The dilemma of petroleum rights and ownership in Malaysia: Federal vs. State
This paper examines the concept of federalism in the oil and gas industry in Malaysia. Malaysia has the world’s 23rd largest crude oil reserves and 14th largest natural gas reserves. The petroleum industry is one of the 12 National Key Economic Areas (“NKEAs”) to enhance national growth under the...
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| Format: | Conference or Workshop Item |
| Language: | English English English |
| Published: |
2019
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| Online Access: | http://irep.iium.edu.my/75058/ http://irep.iium.edu.my/75058/2/16th%20Asli%202019%20Abstract.pdf http://irep.iium.edu.my/75058/3/Letter%20of%20Invite%20-%20Dr%20Wan%20M.%20Zulhafiz%202019.pdf http://irep.iium.edu.my/75058/14/75058%20The%20Dilemma%20of%20Petroleum%20Rights.pdf |
| Summary: | This paper examines the concept of federalism in the oil and gas industry in Malaysia. Malaysia has
the world’s 23rd largest crude oil reserves and 14th largest natural gas reserves. The petroleum
industry is one of the 12 National Key Economic Areas (“NKEAs”) to enhance national growth under
the Malaysia’s Economic Transformation Programme (“ETP”). Due to its economic significance, the
petroleum industry was given priority by the Government of Malaysia. The development of the oil and
gas industry in Malaysia can be divided into two stages i.e. the period before 1974 and after 1974.
Prior to 1974, the ownership of hydrocarbon resources was placed under the jurisdiction of the
respective 13 states forming part of Malaysia. In 1974, Petroleum Development Act (PDA) was
passed by the Parliament of Malaysia. Pursuant to the PDA, a national oil company been established
in the form of public listed company which is called Petroliam Nasional Berhad (PETRONAS). The
national oil company was granted the entire ownership, and the exclusive rights, powers, liberties,
and privileges of exploring, winning and obtaining petroleum onshore and offshore Malaysia. Each
state permanently conferred its ownership, rights, powers, liberties, and privileges in the petroleum by
executing the vesting instrument specified in the PDA. This paper examines the rights of ownership of
the Federation and the various States of Malaysia with regards to the hydrocarbon resources at the
time of the formation of the Federation of Malaysia, and the gradual changes in the ownership of the
hydrocarbon resources from the States to the absolute ownership of the Federal Government in
1974. Furthermore, this paper examines the legislation regulating petroleum resources and the role of
the States and Federation in the oil and gas industry prior to 1974 and after the enactment of the
PDA. |
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