Sarawak, Petronas at loggerheads over which oil rights case goes first

PUTRAJAYA: The Sarawak government and Petroliam Nasional Bhd (Petronas) want their respective petitions over the state's oil and gas rights to be heard separately by the Federal Court, but disagree on which should be heard first.

The matter came up for case management today before Federal Court judge Datuk Rhodzariah Bujang, who tentatively fixed the hearing for one week from Jan 25 next year.

Rhodzariah fixed Oct 1 for further case management to determine the hearing sequence and other preliminary issues.

Earlier, lawyer Datuk Dr Cyrus Das, representing Petronas, said the parties had narrowed the issues to about 10 or 11 and that the petitions had not been consolidated.

Das said Petronas wanted its petition heard first as it was filed earlier.

"The petition was filed on Jan 10 this year, and leave was granted by the Federal Court on March 16. The company felt that its petition should be decided first," he said.

The Sarawak government filed its petition on Feb 23.

Petronas had earlier sought for both petitions to be heard separately, while Sarawak, which initially had no objection to the matters being heard together, now also wants separate hearings.

However, senior state counsel Mohd Adzrul Adzlan told the court that Sarawak wanted its petition heard first.

The state also wants the apex court to first determine a preliminary issue concerning the validity of the colonial-era Order in Council 1954 relating to the boundaries of Sarawak and Sabah.

Petronas is understood to oppose the preliminary issue.

Rhodzariah said the substantive hearing was still some time away and the parties could continue discussions on the outstanding issues.

Petronas' petition concerns the applicability and validity of several Sarawak laws governing its petroleum operations, including the Environment (Reduction of Greenhouse Gas Emission) Ordinance 2023 and the Sarawak Oil Mining Ordinance 1958.

Sarawak's petition, meanwhile, challenges three federal laws — the Petroleum Development Act 1974, Continental Shelf Act 1966 and Petroleum Mining Act 1966.

Petronas obtained leave from the Federal Court on March 16 to commence proceedings against the Sarawak government under Articles 4(3), 4(4) and 128(1) of the Federal Constitution.

Chief Judge of Malaya Datuk Seri Hashim Hamzah, in granting leave, ruled that Petronas had shown there were arguable issues to be determined by the apex court.

Petronas is challenging the Sarawak legislature's competence to enact laws relating to matters it claims fall under the Federal List in the Ninth Schedule of the Federal Constitution.

The Sarawak government maintains that it has not encroached on federal legislative powers.

In Petronas' petition, the Sarawak and federal governments are named as respondents, while Sarawak's petition names Petronas and the federal government as respondents.

Senior federal counsel Ahmad Hanir Hambaly @ Arwi and federal counsel Imtiyaz Wizni Aufa Othman represented the federal government.