least 20 per cent oil royalty to Sarawak.
He also anticipated that Sarawak MPs from PH being in the federal government would take the necessary action to have the Petroleum Development Act (PDA) 1974 be amended or repealed in the coming Parliamentary sitting.
“Be rest assured that any such initiative would receive the ful l backing of Sarawak g ove r nment . . we a s true Sarawakians should work together to achieve this objective and aspiration of the people of Sarawak,” he said.
THE purpose of regulating the upstream activities of Petronas and its contractors is to ensure that their upstream activities comply with our state laws, the august house was told.
Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan said the Oil Mining (Amendment) Bill, 2018 which was passed yesterday is to ensure that the exploitation of the state’s valuable resources is carried out in a manner that serves the best interests of the state and its people.
In moving the second reading of the Bill, he said the state ought to be able to derive optimal economic and fair and equitable monetary returns from its hydro- carbon resources.
He said Petronas, as a national oil company, when operating in Sarawak must abide by the state laws, particularly the Land Code.
“The people of Sarawak want Petronas to respect our state laws and their aspirations for better regulatory control over the exploitation of our oil and gas as well as for a more equitable and just share of the returns and benefits from the oil and gas obtained from Sarawak territory.
“TheSarawak government wants to ensure that the aspirations of the people are realised and would continue to fight for the state’s rights to the oil and gas obtained from our land both onshore and offshore,” he said.
Awang Tengah, who is also Second Minister of Urban development and Natural Resources, noted that the amendments to the Oil Mining Ordinance ( OMO) would create a more effective regulatory framework for the upstream sector and the downstream with the enforcement of the Distribution of Gas Ordinance, 2016.
He noted that these were strong manifestations of the state government‘s commitment to safeguard the state’s rights and interests over our oil and gas resources.
He said the state government was prepared to engage constructively with Petronas to establish a regulatory framework for the exploration, prospecting and mining for oil and gas in Sarawak.
He also assured that the regulatory framework envisaged would not undermine Petronas’ operations and investments in Sarawak.
“However, Petronas must demonstrate its willingness to respect and comply with our state laws.
“Also, Petronas should show its commitment to meet the aspirations of Sarawak for a more equitable and just returns from the exploitation of oil and gas and greater and more active participation by Sarawakians and Sarawak companies in the upstream and downstream sectors of the oil and gas industry in Sarawak,” he said.