The Sarawak state government has filed a petition in the Federal Court to challenge the constitutional validity and continued applicability of three major federal laws governing Malaysia’s petroleum sector: the Petroleum Development Act 1974 (PDA), the Continental Shelf Act 1966, and the Petroleum Mining Act 1966.
In a statement, Sarawak argued that these federal laws encroach on the state’s rights over its natural resources, particularly oil and gas in the seabed of the Continental Shelf. The state cited the Malaysia Agreement 1963 and the Federal Constitution’s Ninth Schedule, which grant Sarawak legislative authority over its petroleum resources.
Sarawak contends that the Continental Shelf Act and Petroleum Mining Act were originally only applicable to Malaya and were extended to Sarawak during the post-1969 Emergency period. With the Emergency annulled in 2011, the state maintains that these laws should no longer apply as of June 2012.
The petition comes amid a related application by Petroliam Nasional Bhd (PETRONAS), filed on Jan 10, seeking the Federal Court’s clarification on the interaction between the PDA and Sarawak’s 2016 Distribution of Gas Ordinance (DGO). PETRONAS emphasized that its move is meant to ensure compliance with applicable laws and is not intended to hinder Sarawak’s development plans or the role of state-owned Petros.
Sarawak has stated it will oppose PETRONAS’ application, arguing that the company’s move falls outside the Federal Court’s original jurisdiction. The state government is therefore seeking a judicial determination on the constitutionality of the federal acts as they apply to Sarawak, asserting that the decision will clarify the regulatory framework for investors in the state’s oil and gas sector.
Despite taking legal action, Sarawak reaffirmed its openness to negotiations with the federal government, aiming for an amicable resolution that strengthens national unity and supports sustainable use of the state’s petroleum resources.
The dispute has escalated since Petros was appointed sole gas aggregator in Sarawak in 2024, despite a May 2025 joint declaration by Prime Minister Datuk Seri Anwar Ibrahim and Sarawak Premier Tan Sri Abang Johari Tun Openg recognizing both the PDA and the DGO. Other related cases remain before the courts, including Petros’ effort to recover RM7.95 million from a bank guarantee recalled by PETRONAS, with the Kuching High Court setting a decision for Feb 25.
