After years of haggling, the negotiations between national oil producer and Sarawak State has come to an amicable resolve with Petronas agreeing to a larger portion of revenue for oil and gas extracted from the state.
Sarawak State Government issued a statement announcing the conclusion of the negotiations which was facilitated by the Ministry of Finance whereby on a commercial settlement has been derived after having resolved their differences over the imposition of State Sales Tax on petroleum products as well as oil and gas matters.
The commercial settlement agreement (Agreement), which was executed on 7 December 2020, was witnessed by both the Prime Minister and the Chief Minister of Sarawak, provides the State with a greater share of revenues from oil and gas found and produced in the State. It also provides for a more active involvement by the State in the oil and gas industry through the management of onshore oil and gas resources by PETROS and investment by PETROS in the upstream ventures in offshore areas.
Both the Sarawak State Government and PETRONAS, have agreed to remain committed to working together to create and maintain a stable, conducive business and investment environment for the sustainable growth of the oil and gas industry, both upstream and downstream.