Win-win for Petronas, Petros must pass commercial test

An analyst from Global Asia Consulting has criticized a Petronas-Petros settlement, arguing it cannot be considered a win-win if commercial consequences are ignored. Sarawak senator Datuk Ahmad Ibrahim claimed commercial considerations should not override Sarawak's constitutional rights, responding to former law minister Datuk Zaid Ibrahim, who warned that Petronas could lose billions if Petros gains more power in Sarawak's gas sector.

The May 2025 Joint Declaration between the federal and Sarawak governments recognized Petros as Sarawak's gas aggregator while preserving Petronas' existing role and responsibilities under the 1974 Petroleum Development Act. This arrangement was described as a win-win by Abang Johari Openg, Sarawak Premier. Analyst Samirul Ariff Othman argues that this balance makes it difficult to claim that commercial considerations are irrelevant to the arrangement.

He emphasizes that the May declaration was not just an acknowledgement of Petros' role, but a balance that preserved Petronas' existing business and responsibilities. Samirul points out that the court has not yet settled the legal rights involved, stating that if Sarawak has a legal right, it does not disappear because another party will bear commercial costs.

The Federal Court will hear the case in January 2027, and Samirul advises all parties to allow the court to decide what the law requires. He suggests a possible commercial model where Sarawak takes a larger role in returns, investments, risks, and rewards, sharing gains and risks rather than treating them as mutually exclusive. This approach would require Petronas to retain sufficient commercial authority and economic return to maintain its wider responsibilities.

The ongoing dispute should not be viewed as a choice between a stronger Sarawak petroleum industry and a strong Petronas, but rather as a means to align control, capital, risk, and returns.