This week, Prime Minister Datuk Seri Anwar Ibrahim acknowledged Petroleum Sarawak Berhad (PETROS) as the sole gas aggregator in Sarawak.
The prime minister’s remark during a press conference in Abu Dhabi puts an end to months of speculation and stop-start negotiation between Sarawak, Putrajaya and PETRONAS.
He said there was no ambiguity in policy matters, noting that the Petroleum Development Act 1974 (PDA 1974) applies nationwide and is accepted by both the Sarawak state government and PETROS.
“However, we (the federal government) also recognise that PETROS was established to enable Sarawak to pursue its own gas exploration and distribution initiatives,” Anwar said.
Abang Johari in response, thanked the prime minister and said Sarawak and PETROS will work closely with Putrajaya and PETRONAS to ensure that the state oil and gas company carries out its role as the sole gas aggregator without interruption to the supply of gas for consumers, including investors.
PETROS was appointed sole gas aggregator by the Sarawak government on Feb 1 under the Distribution of Gas Ordinance to procure all natural gas produced in the state for distribution, supply and sale to downstream industry players.
It is also responsible for the planning, development, operation and maintenance of the natural gas distribution network in Sarawak.
The state government had previously decided that PETROS would assume control over the buying and selling of gas in Sarawak from July 1.
However, PETRONAS requested a delay, citing potential disruptions to gas distribution for LNG plants in Bintulu. The government agreed to a three-month extension, extending the deadline to Oct 1.
Frustrations began to appear in Sarawak when no resolution was reached within the “injury time” for PETRONAS to comply with all the requirements under the DGO.
This was not helped by several fearmongering campaigns operated by unscrupulous parties alleging that had the deal gone through, PETRONAS would see its revenues severely affected, even to the extent of implementing lay-offs of its workers.
This, however, was not the case as Sarawak did not seek to cripple the national oil and gas company, and instead stated that PETROS and PETRONAS must co-exist.
Economic returns
With the recognition of PETROS as the sole gas aggregator and its authority in overseeing gas distribution in Sarawak, the state is poised to receive a major economic boost.
The issue that persisted before is that Sarawak while being a main producer of natural gas, was not able to procure the gas resources needed for its downstream market.
PETROS as the gas aggregator is integral to advancing Sarawak’s objectives outlined in the Sarawak Gas Roadmap (SGR) by enhancing natural gas utilisation and security of its supply.
It will be pivotal in facilitating local and foreign participation in the gas sector and fostering economic development through value-added activities that generate employment opportunities.
Sarawak aims to increase its domestic gas utilisation from six per cent to 30 per cent by 2030 while continuing to secure long-term supply and drive industrial growth.
Through SGR, Sarawak is set to create gas hubs each in Kuching, Bintulu, Samalaju and Miri, towards ensuring gas access through the ‘hub-and-spoke’ delivery model.
This initiative will connect all parts of Sarawak, including the remote areas, unlocking new opportunities for industrial investments, which is earmarked to attract over RM100 billion in investment in the next ten years.
Regarding revenues, Sarawak looks set to receive a boost to its coffers. Last year, the state government, led by Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg generated over RM14 billion in revenue collection against an expected revenue of RM12.7 billion.
This was almost a three-fold increase in revenues compared to when Abang Johari took office in 2017 when the Sarawak revenue collection was around RM5 billion.
This year, the Sarawak government is expected to generate a revenue of RM14.2 billion. However, indications suggest the projection might be conservative, considering the government’s enhanced ability to collect revenue.
Abang Johari, last month said that the revenue collection could exceed RM15 billion with the possibility of reaching RM20 billion, a feat that would be unimaginable even a few years prior.
Lasting legacy
This week, the Premier celebrated his eighth year as the Sarawak head of administration and appears to show no signs of slowing down.
Throughout his tenure, he has made returning Sarawak rights under the Malaysia Agreement 1963 (MA63) and other instruments to its formation, a top priority.
This is at the same time, facilitating the return of Sarawak assets owned by the federal government such as the Bakun dam as well as Bintulu Port.
At the same time, economic transformation is emphasised through the digital economy strategy and the focus on renewable energy production and transition.
Under the Gabungan Parti Sarawak (GPS) platform, Sarawak has been proactive in utilizing its significant political influence as a key player in forming the federal government.
This advantageous position has allowed Sarawak to negotiate efficiently with Putrajaya and obtain concessions that benefit Sarawak the most.
The State Sales Tax (SST) imposition in 2019 was a masterstroke, allowing Sarawak to generate substantial revenues from its oil and gas resources, away from the never-ending dialogue of demanding greater petroleum royalties which Putrajaya opposed.
With larger political dominance by Sarawak in the national political space, Sarawakians are confident that there is more to come in terms of facilitating the return of Sarawak rights and boosting the local economy.
The state is also demanding greater representation in Parliament, this will be the next objective. This allows Sarawak to play a bigger part in national administration and influence national politics as they will have the numbers to do so.
This will go a long way in contributing to the nation’s growth in a changing world and future challenges whereby Sarawak can provide leadership when leadership appears to be few and far between.
The views expressed here are those of the writer and do not necessarily represent the views of the Sarawak Tribune.
