PETALING JAYA: National oil company Petronas has taken another step towards resolving the thorny issues in Sarawak with the signing of a commercial agreement with the state government for the management of oil and gas resources there.
In a statement welcoming the deal, Prime Minister Muhyiddin Yassin said the deal would open a “new chapter” in the efforts to boost the development of the state’s oil and gas industry and create new business opportunities.
Earlier this year, Petronas agreed to pay some RM2 billion in sales tax owed to Sarawak after reaching a settlement over a dispute on the management of oil and gas extracted from the state.
In January last year, the Sarawak government imposed a 5% sales tax on Petronas’ petroleum products under the state’s Sales Tax Ordinance 1998.
Petronas, however, refused to pay, saying it was unconstitutional, resulting in the state government’s taking legal action.
The High Court then ruled in favour of the Sarawak government, but Petronas appealed the decision. However, it has since agreed to drop the action..
“The agreement inked today will also allow Petroleum Sarawak Berhad (Petros), a subsidiary of the Sarawak state government, to play a bigger role in the oil and gas industry through cooperation with Petronas,” said Muhyiddin.
“It will also open up more opportunities for companies in the industry in Sarawak to explore new business opportunities.”
Muhyiddin said Petronas would continue to play a role as the national petroleum company with full powers to regulate the development of the overall oil and gas industry.
The deal, he said, also represented the federal government’s commitment to resolving issues with the Sarawak government.