Let the battle for legal clarity and constitutionality take its course — Hafiz Hassan

In 2024, Petronas, Malaysia's national oil and gas company, celebrated its 50th anniversary. The Petroleum Development Act 1974 (PDA) marked a significant milestone in the country's petroleum sector, with the Federal Government consulting with State Governments, especially Sarawak and Sabah, to ensure national interest was upheld. The PDA was heralded as "historic" by the then-Minister of Primary Industries Abdul Taib bin Mahmud, who expressed gratitude to both states for their cooperation.

Abdul Rahman bin Ya'kub, a prominent Sarawakian and the first to support the legislation in Parliament, argued that it was crucial for the government to prioritize the exploration and exploitation of petroleum for the country's benefit. The company recorded 19 exploration discoveries in 2023, with more than half of the discoveries made in the Sarawak basin. In that year, the company's total capital investments (Capex) amounted to RM52.8 billion, with more than 60 per cent of it invested directly into Malaysian projects.

Despite the progress, uncertainties surrounding Petronas' obligations in Sarawak led to a legal battle between the company and the Federal Government, as well as the State Government of Sarawak, seeking clarity on the applicable regulatory framework. The Sarawak Government has filed its own petition at the Federal Court to challenge three federal laws – the Petroleum Development Act 1974, the Continental Shelf Act 1966, and the Petroleum Mining Act 1966 – which they claim adversely affect the rights of Sarawak and its people to the natural resources found in the seabed within the country's boundaries.

The legal battle is expected to commence in January 2027, with both parties preparing to present their arguments before the Federal Court.