“Sabah’s longstanding role in upstream and downstream projects led earlier administrations to explore state participation vehicles — from Sabah Gas Industries to Sabah International Petroleum,” he told FMT.
“However, it is fair to acknowledge that these companies’ management had some shortcomings.”
Sabah Gas Industries had to be privatised in the 1990s due to financial difficulties.
Meanwhile, Sabah International Petroleum, established in 2010, was saddled with debt to the tune of RM1.6 billion before SMJ Energy took over in 2023 and turned the company around.
Masidi said SMJ Energy was established with the missteps of previous administrations firmly in mind.
“SMJ Energy was set up with a clear, bankable mandate, professional, merit‑based management, and no political interference,” he said, adding that the company prioritises stricter risk management, transparency and a prudent dividend‑and‑reinvestment policy.
Under current chief minister Hajiji Noor’s administration, SMJ Energy has secured meaningful commercial stakes in oil and gas projects, catalysed local content, and positioned Sabah to more directly reap benefits from its oil and gas wealth.
In a recent interview with FMT, SMJ Energy CEO Dionysia Kibat said the company had in 2024 alone contributed RM160 million in dividends to the state government and facilitated RM2 billion in contracts for Sabah’s local oil and gas service and equipment vendors.
Masidi told FMT the governance model established for SMJ Energy ensured the landmark Commercial Collaboration Agreement (CCA) entered with Petronas generated tangible results.
“The CCA succeeded because we took a pragmatic, outcome driven approach,” he said.
“We set out clear objectives — greater say, greater participation and greater revenue — then engaged Petronas and the federal government as long term partners rather than adversaries.
“SMJ Energy gave us a credible counterparty (to Petronas) at the table,” he added.
“That combination — clarity of asks, consistency in conduct, and competence — helped us turn negotiation into execution without sacrificing Sabah’s rights.”
Masidi stressed that the Hajiji administration’s priority was to deliver near-term value to its people, not get locked into long legal disputes.
“Protracted legal contests can create uncertainty for investors and delay revenue,” he said.
“By collaborating within existing national frameworks while asserting Sabah’s interests through the CCA, we accelerated tangible gains through participation, local content, and capacity building without shutting the door on future policy evolution.”
He credited SMJ’s seasoned oil and gas team for designing commercially sound and operationally feasible proposals that built trust and delivered measurable outcomes.
“This approach secured returns for Sabah, avoided unnecessary disputes and delivered quick measurable outcomes.”
Previously, analysts told FMT that Sarawak’s more assertive strategy — which included pushing for the state’s Distribution of Gas Ordinance 2016 to co-exist with federal law in the form of the Petroleum Development Act 1974 — had created regulatory uncertainty and rattled investors.
Sabah, by contrast, has seen an uptick in near-term foreign direct investment in recent months, partly due to the fact that its partnership with Petronas and the federal government appears more politically stable.