Sarawak, Malaysia’s largest state, is making strides towards economic autonomy by taking control of its natural gas assets from federal government-run companies. The state’s oil firm, Petroleum Sarawak Bhd., recently signed gas sale agreements, marking the beginning of the takeover process from Malaysian oil giant Petroliam Nasional Bhd.
Petronas, controlled by the prime minister, is seeking more time to finalize gas supply agreements with Sarawak to maintain its LNG complex operations. The state has long demanded higher royalties but began its autonomy push after the 2022 elections.
The negotiation deadline is set for October 1 to avoid disrupting the industry. Sarawak’s energy sector value is predicted to exceed US$13 billion by the decade’s end. The state aims to become the owner-operator of the LNG port and plans to build hydrogen plants.
Sarawak’s potential takeover signifies a return to its agreement for self-governance and resource management upon joining Malaysia in 1963. With Abang Johari at the helm, the state is leveraging its influence in national politics, pushing for fair representation and strategic investments like acquiring a national bank stake and regional airline.