S’wak’s ‘rights’ claim no licence to weaken Petronas, Zaid tells Lau

Sarawak is entitled to pursue its constitutional claims, but this does not give it the right to alter Malaysia’s energy system to the detriment of Petronas, said former law minister Zaid Ibrahim.

Zaid said the central issue in the ongoing dispute between Petronas and Petroleum Sarawak Bhd (Petros) was whether any political settlement would preserve Petronas’s ability to fulfil its national role and safeguard the nation’s energy security.

“A claim to rights does not automatically give any party licence to alter the operating structure of Malaysia’s energy system in a way that weakens Petronas’s integrated model,” he told FMT.

Zaid was responding after Sarawak senator Robert Lau rejected comparisons between the Petronas–Petros dispute and the Tabung Haji controversy.

Lau said Sarawak’s claim centred on federal–state relations, grounded in the Malaysia Agreement 1963, the Federal Constitution, and the division of powers between the federal and state governments over petroleum resources.

He was rebutting comments by governance specialist Walter Sandosam, carried by Malay Mail, which warned that a settlement between Petronas and Petros could face future accountability concerns if it represented a political compromise rather than one made in the national interest.

Citing the experiences of TH and Felda, Sandosam said decision-makers must be mindful that a change in the political climate may see decisions revisited in the name of governance and oversight.

Zaid agreed that the Petronas-Petros dispute cannot be conflated with the TH controversy.

“Lau is right that the Petronas-Petros dispute is not the same as the TH scandal. There is no allegation that Sarawak’s claim is rooted in corruption or mismanagement.

“But that was never the point of the warning,” he added.

He said the gas aggregator issue had consequences beyond symbolism or political positioning.

“It goes to who controls commercial arrangements, customers, supply and the ability to plan long-term investments,” he said.

“One may dispute ownership or control of a power station; that does not mean one can reorganise the national grid while the dispute is still unresolved.”

Zaid said Petronas’s integrated operations supported investment, supply reliability and Malaysia’s broader energy security, and should not be viewed simply as a federal business model.

“Any new arrangement must therefore be tested against its operational and commercial consequences, not only its political appeal,” he said.

Zaid also said Sarawak’s claim that it was merely asserting its “rights” remained legally disputed.

“MA63, the Federal Constitution, the Petroleum Development Act 1974 (PDA) and the relevant state laws require legal interpretation. A constitutional claim is not the same thing as a settled constitutional entitlement,” he said.

Responding to Lau’s claim that Section 3 of the PDA allowed room for a political solution, Zaid said there was nothing improper about negotiations but cautioned against treating the provision as a free pass for concessions.

“Section 3 of the PDA may provide room for directions and a political solution. But that is not a blank cheque to make concessions without answering the central question: does the arrangement preserve Petronas’s capacity to safeguard Malaysia’s energy security and national interest?”

He said the comparison with TH did not rest on treating the two disputes as identical.

“Decisions involving public institutions can later be judged by their consequences, not merely by the political circumstances in which they were made,” he said.

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