CM says state-owned company to start exploration as well as extraction of O&G from within the state waters early next year

KUCHING: The state-owned oil and gas (O&G) company is expected to commence operations early next year.

According to Chief Minister Datuk Amar Abang Johari Tun Openg, ‘Petroleum Sarawak’ – or Petros – is going to be ‘100 per cent owned’ by the state government, which would then work together with national petroleum company Petronas.

“Hopefully, the name (Petroleum Sarawak) is OK – nobody will be using that name, Petros.

“The company is expected to be in operations within six month because we must get our side ready for us to get involved in the upstream oil and gas activities,” he told reporters after the launch of Board of Engineers Malaysia (BEM) roadshow here yesterday.

Abang Johari, who is also in-charge of Sarawak O&G, said at the moment the state does not have its own company that solely looks after upstream operations.

He said Sarawak already has equities in companies that look after the downstream activities such as the Liquefied Natural Gas (LNG), Asia Fertilizer and Shell Middle Distillate Synthesis (Shell MDS).

However, he stressed that now Sarawak is going for upstream – the exploration as well as extraction of O&G from within the state waters.

Moreover, he assured all that the company would primarily employ Sarawakians.

Adding on, he said because the people wanted the state to participate in O&G, it was necessary to have a very holistic approach to this.

“We need the expertise; thus, our approach must be correct – the one I’m taking is our own state-owned company, which will work together with Petronas.

“Petronas has the expertise, and we also have our own experts and engineers who are working in Petronas, Shell and other O&G companies.

“So these are the kind of organisations and people that we need so that we can go upstream together. By doing so, we are also creating job opportunities for Sarawakians,” he said.

Abang Johari said Petros would adopt a normal business model based on equities, adding that the government would not take all of it as Sarawak is not a socialist state, or country.

He pointed out that although the company might be 100-per cent owned by the state government, it would still have to work with other partners to explore and extract O&G.

“For example, say we discover oil on Marudi land – the oil would be ours but together with Petronas, we would extract the oil from there because they (Petronas) have the technology at the moment.

“If it’s shallow (digging), the cost would be cheaper (but) if it’s in the deep sea, the cost would be higher. The average now is about US$22–US$24 per barrel, in terms of cost.

“If we got O&G reserve on land, the cost would be cheaper and if the price is US$50 per barrel, we would still get some margins based on our equity and that would be the revenue to the state,” he said.