KUCHING, Oct 30 — The Sarawak government has issued mining leases to its oil and gas (O&G) company, Petroleum Sarawak Bhd (Petros), to carry out onshore mining of O&G, marking the beginning of efforts to exercise the state’s constitutional rights to regulate onshore oil mining.
Chief Minister Datuk Patinggi Abang Johari Tun Openg who made the announcement tonight said the leases were for the Adong Kecil West in Miri district and the Engkabang block in Marudi district.
“The state government, through Petros, will have the control of, and legal titles to, all the oil and natural gas produced from the onshore areas, and to select and appoint contractors or enter into ventures with investors to explore and produce O&G from onshore Sarawak,” he said at a Petros dinner for the state’s (O&G) industry players here.
He said the issuance of the leases were made possible through the state’s Oil Mining Ordinance 1958, which regulates oil mining in Sarawak and its continental shelf, as well as under Item 2(c) List II (State List) in the Ninth Schedule of the Federal Constitution.
“The Oil Mining Ordinance has never been repealed even during the period of the 1969 Proclamation of Emergency. The state government is firmly committed to regulating oil mining in the state to protect the interests and aspirations of Sarawakians,” he said.
Abang Johari said that since the 1970s, the focus on oil mining has been in the offshore areas of the state where significant reserves of oil and natural gas have been found and currently being produced.
“Although there have been significant exploration efforts since the 1980s by various international O&G companies onshore (Sarawak), the results have been very modest. (However,) we remain hopeful that we would be able to prove commercial reserves onshore which will augur well for the state,” he said.
The state government would put in place a fair and business friendly regulatory framework and environment to attract investors to participate in the development of the O&G industry in Sarawak, he said.
“We will continue to collaborate with the existing industry players already operating in Sarawak, including Petronas and Shell,” he added.
The state government would also strengthen the role of Petros in spearheading the state’s enhanced involvement in the O&G industry especially in the downstream sector.
“These efforts are geared towards securing adequate natural gas supplies needed to drive the state’s industrial development agenda, including the establishment of a petrochemical hub and gas processing plant to enhance the security of supply for liquefied petroleum gas (LPG) to meet the increasing demands for LPG in the state,” he added.