KUALA LUMPUR: Petroliam Nasional Bhd will await the decision by the federal government over oil royalty issue as well as oil and gas regulatory rights in Sarawak, its chief said.
President and chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin also said Petronas was in discussions with Petroleum Sarawak Bhd on mutually acceptable working arrangements for all parties.
“We will leave the oil royalty percentage negotiations to the government and will be guided by the federal government of Malaysia as our shareholder, whatever the final outcome may be.
“However, we are in discussions with Petros on how working arrangements can be sorted out that are mutually acceptable to all parties.
“But we must remember that we need to keep the oil and gas industry in Malaysia resilient and to ensure Malaysia remains as an attractive destination for foreign oil and gas players,” he clarified when asked on the status of oil and gas industry in Sarawak.
The Sarawak government had claimed the “regulatory rights” over the oil and mining activities in the state as well as higher oil royalty of 20 per cent from the current five per cent.
Regulatory framework would include the licensing requirements, land as well as oil and mining rights which affects all the small and major players in the state.
Several PSCs had raised concerns over the non-clarity over the regulatory direction over their operations in Sarawak.
Wan Zulkiflee stressed that Petronas did not want production-sharing contractors (PSCs) to bear the brunt of the current disagreement regarding Petroleum Development Act 1974 and Oil and Mining Ordinance 1958.
He said for now the PSCs were reporting to Petronas and this will continue until the discussions with Petros were concluded, expectedly by the year-end.
“To our understanding, there is a grace period for us to settle all these matters by the end of this year,” he added.
Wan Zulkiflee also confirmed that Petronas was not in talks with any other states over oil royalty increase.