Its president Brenndon Soh said the society was prepared to form a special committee of lawyers who are familiar with the legal issues involved to further strengthen Sabah’s position in the matter.
“The society is concerned with Petronas’ challenge towards the Sarawak state government’s claim to regulatory authority in the upstream oil and gas sector,” he said.
“I understand that one of the central issues is whether the extraction of petroleum resources requires mining leases from the Sarawak government,” he told FMT.
The legal action was in response to Sarawak’s recent announcement that all companies operating in the upstream oil and gas sector in the state must obtain additional licences and leases from the state government in accordance with the Sarawak Oil Mining Ordinance 1958.
Soh said Petronas was relying on the Petroleum Development Act 1974 (PDA) which states that it is the exclusive regulatory authority of the sector throughout Malaysia.
He said since Sabah was a major producer of the nation’s oil, any interpretation of the PDA by the judiciary will be a binding precedent and could have far-reaching consequences for the state.
“The court will likely canvas issues such as the legality of the intention of the state to issue mining permits and licences, provisions of the Federal Constitution in relation to royalty from petroleum and may also include the validity of the Territorial Sea Act 2012 which purports to limit the territorial sea of Sabah to three nautical miles, among others,” he said.
However, Soh said the society will wait for the Sabah attorney general’s move on the matter.
On Monday, it was reported that Petronas had filed for a court application to declare its exclusive ownership of the country’s petroleum resources.
The Sarawak government had in March asserted its rights in relation to petroleum resources and was supposed to assume full regulatory authority on upstream and downstream activities in July.
The state government had formed its own local oil and gas company, Petroleum Sarawak Bhd (Petros), for this purpose.
The oil and gas rights of Sabah and Sarawak have been a key issue for politicians on both sides of the divide, especially in recent years.
There have been increasing calls for the two states to enjoy greater rights over their petroleum resources in line with the Malaysia Agreement 1963
Petronas seeks court declaration on ownership of petroleum resources