Analysts believe that the oil and gas conflict is unlikely to damage Kuching-Putrajaya ties

Analysts predict that Gabungan Parti Sarawak (GPS) will maintain its relationship with the unity government, despite the ongoing dispute over Sarawak’s oil and gas rights.

GPS assemblyman Hamzah Brahim said that the unity government could “potentially fall,” but Awang Azman Pawi from Universiti Malaya told me that this was just a “populist statement.”

James Chin from the University of Tasmania believes that Hamzah’s coworkers in the GPS are unlikely to agree with him.

Last November 14, Hamzah said that Petronas was acting in a “push-and-pull” way when it came to finalizing a gas distribution deal that would make Petroleum Sarawak Bhd (Petros) the only gas distributor in the state.

He told Putrajaya not to let Petronas’s “pride and greed” lead to the “potential downfall” of the Madani government.

Awang Azman said that talks are currently going on between people from Sarawak, Petronas, and the central government.

“A professional official representative would not call other people names like ‘proud’ and ‘greedy,'” he told FMT.

Although Sarawak’s desire to safeguard its oil and gas rights by adhering to its Oil and Mining Ordinance (OMO) 1958 and challenging federal laws makes sense, he asserted that the state would not wish to jeopardize its relationship with Prime Minister Anwar Ibrahim.

“GPS has always been practical, and it is using its power in federal politics to look out for Sarawak’s best interests,” he said.

Petronas owns all of the oil and gas in the country because of the Petroleum Development Act 1974. Sarawak has recently sought more control over Petros’ resources within its borders and on the continental sea.

Sarawak said in July that it wanted Petros to buy and sell gas in the state. The state gave Petronas three months to resolve all its issues related to gas distribution with the state-owned oil company.

Abang Johari Openg, the premier of Sarawak, declared on October 31 that they had resolved the disagreement and that Petronas had theoretically agreed to become Sarawak’s sole gas supplier. But Petronas said this wasn’t true and that talks were still going on.

Chin said that Abang Johari would have to talk to Anwar if Petronas couldn’t solve the problem. This is because Petronas works directly for the prime minister.

He told FMT that if the case goes to court, Sarawak’s OMO would protect its rights to those resources, which would mean Petronas would lose.

He also said, “That gives Sarawak the power to negotiate with Petronas.”

According to Jayum Jawan of Universiti Malaysia Sarawak, GPS is not likely to leave the unity government even if Petronas doesn’t move. This is because the two groups have ties to each other in the past.

In his speech, he stated that since 1963, the Sarawak government has collaborated with the federal government, and its federal officials have never held opposing views.

“The leaders would have a hard time cutting ties with the federal government now,” he told FMT.