“Maybe Sarawak mistakenly believes it can do the oil and gas business all by itself. No, it can’t.
“It will have to subcontract to big players, like Shell or Exxon, effectively putting the security of its resources in foreign hands,” he said in an X posting today.
Zaid was commenting after Parti Bumi Kenyalang (PBK) president Voon Lee Shan called for Sarawak to end its collaboration with Petronas, arguing that the state should not recognise the Petroleum Development Act 1974 (PDA).
Zaid said the current dispute was being driven by Sarawak’s ambitions for autonomy.
He warned that the state’s actions could have wider economic implications, as Petronas contributes a significant portion to the annual federal budget. In contrast, he said Norway’s oil firm contributes only 3% annually to its government’s expenses.
Speaking later on his podcast, Zaid said the federal government was unlikely to back down in the stand-off as a “viable” Petronas was key to the country’s stability.
On Tuesday, the national oil company announced a sharp 32% decline in net profits for 2024, reporting profit after tax of RM55.1 billion, down from RM80.7 billion in the preceding financial year.
Despite this, Petronas paid the government a RM34 billion dividend last year, said Zaid.
“Only a viable Petronas can provide the dividend of RM32 billion promised for next year’s budget,” he said.
“Petronas’ profit isn’t that high, so how is it supposed to survive if Sarawak keeps demanding more? We must protect Petronas—this is about our national security.”
PDA not enacted under emergency rule
Umno veteran Tengku Razaleigh Hamzah, who was instrumental in the enactment of the PDA and setting up Petronas, previously dismissed Sarawak’s contention that the legislation was no longer applicable as it was passed under emergency rule.
“There’s no emergency as far as we are concerned. Nothing, never. We never even took notice that there was an emergency,” he said.
Tengku Razaleigh said the PDA was meant to “bring everybody together” under a single entity.
He said Sarawakian leaders of that era had given their full backing to the decision, including Rahman Ya’kub, who first mooted the idea in his capacity as the land and natural resources minister.
“He (Rahman) was always saying, don’t allow those contractors to come and ‘laga-laga’ (pick fights) with us. If you have one (entity) with central authority, then they cannot shake us.”
Tengku Razaleigh also dismissed claims that Sarawak’s Oil Mining Ordinance 1958 (OMO) supersedes the PDA, arguing instead that the PDA was intended to override the state legislation.
“Oil and gas should be under the care of Petronas. That’s what the law says. That’s what the vesting deed says. Must you chop and change?”
RM100 billion loss claim baseless
In his remarks, Voon had claimed that Sarawak loses RM100 billion each year from Petronas’s oil extractions, premised on the assumption that oil and gas resources on the continental shelf belong to the state.
However, legal expert Liew Teck Huat previously told FMT that the continental shelf lies beyond state waters and is governed by the United Nations Convention on the Law of the Sea (Unclos), which Malaysia has ratified.
“The 200-nautical mile Exclusive Economic Zone does not belong to any single state but to the entire country,” he said, adding that Sarawak’s claim over offshore resources has no legal basis.