Malaysia's Petronas agrees to grant larger revenue share to Sarawak state

KUALA LUMPUR  - Malaysia's energy giant Petronas said on Monday (Dec 7) it had agreed to a commercial settlement that grants Sarawak state a higher revenue share of oil and gas produced in the state.

Under the agreement, Sarawak state will also be given more active involvement in the state's oil and gas industry through management of onshore oil and gas resources, through its state-owned energy firm Petros, according to a joint statement by Petronas and the state government.

Both Petronas and the state government said they remained committed to providing a "stable, conducive business and investment environment for the sustainable growth of the oil and gas industry" in the state. 

In September, Petronas paid over US$700 million (S$934.8 million) in sales tax to Sarawak, months after both parties agreed to an out-of-court settlement to a legal challenge by the state for a higher sales tax payout. 

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The deal led to the resignation of Petronas chief executive Wan Zulkiflee Wan Ariffin, who quit after a disagreement with Prime Minister Muhyiddin Yassin over giving more oil money to Sarawak state, according to sources.  

Sarawak is governed by a key political ally of Tan Sri Muhyiddin, who has grappled with a razor-thin parliamentary majority since taking power in March.