PETRONAS granted leave to challenge Sarawak’s O&G ordinances in Federal Court

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By DayakDaily Team

KUCHING, March 16: National oil company Petroliam Nasional Berhad (PETRONAS) has been granted leave by the Federal Court of Malaysia to pursue a constitutional challenge against several Sarawak laws governing oil and gas matters.

According to a report by Free Malaysia Today (FMT), the decision was made by Chief Judge of Malaya Datuk Seri Hashim Hamzah, who sat as a single judge and ruled that PETRONAS had met the legal threshold for the court to hear its petition.

“(PETRONAS) has met the threshold for the court to hear its petition,” he said after hearing submissions from lawyers representing PETRONAS, the Sarawak government, and the federal government.

PETRONAS was represented by lawyers Dato Cyrus Das and Khoo Guan Huat, while Dato Sri Saferi Ali appeared as Sarawak Attorney-General together with the State government’s legal counsel Dato Sri JC Fong.

During proceedings, Das argued that amendments passed by the Sarawak Legislative Assembly to several State ordinances — including the Distribution of Gas Ordinance (DGO) and the Oil Mining Ordinance — contravened provisions under the Federal Constitution of Malaysia.

He said the amendments allegedly violated Sections 1(a), 8(c), 8(j) and 11(c) of the Ninth Schedule, which relate to treaties, trade, development of mineral resources, and the production and distribution of power and energy.

According to Das, matters relating to these areas fall under federal jurisdiction and can only be legislated by the Dewan Rakyat.

He also argued that amendments to the DGO passed in 2023 effectively designated Petroleum Sarawak Berhad (PETROS) as the sole gas aggregator in Sarawak, replacing PETRONAS in that role.

Fong, however, opposed PETRONAS’ application, arguing that the constitutional challenge should have been initiated at the High Court instead of the apex court. He maintained that the Sarawak Legislative Assembly had acted within its jurisdiction in passing the amendments.

Senior federal counsel Ahmad Hanir Hambaly, appearing for the federal government, told the court that Government of Malaysia had no objection to PETRONAS pursuing the constitutional challenge and said the matter should proceed to a full hearing.

Following the ruling, Hashim ordered PETRONAS to file its petition detailing the ordinances and provisions being challenged within 21 days.

PETRONAS had previously said it filed the suit to obtain a definitive ruling from the Federal Court on the legal position governing the petroleum sector in Sarawak and to ensure its operations in the State comply with applicable laws and governance practices. — DayakDaily

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