ConocoPhillips Exit Opens Door for Stronger Sarawak Oil Autonomy
KUCHING, May 2: The recent decision by American oil giant ConocoPhillips to withdraw from the RM13.7 billion Salam-Patawali deepwater oil and gas project off the coast of Sarawak is not a loss for the state—in fact, it may be a blessing in disguise.
Batu Kitang assemblyman Dato Lo Khere Chiang has voiced confidence that this development presents Sarawak with a golden opportunity to reinforce its grip on the state’s oil and gas industry through its very own Petroleum Sarawak Berhad (Petros).
While concerns have been raised over investor confidence, Lo pointed out that the project was still in its feasibility stage. This makes ConocoPhillips’ exit less of a financial blow and more of a strategic opening for Sarawak to reassert control over its natural wealth.
“The door is not closed. ConocoPhillips may come back—but this time on terms that are fairer to Sarawak,” Lo said in a statement.
A Call for Fairer Deals
Lo emphasised that future oil and gas deals in Sarawak should involve equal partnerships, suggesting a 50:50 joint venture model between Sarawak and international players. He believes this model will ensure Sarawak has stronger representation, decision-making power, and a greater share of the economic benefits.
He even floated the idea of Sarawak voluntarily allocating 5% of the returns to the federal government, in recognition of the symbolic share that Malaysia currently allows Sarawak under the controversial Petroleum Development Act (PDA) 1974.
“We are being more than generous,” he noted. “The resources are from Sarawak, not Malaya.”
A Push for Legal Reform
Lo reiterated Sarawak’s longstanding grievances with the PDA74, a federal law never passed by the Sarawak State Assembly. He said the law has historically short-changed Sarawak’s entitlement to its own oil and gas.
He urged reforms and pointed to Sarawak’s Oil Mining Ordinance (OMO) 1958, a state law that predates PDA74, as the legal foundation for Sarawak’s jurisdiction over its natural resources.
“Petros has every right to manage our oil fields. If PETRONAS can do it, so can we,” he said.
The Guyana Example
To strengthen his case, Lo highlighted Guyana’s successful 50:50 venture with ExxonMobil. In that deal, Guyana made no upfront investment but still secured substantial revenues via profit oil and royalties.
Lo believes this model can be replicated in Sarawak, where Petros can act as the lead negotiator for the state—without the need for PETRONAS to be involved in deals where it does not contribute operationally.
“In many joint ventures, international firms handle operations while PETRONAS only holds a stake. Why can’t Petros do the same?” he asked.
No Shortage of Interest
Lo added that Sarawak’s vast oil and gas reserves remain highly attractive to global investors, despite ConocoPhillips’ withdrawal. He stressed that Sarawak must continue offering a transparent and investor-friendly environment to attract new partners.
On April 30, ConocoPhillips clarified that its decision was purely based on internal global prioritisation and not due to local conditions. The 50-50 project with PETRONAS included a 3D seismic survey completed in 2023, but development has since ceased.
Despite this, Lo is optimistic.
“This is a chance to move forward—not backwards. Sarawak can now lead its own future in energy.”
