Hornbill Unleashed

March 28, 2018

See requests for urgent DUN sitting to deliberate Sarawak’s mining rights

Filed under: Politics — Hornbill Unleashed @ 8:02 AM

Batu Lintang assemblyman See Chee How has requested the Yang di-Pertua Negeri Tun Pehin Sri Abdul Taib Mahmud to summon for an urgent session of the Sarawak State Legislative Assembly (DUN) to be held immediately.

See said the special sitting is to deliberate on Sarawak’s sovereign power and rights to the issuance of permits and licences for mines, mining leases and certificates under Item 2 (c) of the State list under the Ninth Schedule of the Federal Constitution, particularly the prospecting, mining and development of our petroleum resources, to make clear the collective stance of the DUN with regards the Territorial Sea Act 2012, the Petroleum Development Act 1974, and the Tripartite Agreement signed between the Federal Government, the Sarawak State Government and Petronas.

“The Right Honourable Chief Minister Datuk Patinggi Abang Johari Tun Openg had evoked a lively debate with his unequivocal announcement that Sarawak will assume full regulatory authority over its oil and gas upstream and downstream industry by this July, at the launching of Petroleum Sarawak Berhad (Petros) on March 6.

“Elected representatives, aspirants vying for offices in the coming general election, academicians and political analysts have raised some legal but mostly political arguments in the tussle which by far have been entertaining and enlightening.

“A golden thread is seen through the web of the arguments and counter arguments that it is the duty of the state leaders to best protect the utmost interests of Sarawak’s prized resources in oil and gas, whether the exponents are from the ruling or opposition front, true to the spirits of ‘Sarawak First’ and ‘Sarawakians First’,” he said during a press conference here today.

See, who is state PKR vice chairman, said the special sitting of the DUN will provide a platform for the differing legal and political opinions, propositions and solutions to be deliberated, considered and adopted in order that Sarawak may speak and present itself with one unified voice.

“Not unsimilar to the Sarawak DUN motion on the request for 20 per cent petroleum royalty which was unanimously passed on May 7, 2014. It was preceded by much arguments outside the State Assembly, a motion by the BN voted for debate over an opposition motion on the same subject matter, but all members were magnanimous and united in one voice inside and outside the State Assembly thereafter.

“Not until a Deputy CM now declared the 20 per cent royalty as irrelevant ‘as Sarawak now has full control over the production of oil and gas in the state’, a woefully whimsy statement.”

Nevertheless, See said the chief minister is doing right to take a step further to pursue and assert the State’s autonomous rights over the valuable resources of oil and gas lying within the territorial boundary of Sarawak.

However, this meaningful and necessary pursuit is by no mean easy. The knights must be prepared to overcome the constraints and obstacles lying ahead of their virtuous quest, he added.

See noted the chief minister’s statement that the state will be able to exploit its natural resources of oil and gas, that any person and company involved in the oil and gas industry in the state must have the necessary licences, permits, leases and approvals required under either the state’s Oil Mining Ordinance or the Gas Distribution Ordinance.

At the ceremony, Abang Johari handed over the licence to grant Petros the rights to mine oil and natural gas in the state, and he announced that the state will delegate the oil and gas regulatory and supervisory authority to Petros for it to play its role effectively.

The chief minister also stressed the need for those involved in the oil and gas industry in Sarawak must obtain the necessary licences, permits, leases and approvals required under either the state’s Oil Mining Ordinance or the Gas Distribution Ordinance.

However, Abang Johari assured that the enforcement of state laws will not jeopardise the interests or investments of Petronas and other companies already involved in the oil and gas industry in Sarawak.

“But, their business and operational activities must be aligned with our laws and regulations,” the chief minister said.

Knowing what the biggest constraints and obstacles ahead are, the chief minister laid emphasis that the Petroleum Development Act 1974 (PDA) and the Territorial Sea Act 2012 (TSA) are not relevant in Sarawak.

According to him, both the PDA and TSA are federal laws which were not endorsed by the Sarawak state legislative assembly and therefore they could not be implemented in Sarawak or supersede the state laws.

“Now, quote me properly; any law that is ultra vires the constitution under article 4 of the Federal Constitution is void,” Abang Johari told a press conference on March 8.

To make clear his assertions, the chief minister said in Miri on March 20, that Sarawak will begin exploiting its oil and gas resources through Petros later this year.

Despite Abang Johari’s statement, See was surprised that not a word in response from Prime Minister Datuk Seri Najib Tun Razak or any member of the federal government to Sarawak’s quest which is moving the earth under Sarawakians’ feet.

