Sabah assured of role in state oil and gas projects – Masidi
KOTA KINABALU (July 8): Sabah will not be left out of participation in its growing oil and gas (OnG) industry, assured State Finance Minister Datuk Seri Masidi Manjun.
Masidi told the State Assembly here Tuesday, in response to an additional question by Senallang assemblyman Datuk Seri Shafie Apdal who queried why a West Malaysian-based company was awarded by Petroliam Nasional Berhad (Petronas) a Small Field Asset Production Sharing Contract (SFA PSC) for the Mutiara Cluster offshore exploration project near Sandakan.
Shafie had questioned the state's firmness on policies to safeguard its natural resources such as OnG, wondering why SMJ Energy (SMJE) or Sabah International Petroleum (SIP) did not directly discuss with the parties as he rued Sabah's miniscule five percent royalty on oil in the state while Petronas has had control of the remaining 95 percent over the decades.
In response, Masidi explained that oil exploration costs lots of money, and the Mutiara Cluster project itself involves a lot of capital expenditure which the state does not have, even though the project is just a preliminary exploration stage and is not actually producing any oil yet.
He said SIP and SMJE also do not have the expertise to be eligible for the international bidding, urging for practicality as they are not able to get involved in everything with their current capabilities, while clarifying that bidding for oil exploration and smaller contract works are very different.
'Having said that, this does not mean that we do not have any involvement at all. Insyallah, Petronas or SMJE will make an announcement later on.
'Trust me, SMJE has a scope of participation in Sabah's oil exploration or industry, so don't say that we are giving everything away to others,' he said.
The minister also dashed comparisons between Sabah's progress in the field to Sarawak's, saying that the neighbouring state is over a hundred years ahead of Sabah because that was when oil was discovered in the state, while Sabah is still in its infancy.
Shafie then pointed out that it is not about comparing Sabah and Sarawak, but Sabah must have firmness and clear-cut policies when it comes to its resources and raw materials to benefit its downstream sector, like Sarawak has been doing.
Masidi, who is also Karanaan assemblyman, replied that his opinion is that nothing has been given to Sarawak which Sabah did not and will not get so far, and that Sabah's policy on its natural resources including OnG is very, very easy.
'That is why we signed a Commercial Collaboration Agreement with Petronas – we have our rights and a committee to determine how far is our involvement in the oil sector in Sabah.
'This is what we have been doing. The difference is, we do our work silently and show results. Some just talk without anything to show for.
'Trust me YB. We were both civil cervants, but I also know a bit about oil even though I am new to the industry,' he said.
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