Petronas allots $ 780 million in contracts to Sarawak-based contractors

KUCHING - Petronas will allocate RM2.1bil (S$0.78bil) of its oil and gas contracts exclusively to Sarawak-based contractors annually.

State Assistant Communication Minister Datuk Lee Kim Shin said the decision was one of several reached in the on-going negotiation for more oil royalties between Sarawak, the Federal Government and the national oil company.

Lee called it a boon for the state economy and attributed it to Chief Minister Tan Sri Adenan Satem for taking a firm stand on the "poor deal" the state had been getting for decades.

"He put up a very strong petition to Petronas to give more royalty or other benefits to Sarawak. Also Petronas will give more shares of subsidiary companies which will benefit Sarawak. We hope Petronas will from now on give more recognition to Sarawak," Lee said here on Thursday.

He said all this while, it has always been Sarawakian companies doing all the jobs, but unfortunately, there were just sub-contractors.

"The main contractors always come from outside when most of our companies have been in the oil and gas industry for more than 100 years. We have the most experience," he said.

Lee said recently a local company was left nearly bankrupt because a main contractor from the peninsula did not pay for the works done.

"We brought the matter to Petronas, and the main contractor was terminated," he told reporters at the Chinese New Year open house hosted by Sarawak United People's Party (SUPP).

SUPP secretary general Datuk Sebastian Ting hailed the deal as a landmark, saying this was the first time that Petronas has really taken notice of Sarawak.

"For the first time, we know for certain the amounts of contracts that will be given to Sarawak-based companies," Ting said.

In January, the Chief Minister said among other requests from the Sarawak Government was for Petronas to help set up more technical colleges and branch campuses in the state.

Last year within a week of being sworn into office, Adenan told The Star that Sarawak's 5% oil and gas royalty rate from the Federal Government was not enough.

Subsequently, the Sarawak Legislative Assembly passed a landmark motion urging the Federal Government for more oil and gas benefits. - Asiaone