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Sabah to get more revenue, bigger say on oil and gas

Updated: Dec 19, 2022

December 3, 2021 7:20 PM

Sabah chief minister Hajiji Noor said the state will get greater revenue sharing, greater participation and greater say in oil and gas-related matters. (Bernama pic)

KOTA KINABALU: Sabah will receive higher revenue and have a bigger say on matters pertaining to its oil and gas industry following successful talks involving the state, federal government and Petronas.

Chief minister Hajiji Noor, when tabling the state Budget 2022 today, announced that the three parties had successfully concluded negotiations on the commercial collaboration agreement (CCA).

“After a long time of legacy issues related to the Petroleum Development Act 1974 (PDA 1974), this agreement will bring greater value and meaning to Sabah,” he said.

“Sabah will get greater revenue sharing, greater participation and greater say in oil and gas-related matters.”

He added that mutual understanding and agreement had been reached between the parties and the CCA would be signed soon.

The chief minister, however, did not disclose details on the agreement.

Various Sabah leaders, including deputy chief minister Jeffrey Kitingan, have long called for Putrajaya to deliver better terms and a bigger share of profits from oil and gas to the state.

Following the inking of a commercial deal between Sarawak and the then Perikatan Nasional government in December last year, Kitingan said Sabah also deserved a similar deal as both states have the same rights under the Malaysia Agreement 1963.

The agreement allows the Sarawak government, through its subsidiary Petroleum Sarawak Bhd (Petros), to play a bigger role in the oil and gas industry through cooperation with Petronas.

Meanwhile, Hajiji said the state government and Petronas had also conducted a joint study to determine the added value of the gas industry, which can provide long-term economic returns for Sabah.

An example of this effort, he said, was the state’s consent for Petronas to build a nearshore liquefied natural gas (LNG) facility in the Sipitang Oil and Gas Industrial Park, located in southwest Sabah, which will be the first in the state.

“In addition, Sabah will also have gas allocations to support downstream industries in the state,” he said.



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