July 3, 2018 · 1 min read

Petronas fires back at Sarawak; its arrogance may backfire

Tom KirkmanIndependent Project Manager

Petronas fires back at Sarawak in the dispute over oil rights.

● Petronas has in its side:
> the Petroleum Development Act 1974
– (a local Malaysian statute)

● Sarawak has on its side:
> the Malaysia Agreement 1963
– (an international agreement between U.K., Peninsular Malaysia, Sarawak, Sabah and Singapore)
and also
> the Sarawak Oil Mining Ordinance 1958
– (a local Sarawak statute)

It seems that Petronas is totally unwilling to compromise with Sarawak. In my opinion, that unwillingness is unwise.

Sarawak lawyer has previously stated that Sarawak will comply with Malaysia Federal regulations, but they also want Petronas to comply with Sarawak State regulations.

Petronas arrogance might end up being a footbullet in this dispute.

Note that Sarawak, Sabah, Singapore and Peninsular Malaya joined together AS EQUAL PARTNERS to form the country of Malaysia.

theborneopost.com ↗

Read the linked article on theborneopost.com ↗

FROM THE THREAD

Tom's notes 14

Tom KirkmanJul 3, 2018
Agreed. So far it is more of a zero sum contest where there can only be 1 winner and 1 loser. I've commented repeatedly that it would be far better for both sides to sit down amicably and work toward a win-win solution.

So far, the situation seems stuck in a zero sum morass.

I've seen a bit of flexibility coming from the Sarawak side, where the lawyer for Sarawak stated that Sarawak will comply with Federal laws, but Sarawak also want Petronas to comply with Sarawak laws.

Some compromise from both sides will be needed to properly resolve to a mutually beneficial solution.

Just my opinion; as always, you are free to disagree.
Tom KirkmanJul 3, 2018
True. But immensely *more* billions have been removed from Sarawak.

It would be better for Petronas and Sarawak to work together rather than fight.
Tom KirkmanJul 3, 2018
Thanks Mohd Farid. I've been commenting about this quite a bit over the last few weeks. Here's just a few of my recent posts about this (you can find many more about Petronas / Sarawak in my profile if you are interested)

https://www.linkedin.com/feed/update/urn:li:activity:6416832164717002752

https://www.linkedin.com/feed/update/urn:li:activity:6415704055389229056

https://www.linkedin.com/feed/update/urn:li:activity:6418231960677814272

https://www.linkedin.com/feed/update/urn:li:activity:6417533334049652736

https://www.linkedin.com/feed/update/urn:li:activity:6418971705301135360

https://www.linkedin.com/feed/update/urn:li:activity:6419338297025363968
Tom KirkmanJul 3, 2018
Mohd Farid Mohd Salleh
Thanks, I'm a Permanent Resident of Malaysia, and married to a Malaysian citizen for a couple decades. Lived 3 years in Sarawak, working in oil & gas.

I'm a moderator over on the Oil Price forum, which is mostly about international oil & gas.

For local Malaysia O&G I tend to comment here on LinkedIn, since there don't seem to be many Malaysians yet on the international Oil Price forum.

https://goo.gl/mVWofC
Tom KirkmanJul 3, 2018
Masni Binti Mustafa
In my spare time, I'm a moderator on the Oil Price forum, and before that was a moderator on the Oilpro forum. Part of a moderator's function is to calm down heated debates, when tempers flare, and get disputing members to settle down and play nice together.

It's actually good practice for conflict resolution (and contract negotiation) in professional life.

When people are upset and get pissed off, they tend to be irrational, unreasonable, and also tend to exaggerate. Difficult to reason with. The first step is to calm down the flared tempers.

I'll repeat yet again, the better solution to fighting is to sit down at a neutral negotiating table and work toward a mutually beneficial, amicable solution.

Heck, I'd be willing to moderate a negotiation toward an amicable solution with Petronas and Sarawak - I'm not shy or inexperienced. Previously I've interviewed Dr. M about Petronas, and am fairly well versed in both Petronas and Sarawak interests in oil & gas.
Tom KirkmanJul 3, 2018
Syed Zafirna W Hasmi
Valid points. I'll repeat yet again, both sides need to compromise. Neither Petronas nor Sarawak should go it alone in oil and gas.

