Expand special grant to break federal-S’wak O&G impasse

Malaysia's Prime Minister Anwar Ibrahim proposed a special grant to resolve the federal-Sarawak oil and gas impasse. However, the current situation shows that while broad principles may have moved closer, the unresolved commercial terms, operating authority and pending court cases indicate that the impasse has not truly closed. To address this, the government should consider expanding the RM1.5 billion interim special grant into a permanent and transparent direct-payment formula for Sarawak.

This approach may not settle every legal and control issue but could separate Sarawak's demand for a better return from the fight over Petronas's commercial ecosystem. The formula would provide clearer expectations for both parties, allowing Sarawak to benefit from a fair share of federal revenue without becoming a burden on Petronas's balance sheet and business model.

At the Malaysia Day celebration in Kuching, Anwar confirmed the grant in the spirit of solidarity and friendship with Sarawak. The grant's payment could fluctuate with national revenue, ensuring Sarawak shares in Malaysia's fiscal success while keeping Petronas responsible for its crucial role in the energy system. A permanent formula would settle the money question, preserve the national energy system, and provide Sarawak with a more durable return, while also maintaining Malaysia's energy security and stability.