Kota Kinabalu: While a robust Petroliam Nasional Bhd (Petronas) is vital for Malaysia, the “national interest” cannot be used as a blunt instrument to demand that Borneo surrender its constitutional rights before the courts have had their say, said Parti Warisan Strategic Communications Director Christopher Masudal.
Responding to recent remarks by Datuk Zaid Ibrahim regarding Petronas and State-level resource rights, Masudal said Zaid was right on one fundamental point – Petronas must remain strong.
“Sabahans and Sarawakians have every reason to support a strong national oil and gas company that contributes to employment, investment, energy security and public revenue.
“But the slogan ‘national interest’ cannot be used as a blunt instrument to silence Borneo,” he said in a statement.
Masudal said Borneo States should not be cornered into surrendering foundational constitutional arguments before the courts had the opportunity to deliberate and decide on them.
Addressing Zaid’s stance that Sarawak must first recognise Petronas’ statutory rights under the Petroleum Development Act 1974 (PDA) before any meaningful negotiations could take place, Masudal described the approach as flawed sequencing.
“Such a precondition risks requiring Sarawak to concede the very legal questions that remain in dispute. Negotiation should not begin with a demand that one party surrender its position before the law has been fully interpreted,” he said.
While acknowledging that the PDA carried significant legal weight, including Section 2 provisions vesting petroleum rights in Petronas, Masudal maintained that this did not automatically mean every constitutional scope, State application or Borneo-specific legislative interaction had been conclusively settled.
He stressed that the Federal Constitution remained the supreme law of the land, while Warisan pointed to Article 75 concerning inconsistencies between Federal and State legislation and Article 128 outlining the Federal Court’s jurisdiction over constitutional disputes.
According to Masudal, these complex questions of legislative competence and statutory scope must be resolved through due judicial process rather than unilateral political assertions.
He said both Petronas and Sarawak were entitled to seek judicial clarification and all stakeholders must ultimately abide by the eventual rulings of the courts.
Masudal also referenced the May 2025 Joint Declaration as a vital precedent, saying it successfully acknowledged Petronas’ ongoing functions alongside State-backed Petroleum Sarawak Bhd (Petros), which operates as Sarawak’s designated gas aggregator.
He said the coexistence framework protected third-party liquefied natural gas (LNG) arrangements while demonstrating that recognising regional entities did not equate to dismantling the national oil corporation.
Warisan also urged caution regarding headline financial claims, such as Zaid’s reference to an RM10 billion figure.
Masudal called for greater precision, questioning whether the calculation represented gross sales, trading values, net earnings or tax revenues, noting that a broad headline figure did not by itself demonstrate an actual financial loss to Petronas or the wider economy.
Addressing regional legal hurdles, including the recent Shell MDS dispute, Masudal said the episode underscored commercial risks under transitional arrangements, while subsequent appellate rulings reinforced the need for clear legal structures rather than proving that Petros had entirely displaced Petronas.
Dismissing suggestions that developments in Sarawak would trigger chaotic friction across all oil-producing States, Masudal said Sabah and Sarawak possessed distinct constitutional, historical and legislative frameworks as the unique Borneo States.
He pointed to Sabah’s assumption of regulatory responsibilities over onshore gas supply through the Energy Commission of Sabah (ECoS) following a Federal handover, saying State participation and Federal bodies could cooperate successfully when their respective boundaries were clearly outlined.
“A federation is strengthened when its institutions operate with legal clarity, commercial certainty, local legitimacy and fair participation,” he said, adding that Petronas did not necessarily become weaker when Sabah and Sarawak sought meaningful roles in resource development.
He said the way forward relied on protecting national energy security, honouring contractual obligations, respecting future judicial outcomes and ensuring Sabah and Sarawak secured a fair return from their local natural resources.
“Petronas is a national company, but the word ‘national’ cannot mean Peninsular Malaysia alone. Malaysia’s energy future must rest on a durable constitutional settlement, not an ultimatum requiring Borneo to concede its position before the law has spoken.”“The public deserves a transparent assessment of the actual economic and fiscal implications, including Petronas’ earnings, Federal dividends, Sarawak’s revenue, industrial development, employment and domestic energy requirements.
“Economic activity and value retained in Sarawak remain part of Malaysia’s economy. Federal revenue is important, but it should not be used to dismiss the legitimate interests of Sabah and Sarawak in the development of resources extracted from their territories,” he said.
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