Former Minister Khairy Jamaluddin has emphasized the necessity for legal clarity in the ongoing dispute between Petronas and the Sarawak government over gas distribution rights. He stated that without a clear legal framework, negotiations between the two parties would be ineffective, as they would be "speaking 'different languages'." Khairy supported Petronas's decision to seek judicial clarification from the Federal Court, noting that the lack of legal clarity has already affected industry stakeholders and investors in the gas sector. He expressed hope that the court's ruling would balance federal and state interests.
The dispute centers on a 2023 amendment to Sarawak's Distribution of Gas Ordinance 2016, which requires Petronas to secure gas distribution licenses for its operations in the state. This amendment conflicts with the Petroleum Development Act 1974, which grants Petronas exclusive rights to oil and gas resources nationwide. Petronas filed a motion in the Federal Court seeking clarity on the applicable regulatory framework governing its operations in Sarawak, aiming to ensure compliance with relevant laws and governance practices.
Sarawak's Attorney-General's Chambers has expressed readiness to respond to Petronas's legal application, with legal counsel JC Fong stating that they are "prepared and fully equipped to respond to legal challenges initiated by Petronas." However, Fong declined to comment on the implications of the case.
The Federal Court has scheduled a decision on Petronas's application for March 16, 2026. Both Petronas and the Sarawak government have filed applications to the Federal Court in a bid to resolve the dispute over petroleum resources in and around the state.
The outcome of this legal process is crucial, as it will determine the regulatory framework governing gas distribution in Sarawak and could have significant implications for the state's autonomy and the operations of national oil companies within its jurisdiction.