“They are calm and relaxed, as if giving it an nonchalant shrug, dismissing the expedition of the charging knights as a futile exercise?

“I am uneasy, and expecting the worse to come after the coming general election, as I think the stance of the federal government can be deciphered from the response of Petronas,” See said.

See added that despite what the chief minister and all other Sarawakians have said, Petronas was cool, referring us to look at “the framework of the Petroleum Development Act, 1974” in a short statement that read “Petronas welcomed the setting up of Petros, saying that it is committed to supporting the state’s aspirations to actively participate in the state’s oil and gas industry “in line with the current framework of the Petroleum Development Act, 1974”.

“Until today, the prime minister has not voice his support or give assurance to Sarawak for our so-called ‘full regulatory authority’ that those involved in the oil and gas industry in Sarawak must obtain the necessary licences, permits, leases and approvals required under either the state’s Oil Mining Ordinance or the Gas Distribution Ordinance.

“The Petroleum Development Act 1974 was legislated to make provisions for the establishment of Petronas and vested in it the entire ownership in and the exclusive rights, powers, liberties and privileges to the exploration and exploitation of the country’s petroleum resources whether onshore or offshore, and to control the carrying on of downstream activities and development relating to petroleum and its products.

“Our Oil Mining Ordinance 1958, on the other hand, was legislated to make provisions for oil mining in Sarawak and on its Continental Shelf.

“Our predicament being, pursuant to and in accordance with section 2(2) of the PDA, Sarawak had signed a tripartite agreement with the federal government and Petronas purportedly ‘to irrevocably grant in perpetuity and convey to and vest in Petronas’ our ownership in and the exclusive rights, powers, liberties and privileges of exploring, exploiting and obtaining petroleum whether lying onshore or offshore of Sarawak,” See said.

According to See, the conflict between the provisions in Sarawak Oil Mining Ordinance 1958 (OMO) and the Petroleum Development Act 1974 (PDA) with regards application and approval of licences for prospecting, exploration, exploitation and development of petroleum resources in Sarawak can be shown in the table below:-

 

Under Sarawak’s OMO Under PDA and Petroleum Regulations 1974
Section 4: Applications to the Chief Secretary for an (a) Oil Exploration Licence, (b) Oil Prospecting Licence, and (c) Oil Mining Lease, in respect of Crown land and/or alienated land;

 

Section 34: Applications to the Governor in Council for an (a) Oil Exploration Licence, (b) and (c) Oil Prospecting Licence, and (d) and (e) Oil Mining Lease, in respect of the Continental Shelf.

Under PDA section 6, the Prime Minister’s permission is required for downstream operations, “notwithstanding the provisions of any other written law”;

Under the Petroleum Regulations made under section 7 of the PDA 1974:

reg. 3   Applications made to Petronas:

a. licence for business or services relating to exploration, exploitation, winning and obtaining of petroleum, particularly supply and use of rigs, derricks, ocean tankers and barges;

b. licence for business or services involving the supply of equipment and facilities relating to exploration, exploitation, winning and obtaining of petroleum, including:

i. survey and exploration services;

ii. engineering, technical and consultancy services in exploration, drilling and production of crude oil and natural gas;

iii. engineering, construction and maintenance works connected with upstream activities;

iv. rigs and drilling services;

v. supply of exploration, drilling and production materials, equipment, platforms, derricks, tools and installations, pipe and pipe-laying services, barges and tankers;

vi. supply of general services connected with upstream operations.

 

reg. 3A(1)

Application made to Ministry of International Trade and Industry:

Permission for business of processing or refining of petroleum or manufacture of petrochemical products

 

reg. 3A(2)

Application made to Ministry of Internl Trade and Consumer Affairs:

Permission for business of Permission for business of marketing or distributing of petroleum or petrochemical products

 

All the above subject to the approval of the Prime Minster.

With the above listed conflict between the provisions in Sarawak Oil Mining Ordinance 1958 (OMO) and the Petroleum Development Act 1974 (PDA) with regards application and approval of licences for prospecting, exploration, exploitation and development of petroleum resources in Sarawak, See asked: “Is this why Petronas ignored and continues to ignore Sarawak when it comes to the its dealing of the oil and gas fields in Sarawak?”

See said by referring to “the framework of the Petroleum Development Act, 1974”, Petronas is telling Sarawak that it has full authority on the issuance and granting of licences, permits and certificates for any business or person(s) who wishes to undertake upstream petroleum operations, be it prospecting, exploiting, developing or production.

