SBF backs Federal Court petition to clarify jurisdiction, boost Swak O&G investment confidence

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By DayakDaily Team

KUCHING, Feb 25: Clear legal delineation of jurisdiction and legislative authority in Sarawak’s oil and gas sector will provide greater assurance to investors and industry participants as well as enabling more confident long-term planning.

Sarawak Business Federation (SBF) voiced its support for the Sarawak government’s decision to seek judicial clarification from the Federal Court on the constitutional applicability of key federal petroleum legislation, namely the Petroleum Development Act 1974 (PDA74), the Continental Shelf Act 1966 (CSA66), and the Petroleum Mining Act 1966 (PMA66), as they pertain to Sarawak.

From a business perspective, SBF emphasised that regulatory certainty in the energy sector is critical as oil and gas remain a cornerstone of Sarawak’s economy, influencing investment decisions, industrial expansion, supply chains, and employment across multiple sectors.

SBF said an authoritative judicial determination would provide a responsible and orderly way to resolve constitutional questions of significant economic importance.

“Clear legal delineation of jurisdiction and legislative authority will give investors and industry participants the confidence to plan for the long term,” SBF said in a statement on Tuesday (Feb 24), welcoming ongoing constructive engagement between the State and federal governments to ensure that the outcome strengthens both Sarawak’s economic interests and national cohesion.

The statement came in response to the Sarawak government’s move to file a petition in the Federal Court on Monday (Feb 23), challenging the applicability of the PDA74, CSA66, and PMA66, 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 seeks judicial affirmation that these federal laws infringe on Sarawak’s rights over offshore oil and gas within the State’s boundaries.

She emphasised that under the Malaysia Agreement 1963 (MA63) and the associated constitutional instruments, sovereign rights to petroleum resources in Sarawak’s seabed were vested in the State, not the federal government, from Malaysia Day.

She also cited Item 2(c) of the Ninth Schedule of the Federal Constitution, which grants the Dewan Undangan Negeri legislative authority to regulate the exercise of petroleum rights through mining leases, certificates, and prospecting licenses.

SBF expressed confidence that the process will contribute to a stable, transparent, and sustainable framework for the development of Sarawak’s natural resources. — DayakDaily