KUALA LUMPUR: The Sarawak government has dismissed a possible impasse in talks with Petroliam Nasional Bhd over the supervision of oil and gas trading in the state.

Sarawak premier Tan Sri Abang Johari Tun Openg said the deadline for the discussions between the state's subsidiary Petroleum Sarawak Bhd (Petros) and Petronas remains set for before Oct 1.

"Petros will collaborate with Petronas in the development of both upstream and downstream activities. That's why I say it (media) could be misinformed or wrong data or wrong input for the last two days," Bernama quoted Abang Johari as telling reporters on the sidelines of the APPEC 2024 conference in Singapore today.

"There is no issue between us and Petronas," he said, addressing reports that the talks had hit an impasse and that Petronas was considering legal actions.

"We don't know. That one (possible legal actions), you have to ask Petronas," he added.

CNA reportedly over the weekend that Petromas was contemplating legal action to defend its longstanding monopoly over Malaysia's natural resources.

The move came as the Sarawak government pushed for greater control over the trading and extraction of oil and gas within the state.

CNA, quoting anonymous sources close to the matter, said Petronas was weighing the option of filing a court injunction in the coming days.

A court injunction would temporarily halt any action Sarawak could take against Petronas, the report said.

In addition, the report quoted lawyers as saying that unless the state government decided to resume negotiations with Petronas over the control of natural resources, the dispute could escalate into a full-blown court battle.

"Sarawak has issued an ultimatum to Petronas to finalise an agreement that would give the state complete rights over the supervision over the trading of oil and gas extracted from the state by Oct 1," the report added.

Business Times has reached out to Petronas for comment.

Meanwhile, Abang Johari, as quoted by Bernama, reassured that long-term contracts on liquefied natural gas with partners like South Korea and Japan would not be affected, even as Petros becomes the sole gas aggregator in Sarawak.

"Nothing is happening. You must remember that the Sarawak government has equity in LNG, and because we have a vested interest in LNG, I don't think we want to destroy it. So the current contracts we have with our customers remain intact," he said.

He also acknowledged concerns within the industry about potential disruptions to the gas supply if Petros assumes the aggregator role, but reassured stakeholders: "This will not happen. We have interests in both upstream and downstream operations, so the supply of LNG will continue as usual."

https://www.nst.com.my/business/corporate/2024/09/1103641/petronas-petros-talks-ongoing