Amendment to OMO 1958 addresses ownership of O&G in Sarawak — Sharifah Hasidah
THE amendment to the Oil Mining Ordinance ( OMO) 1958 that was passed in the Sarawak State Legislative Assembly yesterday addressed the issue of oil and gas ownership in Sarawak.
This was explained in detail by Assistant Minister of Law, StateFederal Relations and Project Monitoring Sharifah Hasidah Sayeed Aman Ghazali in her Facebook posting on the same day.
“By exercising regulatory control over the upstream activities of exploring, prospecting and mining of oil and gas in Sarawak, we are actually addressing the issue of ownership of oil and gas on and off shore Sarawak,” she said.
Petroliam Nasional Bhd ( Petronas), she added, will also be regulated by OMO to conform to the Sarawak Land Code.
“With these amendments and the ensuing regulatory framework, the occupation and use of land in Sarawak by Petronas and its contractors for the exploration, prospecting and mining of petroleum could be regularised to conform to the provisions of sections 36( 2) and 209(1) of the Sarawak Land Code,” she stressed.
The amendment, she added, empowers State Minerals Management Authority ( SMMA) to grant exploration or prospecting licences and mining leases for exploration, prospecting and mining of petroleum (including natural gas).
“This amendment was presented to update several provisions in OMO and to bring the Ordinance in line with current practices and operations in the upstream sector of the oil and gas industry,” she explained further.
She said the move would encourage greater investment in the oil and gas industry.
“Based on feedback from the industry and other stakeholders, the investors would prefer having the option of investing in a mining activity whereby the rights to explore, prospect and mine oil can be granted in one single licence and lease,” she pointed out.
Sharifah Hasidah stressed that the amendment would enable Sarawak to strengthen its regulatory control over the exploration and prospecting for petroleum and mining on land in the state.
Under the existing provision of the Oil Mining Ordinance 1958, the granting of rights and privileges are made through the granting of separate oil exploration licence, oil prospecting licence and oil mining lease.
“Because of that, new Section 33C is incorporated – to provide the state with the power to issue a single licence and lease comprising oil exploration, oil prospecting and oil mining activities.
“A new section 8 stipulates that a licence or lease shall not be assigned or transferred without the prior written approval of Majlis Mesyuarat Kerajaan Negeri,” she explained.
When these regulations are enforced, Sharifah Hasidah added, Sarawak would have a much fairer and more equitable monetary returns from the exploitation of its hydro- carbon resources and much greater participation by Sarawakians and Sarawak companies in the oil and gas industry in the state.
To recap, Chief Minister Datuk Patinggi Abang Johari Tun Openg in April announced that companies involved in the oil and gas industries in Sarawak must obtain the necessary licences and leases required under the Oil Mining Ordinance 1958 and Gas Distribution Ordinance 2016 starting July 1.
In June, Petronas had sought declaration that the Petroleum Development Act ( PDA) 1974 applied to the regulatory control of upstream activities in Sarawak and that it repealed the OMO by implication.
The Federal Court, however, dismissed Petronas’ application for leave with RM50,000 cost to commence legal proceeding against the Sarawak state government, in its challenge against the latter’s claim to regulatory authority in the upstream oil and gas (O& G) sector within the state.
The judge said that the declarations sought by Petronas did not come within the jurisdiction of the Federal Court and should have been brought before the High Court instead.