Petronas takes Sarawak to court, may lose at the UN

Here's the Act; free download:

http://www.agc.gov.my/agcportal/uploads/files/Publications/LOM/EN/Act%20144%20-%20Petroleum%20Development%20Act%201974.pdf

Don't forget about the Malaysia Agreement 1963.

Pay attention to this article below; Sarawak and Sabah are *not* just states in Malaysia.

Per the INTERNATIONAL AGREEMENT filed in the United Nations, Sarawak and Sabah have special rights and priviledges that Malaysia's Federal Government cannot revoke unilaterally. Sarawak has just cause to stand its ground. (I lived in Sarawak for 3 years.)

Even The Edge Financial Daily Newspaper got this bit wrong in their article today (normally The Edge does a good job in reporting the facts - can someone kindly alert The Edge Newspaper, remind them of Malaysia Agreement 1963).

> > > SARAWAK AND SABAH ARE *NOT* JUST STATES IN MALAYSIA.
(Apologies for shouting...)

https://asklegal.my/p/5-facts-about-the-malaysia-agreement-1963

Don't forget about the Malaysia Agreement 1963.

Pay attention to this article below; Sarawak and Sabah are *not* just states in Malaysia.

Per the INTERNATIONAL AGREEMENT filed in the United Nations, Sarawak and Sabah have special rights and priviledges that Malaysia's Federal Government cannot revoke unilaterally. Sarawak has just cause to stand its ground. (I lived in Sarawak for 3 years.)

Even The Edge Financial Daily Newspaper got this bit wrong in their article today (normally The Edge does a good job in reporting the facts - can someone kindly alert The Edge Newspaper, remind them of Malaysia Agreement 1963).

> > > SARAWAK AND SABAH ARE *NOT* JUST STATES IN MALAYSIA.
(Apologies for shouting...)

https://asklegal.my/p/5-facts-about-the-malaysia-agreement-1963

http://www.freemalaysiatoday.com/category/nation/2017/09/22/why-peninsular-states-arent-equal-to-sarawak-and-sabah/

http://www.freemalaysiatoday.com/category/nation/2017/09/22/why-peninsular-states-arent-equal-to-sarawak-and-sabah/

Get the facts right concerning the Petroleum Development Act 1974 and the Malaysia Agreement 1963.

Petronas will likely win a Malaysia Federal court case, but Petronas will likely *lose* the case in the United Nations if Sarawak decides to escalate this to international court in the U.N.

Get the facts right concerning the Petroleum Development Act 1974 and the Malaysia Agreement 1963.

Petronas will likely win a Malaysia Federal court case, but Petronas will likely *lose* the case in the United Nations if Sarawak decides to escalate this to international court in the U.N.

Amir Hisham Albakri heh heh, understood. I lived 3 years in Sarawak. I tend to get annoyed when media lump together Sarawak and Sabah with the individual states in Peninsular Malaysia.

For lurkers, Malaysia was comprised of 4 separate entities coming together to become 1 nation: Malaya (Peninsular Malaysia), Singapore, Sarawak and Sabah.

Sarawak and Sabah were granted special rights and priveledges under the Malaysia Agreement 1963, an international agreement filed with the United Nations.

Malaya (Peninsular Malaysia) cannot unilaterally revoke rights and privileges of Sarawak and / or Sabah; that would need to be re-negotiated by all parties in international court.

Hence my remarks.
Yes, Petronas would likely win in *Malaysia* federal court referencing the Petroleum Act 1974.
But Sarawak would likely win in *international* court in the U.N. referencing the Malaysia Act 1963.
Dangerous game for Petronas to pursue.

Amir Hisham Albakri heh heh, understood. I lived 3 years in Sarawak. I tend to get annoyed when media lump together Sarawak and Sabah with the individual states in Peninsular Malaysia.

For lurkers, Malaysia was comprised of 4 separate entities coming together to become 1 nation: Malaya (Peninsular Malaysia), Singapore, Sarawak and Sabah.

Sarawak and Sabah were granted special rights and priveledges under the Malaysia Agreement 1963, an international agreement filed with the United Nations.

Malaya (Peninsular Malaysia) cannot unilaterally revoke rights and privileges of Sarawak and / or Sabah; that would need to be re-negotiated by all parties in international court.

Hence my remarks.
Yes, Petronas would likely win in *Malaysia* federal court referencing the Petroleum Act 1974.
But Sarawak would likely win in *international* court in the U.N. referencing the Malaysia Act 1963.
Dangerous game for Petronas to pursue.

Good article, Amir. Balanced and level-headed.

Now please review this from a few weeks ago. Note the last sentence:

Examine the rights of Sabah and Sarawak over their national resources and oil and gas reserves.

https://www.linkedin.com/feed/update/urn:li:activity:6404521017846390784

Ministers in Malaysia’s new government began their first day at work on Tuesday, having promised a slew of economic and financial reforms in the lead up to a stunning election win over an alliance that had led the country for the six decades since independence.

