Malaysia Plenty Of Uncertainties Ahead For Sarawak, Petros

摘要

BMI View: Sarawak will gain complete regulatory authority over all upstream and downstream activities in its territory from July 2018, in keeping with Prime Minister Najib Razak’s pledge to restore the state’s historical rights as per the terms of the Malaysia Agreement of 1963. The development is still in the early stages, though plenty of uncertainties remain, most pertinently relating to the exclusive rights over national oil and gas resources vested in state-owned Petronas by the Petroleum Development Act of 1974. The Malaysian state of Sarawak will gain complete regulatory authority over all upstream and downstream activities in its territory from July 2018, as part of the devolution of powers from the federal government. This is in keeping with the Malaysia Agreement of 1963, under which the Federation of Malaysia promised the former British colonies of Sarawak, Sabah and Singapore full control over their own oil and gas resources, for agreeing to become a part of Malaysia. The move is also regarded to be an election ploy by Prime Minister Najib Razak in order to ensure the state’s loyalty to his party the Barisan Nasional (BN) for the upcoming general elections that must be held by August 2018 (see ‘Election-Related Spending No Threat To Fiscal Consolidation’, March 14).