“In addition, for the downstream operations, they have been clothed with the full unequivocal authority from PDA and the Prime Minister. By alluding to PDA, Petronas is making it clear that it will not give up its authorities, and submit to Petros for licences, permits and certificates for their operations in Sarawak.”

See said perhaps Abang Johari should also be reminded of those published transactions of Petronas concerning the oil and gas fields in Sarawak, for the period after he has assumed the Chief Ministerialship.

Firstly, See said almost immediately after the chief minister had begun his reign in the Sarawak’s highest office, news had broken that Petronas was undertaking its biggest upstream stake sale, disposing up to 49 per cent equity in its asset, the Block SK316 gas field situated off-shore of Sarawak, estimated to worth up to US$1 billion.

“At the DUN sitting in May 2017, the CM had revealed that Petronas had consulted Sarawak but he said that Sarawak had neither the financial nor technological capability to be the strategic partner of Petronas to explore and develop the SK316 Block. Petronas is supposedly to announce the strategic partner recently but had decided to put off the announcement until after the general election.”

See said with the chief minister’s announcement that the PDA 1974 is to have no application on Sarawak after November 2011, Sarawak should be the rightful owner of Block 316 and the equity holding in this gas field should be ours.

“The Sarawak government should be the one who is evaluating and negotiating with the engineering and production partner or partners for the exploitation and development of this particularly gas field said to have estimated recoverable resource of more than three trillion cubic feet of gas.

“Were the members of the Sarawak State Assembly being misled when we were told that Sarawak lacks the financial or technological capability to be the strategic partner of Petronas and therefore we do not own any stake in it?”

See further queried “whether the chief minister will seek to amend his statement made in DUN and make a firm statement that we are the rightful owner of Block 316 gas field? Or are we to wait until after the general election that Petronas will finally announce that they have maintained full equity holding of the gas field and that 49 per cent have been divested to its partner and partners, and Petronas is to pocket the RM4 billion proceeds from the equity sale?”

Later, In July 2017, See recalled Petronas had disposed of a 10 per cent stake in Petronas LNG9 Sdn Bhd, which owns the MLNG Train 9 Project to Thailand’s national oil company and partner PTTGL Investment Ltd (PTTGLI) for US$500 million (RM2.14 billion then).

Further, in October 2017, See said Petronas approved and signed the Field Development Plan (FDP) awarding the oil and gas rights for the Beryl gas field off the coast of Miri to Japan’s JX Nippon Oil & Gas Exploration in complete disregard to Sarawak’s sovereignty and rights.

In December 2017, See said JX Nippon Oil & Gas Exploration announced that Beryl, an already discovered but undeveloped gas field, is scheduled to produce its first gas in November 2018, with peak production seen at around 23,000 barrels per day of oil equivalent.

“In addition, will Sarawak be handed the Petronas’ 25 per cent stake in the development of the gas resources found in the Block SK320 gas field at the off-shore of Sarawak?

“Again, another lucrative gas field now substantially owned by foreign corporation, Mubadala Petroleum which a wholly owned subsidiary of Abu Dhabi’s Mubadala Development Co. has a 55 per cent stake in Block SK320.

“The final investment decision for the field is supposedly to be undertaken in the first quarter of this year, but the announcement may similarly be postponed until after the general election?”

See asked if the present Sarawak state government is adamant that the PDA 1974 is unconstitutional and of no effect to Sarawak, why are we still allowing the national petroleum company to continue to concession out oil and gas fields at the off-shore of Sarawak since 2012, disposing equity interests and awarding exploration, development and production agreements concerning these resources and particularly those affecting the valuable gas fields over the past 13 months as enumerated above?

“PKR Sarawak is all for the demand for the return of sovereign rights and authority over all the oil and gas fields onshore and offshore of Sarawak. However, we are most wary that State will compromise our ownership of the petroleum resources, any or all of legal and equitable entitlements in return for mere regulatory control and authority over the application and approval of licensing for prospecting, exploration, exploitation and development of petroleum resources in Sarawak.

“Because of its momentous political and financial implications on the future of Sarawak and of our future generations, it is only prudent and right for the State Government to lay out its proposition before the Sarawak State Legislative Assembly, sought its full deliberation and endorsement before any decision is made.”


Source : The Borneo Post Online


 

Advertisements

1 Comment »

  1. Doubt any Sarawak State Legislative Assemblyman really bothers about PDA ,TSA & TA bungling

    Comment by Salim — March 28, 2018 @ 9:37 AM | Reply


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: