Malaysian PM says Petronas will stick to contract commitments (updated)

Petros Petropoulos SA

17/02/2025 07:19

(Adds details, quotes; paragraphs 2-13)
       KUALA LUMPUR, Feb 17 (Reuters) - Malaysian state energy
firm Petroliam Nasional Berhad (Petronas) will maintain all its
contractual obligations, Prime Minister Anwar Ibrahim said,
after talks over gas distribution with Petroleum Sarawak Berhad
(Petros) fanned industry concerns.
        A recent deadlock in talks between Petronas and Petros,
run by the state of Sarawak, home to more than 60% of Malaysia's
gas reserves, stirred 
    concern
     over the likely impact on the revenues of the former, a
major contributor to government coffers. 
  
    On Monday, Anwar told parliament all detailed negotiations
between the two would follow transparent commercial principles,
and they would work together in the interest of the nation.
        Petronas will "maintain all existing domestic and
international contractual obligations," he added. 
  
        The assurance followed comments reported by the Borneo
Post newspaper from Sarawak premier Abang Johari Tun Openg that
the negotiations had yet to be resolved as some "grey areas"
remained.
  
        The federal government's decision to recognise Petros
came about because the state, on the island of Borneo, had
helped, through Petronas, in funding Malaysia's early growth, he
added.     
  
        On February 5, Law Minister Azalina Othman 
    confirmed
     Petros' role as the state's gas distributor, excluding
liquefied natural gas (LNG). 
  
    Policy, governance and development of Malaysia's energy
industry continue to thrive under the mandate of its Petroleum
Development Act of 1974, recognised by both the federal and
state governments, Anwar said. 
        But Petros will serve as Sarawak's gas aggregator under
a 2016 state ordinance on gas distribution that is set to take
effect on March 1, he added. 
  
        The measure guarantees up to 1.2 billion cubic feet a
day of natural gas for Sarawak's domestic needs, he said, adding
that Petros had the authority to expand into new activities and
benefit from cooperation with Petronas.
  
        Oil and gas industry development in Sarawak, including
upstream investment and infrastructure, was valued at a total of
more than 280 billion ringgit  ($63 billion) since 1976, Anwar
said.
  
        Sarawak has long sought greater control of its natural
resources. Last February it appointed Petros to procure,
distribute, supply and sell all natural gas produced in the
state to downstream buyers.
  
        A deadlock in negotiations last year had sparked some
industry worries over the potential impact on Petronas and
energy activities in Sarawak.
  
($1=4.4260 ringgit)

 (Reporting by Ashley Tang; Editing by John Mair and Clarence
Fernandez)
 ((ashley.tang@thomsonreuters.com;))