THE Federal Government and the Sarawak state administration have chosen a commercial approach to address disputes between national oil giant Petroliam Nasional Berhad (PETRONAS) and state-owned Petroleum Sarawak Berhad (PETROS), Deputy Prime Minister Datuk Seri Fadillah Yusof said, emphasising the importance of maintaining stability in the country’s oil and gas sector.
Speaking at the Sarawak Budget 2026 Conference Forum, Fadillah noted that pursuing legal interpretations to resolve the issues would be time-consuming, complex, and could ultimately result in losses for all parties involved.
“If we follow legal interpretations, it will take longer and the resolution becomes more complicated because we have to go through court processes and so on. In the end, it may not provide a win-win situation and could be detrimental to everyone.
“That is why we agreed for PETROS and PETRONAS to sit together and examine all areas where they can cooperate,” he said.
The Deputy Prime Minister II explained that direct negotiations allow both entities to explore collaborative opportunities that benefit not only Sarawak but also the broader national economy.
“Ultimately, it will benefit not only the country but also entrepreneurs. This win-win approach is what we have agreed upon,” Fadillah added.
He highlighted that the oil and gas sector remains a key driver of Malaysia’s economy, contributing significantly to state development through royalties, dividends, and economic spillovers.
“Maintaining stable relations between PETRONAS and PETROS is crucial to ensuring the national energy supply chain remains robust and investor confidence in Malaysia is preserved,” he said.
The government expressed confidence that strategic collaboration and negotiations between the two companies will secure the continuity of Malaysia’s oil and gas industry and reinforce the nation’s position as a reliable global energy supplier. - December 16, 2025
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