Prime Minister Mahathir Mohamad’s government has vowed to fulfill some of those promises in its first 100 days.

Here are the key points from the manifesto:
...
● Revamp the National Trust Fund Act — a fixed percentage of state oil and gas firm Petronas’ profits, at a minimum of 10 billion ringgit a year, and profits of other government linked companies to be channeled into the fund.

● Increase petroleum royalties to East Malaysian states Sabah and Sarawak, and other petroleum producing states, to 20 percent. Examine the rights of Sabah and Sarawak over their national resources and oil and gas reserves."

Amir Hisham Albakri Very much correct, on all points.

Amir Hisham Albakri Very much correct, on all points.

Amir Hisham Albakri
A couple years ago I interviewed Dr. Mahathir about Petronas. Here is one of the questions and responses:
==========================

Question: Petronas reports to the Prime Minister’s Office.
As Malaysia’s National Oil Company, how independent is Petronas from the government?

Dr. Mahathir: Petronas is quite independent in its operations, but for guidance on policies, it goes to the Prime Minister. When I was Prime Minister, I was able to get Petronas, for example, to go abroad, to go into other activities in the oil industry. Because the normal National Oil Companies normally only collect royalties, they don’t get involved in the production, acquiring the engineering and all that. But Petronas is different from other National Oil Companies. They do everything. Almost as if they are one of the multinationals. So that is because they were directed to do.

But the Prime Minister has a lot of influence on the strategy and the policies. But the actual operation, Petronas is quite free.

Amir Hisham Albakri
A couple years ago I interviewed Dr. Mahathir about Petronas. Here is one of the questions and responses:
==========================

Question: Petronas reports to the Prime Minister’s Office.
As Malaysia’s National Oil Company, how independent is Petronas from the government?

Dr. Mahathir: Petronas is quite independent in its operations, but for guidance on policies, it goes to the Prime Minister. When I was Prime Minister, I was able to get Petronas, for example, to go abroad, to go into other activities in the oil industry. Because the normal National Oil Companies normally only collect royalties, they don’t get involved in the production, acquiring the engineering and all that. But Petronas is different from other National Oil Companies. They do everything. Almost as if they are one of the multinationals. So that is because they were directed to do.

But the Prime Minister has a lot of influence on the strategy and the policies. But the actual operation, Petronas is quite free.

Amir Hisham Albakri yes, all sorts of politics going on with this. And LinkedIn is not exactly a good place to delve too deeply into the political machinations going on behind this dispute.

● All of Malaysia's LNG comes from Sarawak.
● Malaysia is currently the world's 3rd largest exporter of LNG.
● Petronas will not want to lose control of Sarawak LNG.

One hiccup for Petronas is, the election manifesto by Pakatan Harapan, which promised to increase royalty to oil & gas producing states from 5% to 20%. And also to re-examine the Petronas monopoly on oil & gas in the country.
This is in addition to Sarawak's objections raised years ago that the Federal government encroached on Sarawak's rights. For example, changing the territorial water from 12 miles to 3 miles.
Petronas is likely in for a big surprise if it strong arms Sarawak.
Also relevant is that the Petroleum Development Act was passed while Malaysia was under a state of Emergency and Parliament was suspended... Sarawak says the Act is not valid as the Emergency was lifted, and Sarawak Parliament never agreed to the Petroleum Development Act, which was forcibly enacted during the Emergency.

This is not a clear cut case. Petronas will not be helping itself if it acts like an 800 pound gorilla against Sarawak. Because Sarawak can legally take this to the United Nations under the Malaysia Agreement 1963, well above and beyond the scope of Malaysian courts.

● All of Malaysia's LNG comes from Sarawak.
● Malaysia is currently the world's 3rd largest exporter of LNG.
● Petronas will not want to lose control of Sarawak LNG.

One hiccup for Petronas is, the election manifesto by Pakatan Harapan, which promised to increase royalty to oil & gas producing states from 5% to 20%. And also to re-examine the Petronas monopoly on oil & gas in the country.
This is in addition to Sarawak's objections raised years ago that the Federal government encroached on Sarawak's rights. For example, changing the territorial water from 12 miles to 3 miles.
Petronas is likely in for a big surprise if it strong arms Sarawak.
Also relevant is that the Petroleum Development Act was passed while Malaysia was under a state of Emergency and Parliament was suspended... Sarawak says the Act is not valid as the Emergency was lifted, and Sarawak Parliament never agreed to the Petroleum Development Act, which was forcibly enacted during the Emergency.

This is not a clear cut case. Petronas will not be helping itself if it acts like an 800 pound gorilla against Sarawak. Because Sarawak can legally take this to the United Nations under the Malaysia Agreement 1963, well above and beyond the scope of Malaysian courts.

Aaargh, LinkedIn comments are frustrating, not a proper forum, comments don't stay in posting sequence. Long threads with many comments will get pretty difficult to wade through, as the sequence of comments is lost.

Amir Hisham Albakri, right again.