Petroliam Nasional Bhd ( Petronas ), a state-owned oil company in Sarawak, has been accused of breaking its laws by the state government, deepening a conflict that has already sparked foreign investor unrest in a sector crucial to the Malaysian economy.
The Sarawak’s Utilities and Telecommunications Ministry sent a letter to Petronas Carigali Sdn Bhd, a wholly owned subsidiary of the Malaysian oil giant, stating that the state’s coastal Miri Crude Oil Terminal (MCOT ) facility was being operated without a license as required by Section 7(e ) of its Distribution of Gas Ordinance.
CNA saw an anonymous letter from Petronas Carigali’s Senior General Manager that stated that the Sarawak state government had given the company 21 days to obtain a license or face an unknown financial penalty.
The letter also made reference to three prior letters, which were first sent in December 2023 and then later in February and August of last year, which suggested the terminal’s licence problem has been raging for some time.  ,
Any “operator of a building, managing or maintaining a gas pipeline or any other apparatus, equipment, or mechanism for the distribution of gas” must be licensed, according to Section 7(e ) of the Distribution Gas Ordinance.
CNA requested a reply, but Petronas has not yet responded.
Utusan Malaysia, a Malay language everyday, initially reported on Sarawak’s decision on Friday.
The most recent Sarawak order, according to senior business executives with close ties to the oil giant, amounts to an open issue by the condition to Petronas ‘ decades-old monopoly since it was established under a 1974 parliamentary statute known as the Petroleum Development Act or PDA.
The PDA, among other things, establishes that the federal oil firm is the only owner of the world’s oil reserves.
Sarawak insists that PDA does not apply to the state, insisting that 60.87 % of Malaysia’s total reserves of petroleum are probable and proven, accounting for 90 percent of its liquified natural gas ( LNG ) exports.
Additionally, it wishes to have greater control over its resources through Petros, a wholly owned company.
TITLE FOR Po
In its progressively contentious debate with Petronas, industry executives are unsure why Sarawak has trained its weapons on MCOT, a center the Malaysian state-oil company has been running since 1988.
MCOT is located in Sarawak along the Miri beach. The service serves as a gateway for the transportation of crude oil and natural gas from offshore Sarawak grounds for processing and other purposes.
Following claims that Petros does have engaged in business espionage to gain some sort of leverage in its face-off with Petronas, some have suggested that this was a tit-for-tat action.
Khairul Akmal Jasni, the former director of Petronas, entered a not-guilty plea in a Sessions Court in Kuala Lumpur on April 18 to a charge of trying to drip highly sensitive information to Petros in June of last year.
The claims that Khairul sought to share a file titled” Q1 2024 , Upstream Business Performance, Operational &, Financial” have put Petros and the state government under the leadership of Premier Abang Johari Openg in a odd circumstance have made business spying cases extremely uncommon in Malaysia.
Researchers have noted that the state government of Abang Johari’s position is a key supporter in Prime Minister Anwar Ibrahim’s alliance government, and that the rising conflicts with Petronas have strained federal-state relationships.
International INVESTOR UNEASE
According to CNA, the state’s conflict over the power of hydrocarbon resources has even sparked unease among foreign investors in the oil and gas industry.  ,
US oil tycoPhillips made the decision to resign from operating the Salam-Patawali deepwater oil and gas industry in a little-known surprise move past fortnight. The company discovered the area with Petronas in a 50-50 joint venture that was anticipated to charge RM13.7 billion ( US$ 3.13 billion ).
Business professionals noted that the choice was motivated by companies ‘ extremely unreliable regulatory environment in Sarawak.
Sarawak is contesting Petronas ‘ overarching authority under the PDA and wants all of its oil reserves to be governed by a 1958 colonial-era Oil Mining Ordinance, which states that the condition is the owner of all oil and gas resources located within 200 nautical miles of its lakes.
Both events have tried to reach a deal in discussions that started in April of last year, but they have broken down double, with Petronas suspending all discussions in December, according to professionals from the federal oil firm.