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Now, only one licence required for oil & gas exploration, prospecting and mining in Sarawak

July 11, 2018 4:05 PM
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PETALING JAYA: The Sarawak State Assembly has passed the Oil Mining (Amendment) Bill 2018 which requires only one licence for exploration, prospecting and mining of oil and gas, a move which Sarawak feels will encourage more investments into the state.

According to the Hansard of that day’s sitting, Sarawak Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan said the state government will have the power to issue a single licence and lease for exploration, prospecting and mining of oil and gas, which previously required three licences under the Oil Mining Ordinance 1958.

The amendment was based on feedback received from industry players, stakeholders and investors who expressed preference for an option of having the right to explore, prospect and mine oil and gas conferred under a single licence and lease.

Amendments were also made to empower the state executive council to grant an oil prospecting licence and oil mining lease, whether or not the applicant has previously been granted an oil exploration licence. Another clause stipulates that a licence or a lease cannot be transferred without the prior written approval of the state exco.

Meanwhile, the state minerals management authority is empowered to delegate any of its powers, functions, duties or responsibilities to the minister, a committee formed by the authority comprising its members or any other persons named in the notification, any public officer or any person.

The state government said it is prepared to engage constructively with national oil company Petroliam Nasional Bhd (Petronas) to establish a regulatory framework for the exploration, prospecting and mining of oil and gas in Sarawak.

Awang Tengah gave an assurance that the regulatory framework will not undermine Petronas’ operations and investments in the state.

“However, Petronas must demonstrate its willingness to respect and comply with our state laws. Also, Petronas should show its commitment to meet the aspirations of Sarawak for more equitable and just returns from the exploitation of oil and gas and greater and more active participation by Sarawakians and Sarawak companies in the upstream and downstream sectors of the oil and gas industry in Sarawak,” he said.

The latest move by the Sarawak government comes as Petronas continues to maintain that it is the sole regulator and owner of oil and gas activities in the country. An earlier bid by Petronas to get the Federal Court to make a declaration on its status was thwarted by technical issues.

Industry observers, however, believe that Petronas is bound to make another bid to maintain the status quo.


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