KUALA LUMPUR (June 26): A Sarawak State Assistant Minister said today that only the Sarawak State government can repeal the Oil Mining Ordinance (OMO) 1958 because it was passed by its State Legislative Assembly.
As such, national oil company Petroliam Nasional Bhd (Petronas) is bound by the OMO, said Sarawak State government’s Assistant Minister for Law, state-federal relations and project monitoring Sharifah Hasidah Sayeed Aman Ghazali in her Facebook post today.
“[The OMO] is a valid law and will remain valid unless repealed by our State Legislative Assembly,” said Sharifah.
To recap, Petronas failed in its motion seeking leave for a declaration from the Federal Court that the formation of PDA 1974 implied that the OMO was repealed.
It also filed an application for leave to commence proceedings under Article 4 (4) of the Federal Constitution, seeking a declaration that the PDA 1974 applied with regard to the regulatory control of upstream activities in Sarawak.
In an earlier statement, Petronas said that the application was declined solely based on technical grounds and that the matter falls outside of the Federal Court’s jurisdiction.
“The Federal Court did not in any way determine or endorse the merits of the legal position taken by the Government of Sarawak to regulate upstream petroleum activity under its OMO 1958," said Petronas.
Sharifah however disagreed, noting that since the motion has been dismissed, the Sarawak State government can enforce the OMO against Petronas, pointing to how the State government can gain revenues from licences, leases or permits imposed on all players including Petronas.
The provisions under the OMO “are not inconsistent with the Petroleum Development Act (PDA) 1974”, she said.
“Section 3 of OMO makes it an offence for any person who is found to be exploring, prospecting or mining petroleum or natural gas upon any land in Sarawak without any lawful authority to do so under any provisions of the OMO.
“Section 4 of OMO sets out types of licences or lease that a person may apply,” she said, adding that therefore Petronas is bound by the OMO and has to comply with the provisions in carrying out any oil and gas (O&G) exploration, prospecting and mining activities both on- and offshore Sarawak.
“Also by virtue of our Sarawak Land Code, State Land is defined to include the bed of any river, stream, lake or watercourse and also the foreshore and beds of the sea within the boundaries of Sarawak,” Sharifah added.
That, she said, means that any person occupying Sarawak State land for upstream activities is “required to have the authority under the Land Code” or by a license issued under OMO.
“The State Government has decided to enforce our laws to the full extent,” Sharifah added. “Petronas can still bring the matter to the High Court, but let us be mindful that no laws can be declared so simply as invalid. If I were Petronas, I would not do that.”
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