Sarawak files petition to counter PETRONAS challenge on O&G laws

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By DayakDaily Team

KUCHING, Feb 23: The Sarawak government has filed a petition in the Federal Court to challenge the applicability of key federal laws on oil and gas (O&G) in the State, following PETRONAS’ move to question the validity of Sarawak’s petroleum laws.

Deputy Minister in the Sarawak Premier’s Department (Law, Malaysia Agreement 1963 and State-Federal Relations) Datuk Sharifah Hasidah Sayeed Aman Ghazali said the petition targets the Petroleum Development Act (PDA) 1974, the Continental Shelf Act 1966, and the Petroleum Mining Act 1966, which infringe on the State’s rights over offshore O&G within the State’s boundaries.

“Under the Malaysia Agreement 1963 (MA63) and the constitutional instruments annexed thereto, the sovereign rights to the petroleum resources in the seabed within Sarawak’s boundaries, were vested on Malaysia Day by the British Government, in Sarawak and not in the Federation or federal government.

“Item 2(c) of the Ninth Schedule of the Federal Constitution vests legislative authority in the Dewan Undangan Negeri to regulate the exercise of these petroleum rights through the issuance of mining leases, certificates, and prospecting licenses,” she said in a statement today.

She further explained that the Continental Shelf Act 1966 and the Petroleum Mining Act 1966 were originally applicable to the States of Malaya, but were extended to Sarawak by an ordinance passed after the 1969 Proclamation of Emergency.

“That Emergency was annulled by both Houses of Parliament in December 2011. Therefore, by June 2012, these two laws should no longer apply to Sarawak by reason of Article 150(7) of the Federal Constitution,” she added.

PETRONAS had on Jan 10 filed an application seeking leave to approach the Federal Court to challenge the validity of several State laws, purportedly to seek judicial clarity on regulations governing its petroleum operations, business and other activities in Sarawak. The application is scheduled for hearing on March 16, 2026.

Sharifah Hasidah said the Sarawak government will be objecting to PETRONAS’ application, which does not fall within the Federal Court’s exclusive original jurisdiction under Article 128(1)(a) of the Federal Constitution.

“Therefore, the Sarawak government is also seeking the determination of the Federal Court under Articles 4(3) and 128(1) of the Federal Constitution on the validity of these federal Acts in so far as they apply to Sarawak,” she said.

She also stressed that the ruling would provide clarity on the regulatory framework for the O&G industry in Sarawak especially to investors in both upstream and downstream businesses.

At the same time, Sharifah Hasidah reiterated the Sarawak government’s willingness to engage in constructive talks with the federal authorities to reach an amicable resolution. — DayakDaily

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