US oil firm exit in RM13.7b project can give S'wak better control, says rep

Summary

• Batu Kitang state assemblyperson Lo Khere Chiang says Sarawak will benefit from the exit of an American oil firm from a RM13.7 billion offshore gas project with Petronas.

• He says ConocoPhillips can re-engage Sarawak on the state’s terms, or other investors can replace the company.

• Lo quips the federal government might be given ‘five percent’ under new conditions.

The withdrawal of US oil company ConocoPhillips from a major deepwater oil and gas project off Sarawak will open the state to better options, according to Batu Kitang assemblyperson Lo Khere Chiang.

Lo (above) reportedly said ConocoPhillips' exit should not be seen as a setback but an opportunity for Sarawak to take greater control of its economic future.

He added that the US firm could exit the project because it was still in the feasibility stage.

“This is precisely why ConocoPhillips is able to exit the venture with Petronas at this point. However, the door to future investment in Sarawak is not closed.

“It could very well remain open for ConocoPhillips to re-engage, this time with Sarawak represented by Petros and on terms that are fairer for Sarawak,” he said in a statement, as quoted by The Borneo Post.

Lo added that if the American firm remains uninterested, other investors will replace it as Sarawak maintains an open and fair investment environment.

Uncertainty over Petronas, S’wak dispute

ConocoPhillips had quietly exited its joint venture with Petronas on the Salam-Patawali oil field - an RM13.7 billion (US$3.13 billion) project discovered in 2018, according to a report by Upstream Online on April 15. CNA later also confirmed the matter with two industry sources.

Industry players hinted the decision was driven by regulatory uncertainty stemming from tensions between Petronas and the Sarawak administration under Premier Abang Johari Openg, which is pushing for greater control over the state’s oil and gas resources through state firm Petroleum Sarawak Berhad (Petros).

Adding further, Lo, from the Sarawak United Peoples’ Party (SUPP), suggested that any future venture should take the form of 50:50 profit sharing with the state.

The federal government, he said, might be allocated “five percent”, referring to the percentage in cash payment that Putrajaya had been paying Sarawak from the state’s oil and gas revenue under the Petroleum Development Act (PDA) 1974.

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