KUALA LUMPUR: The Sarawak State government and Petroliam Nasional Bhd (Petronas) have reached a consensus over the management of oil and gas assets in the state.
Prime Minister Tan Sri Muhyiddin Yassin in a statement today said this came following a review of the Malaysia Agreement 1963, which officially began in December 2018.
Following this, he said, both the state government and Petronas had reached an amicable solution on the management of Sarawak oil and gas assets, and the sales tax on petroleum products.
"It offers a sustainable and long-term solution in terms of economic, financial and social aspects.
"This is also in line with the government's primary policy, the Shared Prosperity Vision 2030, which aims to share the country's prosperity across various income, ethnicity and regional groups."
Muhyiddin said the resolution would also allow a joined participation between the Sarawak state government and Petronas in developing the oil and gas industry in the state.
This, he said, would be done without disrupting Petronas' role as the national oil company, with a full authority over regulating the development of the oil and gas industry in the country in accordance with the Federal Constitution.
"The committee that will be jointly chaired by the Works Minister (Datuk Seri Fadillah Yusof) and Finance Minister (Tengku Datuk Seri Zafrul Tengku Abdul Aziz) will ensure that negotiations are continued over the production received by all parties," the statement read.
Earlier today, it was reported that Petronas had agreed to pay in full the petroleum products sales tax imposed by the state government for the year 2019, which amounts to RM2 billion (five per cent of the products' sales value).
This marked a resolution for the legal battle between the state government and Petronas over this matter, as well as on the management of oil and gas assets in Sarawak.
The state government, in a statement earlier, had said both parties agreed that future petroleum products sales tax would be lower and staggered based on future negotiations, under the State Sales Tax (Taxable Goods and Rate of Tax)(Amendment)(No 2) Order, 2018.
It said the sales tax would be limited to petroleum products stipulated under Order 2018.