It would be better for Petronas and Sarawak to WORK TOGETHER to sort this out in a friendly manner, to work toward a mutually beneficial solution.

Notice I keep repeating the term
*Mutually Beneficial Solution*.

Enough of the pointless "Winner Takes All" fight. The Zero Sum thinking of "I can only win if you you lose" is counterproductive and unprofitable for Malaysian oil & gas (and LNG).
Tom KirkmanJul 3, 2018
Mohd Farid Mohd Salleh
Fair analogy. But this dispute is a bit more complicated.
For starters, the Petroleum Development Act 1974 was never voted on and ratified by Sarawak legislate. The Chief Minister of Sarawak handed over the rights to Sarawak's oil & gas to Petronas unilaterally. It was not his power to do so. Which means that since the PDA 1974 was never properlyy ratified by Sarawak Legislature as per the constitution, the PDA 1974 could be considered unconstitutional.

Contrary to either Petronas or Sarawak's assertions, this dispute is not black and white, right vs wrong, cut and dried absolutes.

Both sides need to compomise. Both sides need to know off the feuding and work toward a mutually beneficial solution.

Hey Sabah, why are you staying in the sidelines about this?
Tom KirkmanJul 3, 2018
Mohd Farid Mohd Salleh
You wrote:
They need to realize that they need each other rather than killing the other half.

Thank you, I seem to have gotten my point across, at least to you anyway.
Tom KirkmanJul 3, 2018
Masni Binti Mustafa
Thanks for your kind words.
Maybe you can invite Petronas and / or Sarawak to have an amicable discussion with me about this. It would be rude for me to invite myself...
My views on this dispute are easy enough to find in my comments here on LinkedIn.
Tom KirkmanJul 3, 2018
Mohd Farid Mohd Salleh
Heh heh, so then you must be an expert in conflict resolution : )
Tom KirkmanJul 3, 2018
Mohd Farid Mohd Salleh
Practice produces improvements.

Good on you for trying to listen more, and for trying to view alternate perspectives.

Here's part of my moderator's advice to members on the Oil Price forum:
===========================

... As a former moderator on the Oilpro forum, (and now a moderator here on the Oil Price Community forum) I *encourage* dissent, and *encourage* Freedom of Speech, and *encourage* others to freely voice their views and convictions about oil & gas.

A diversity of global views is what makes the world a special place. Conformity is just a slow, painful death of not speaking your mind. So SPEAK UP. Please don't be a jerk about about it, though. If you want others to consider your views, please be willing to consider the views of others.

https://community.oilprice.com/profile/2249-tom-kirkman/?tab=field_core_pfield_1
Tom KirkmanJul 3, 2018
Update, the tit for tat feuding continues:
===========================

Minister of Tourism, Arts, Culture, Youths and Sports Datuk Abdul Karim Rahman Hamzah has described Petroliam Nasional Berhad’s (Petronas) statement as showing smack of arrogance and insensitivity.

He was referring to Petronas’ statement to maintain its claim over Sarawak’s oil and gas resources, stating it has exclusive ownership of the petroleum resources in Malaysia. The statement on also said it is the sole regulator of the upstream sector in the country.

Abdul Karim said this does not bode well with Sarawak and its people, prompting him to ask whether this was a new form of ‘colonisation’.

“It will not go down well with Sarawak and its people. Here we have a company telling the largest state in Malaysia that its oil and resources are exclusively owned by them and only them are the sole regulator of its upstream business.

“Is this a new form of colonisation? Petronas that has grown into a global corporate entity from the resources of the state, has got big headed and biting back the hand that has fed it all these years,” he said today. ...

http://www.theborneopost.com/2018/07/03/petronas-statement-shows-smack-of-arrogance-insensitivity-abdul-karim/
Tom KirkmanJul 3, 2018
Ramesh Ramasamy
Again, tit for tat feuding, from both sides.
< sigh >
Tom KirkmanJul 3, 2018
Both sides need to give and take. A compromise needs to be worked out. Infighting is no good for Malaysia.

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