Expressing shock over Shell’s move, the Penampang MP described it as “a big loss to the state’s oil and gas industry” if the company were to eventually ship out from Sabah.
He said the multinational company had recently invested in the second phase of the Malikai deepwater development, which is operated by Shell, involving two additional oil producing wells and four water injection wells, with production expected to start in the second quarter next year.
“Such investment would have necessitated the expansion of the company’s existing offices in Sabah. But what happened is the other way around — the closure of offices,” he said in a statement today.
Leiking, who is also Moyog assemblyman, was reacting to FMT’s report that Shell was trimming its operations in Sabah and moving staff to Miri.
Shell Malaysia had said that it would reduce its office footprint in Kota Kinabalu but that the company would continue to be committed to its upstream deepwater and downstream operations as they contribute to the development of communities in Sabah.
On the move to Miri, Leiking said the historical status of the Sarawakian city as Shell’s first oil production district, both in the country and Sarawak, does not validate the company’s decision to move staff there.
“A few days ago, a news daily (in Sarawak) had reported that Shell is planning to set up a new office in Miri that will provide about 1,000 jobs and bring about massive economic growth in that district.
“While Miri may have enjoyed the historical status as the first district in Malaysia where Shell set up its office in 1910, it is now 2020 and Shell is currently enjoying oil that is coming from Gumusut-Kakap and Malikai, both of which are in Sabah,” he said.
As such, Leiking said there was no reason to set up a new office in Miri just because of historical sentiments.
“We must protect the state’s oil and gas industry by engaging with that oil company and telling them that while we welcome them to do their business here, what has been taken out from Sabah must be processed in our state,” he said.
Leiking said though the state is currently the second largest oil producer in the country, after Sarawak, Sabah still has unexplored reserves.
These should have been taken into account by any foreign investor if they wished to commit to the development of the industry in the state.
“As a matter of principle, foreign investors should have understood it that while Sarawak and Sabah both formed the Federation of Malaysia, any activity to utilise our state’s natural resources for profit should be compensated by developing Sabah through the creation of jobs and economic spillover.”
Towards this end, he urged the Sabah Cabinet to ensure that the state’s territorial rights are safeguarded.
Yesterday Sabah Deputy Chief Ministers Bung Moktar Radin and Joachim Gunsalam expressed unhappiness over Shell’s move, stating the company’s exit plan was not communicated to the state government.