Sabah and Sarawak have equal legal standing to assert control over petroleum and gas found in the seabed and subsoil of their respective continental shelves, said Sarawak legal counsel and a Sabah minister.
According to Sarawak’s legal counsel Dato Sri JC Fong and Sabah Deputy Chief Minister I Datuk Seri Panglima Dr Jeffrey Kitingan, the rights of the two Borneo states were established before Malaysia’s formation and remain protected under constitutional and legal provisions.
Speaking at a forum titled Fifty Shades of Federalism at the Subang National Golf Club on February 15, Fong said Sarawak retained ownership of its petroleum and gas resources when Malaysia was formed.
He cited MA63 and the Sarawak Constitution, which ensured that land and resources previously vested in the British Crown were transferred to Sarawak, not the federal government.
“The petroleum found in the seabed and subsoil of Sarawak, which was Crown land, was never vested by the British in the federal government,” he was reported as saying in the Dayak Daily.
He explained that under Article VIII of MA63, the Borneo States (Legislative Powers) Order 1963 granted both Sarawak and Sabah authority over electricity and gas distribution.
Sarawak’s Oil Mining Ordinance (OMO), which predates Malaysia’s formation, remains the governing law for oil mining in the state, he added.
“On Malaysia Day, when the amended Federal Constitution came into force, legislative and executive powers over prospecting licences, mining leases, and mining certificates for minerals on land were placed under the State List,” Fong said.
Kitingan, in a statement issued on Monday night, insisted that Sabah’s rights over petroleum and gas resources mirror those of Sarawak and must be upheld.
He said Sabah, like Sarawak, owns its continental shelf and all petroleum and gas resources within it, citing the 1954 Orders in Council, which extended both states’ boundaries to their respective continental shelves.
“These boundaries were recognised before Malaysia’s formation and later enshrined in Article 1(3) of the Federal Constitution,” he said.
He pointed to Section 24 of the Sabah Land Ordinance, which reserves petroleum and gas for the state government, similar to Sarawak’s legal provisions.
He noted that in 1969, then-Chief Minister Tun Mustapha signed six oil exploration and production agreements with international oil firms, securing a 12.5% royalty for Sabah, reinforcing the state’s authority over its resources.
However, this changed in 1976 when Sabah signed an agreement with Petronas, reducing its share to a 5% cash payment, a shift that also affected Sarawak’s revenue.
In 2018, under then-Chief Minister Shafie Apdal, the Sabah legislative assembly amended the Sabah Land Ordinance to extend its jurisdiction over its continental shelf.
The amendment, aligning with changes to the Mining Ordinance 1960, reinforced Sabah’s control over petroleum and gas resources, mirroring Sarawak’s legal framework.
Despite these provisions, Kitingan highlighted the financial disparity, stating that Sabah received only RM20 million for its 5% share, while Petronas and the federal government took RM380 million, representing 95% of the revenue.
“As our rights over petroleum and gas resources mirror those of Sarawak, we ought to receive equivalent benefits from Petronas—nothing more, nothing less,” he said.
Both Fong and Kitingan stressed that Sabah and Sarawak have the same constitutional and legal foundations for asserting their rights, and any concessions granted to Sarawak should also apply to Sabah. – February 17, 2025.
