Sabah has potential of becoming biggest oil and gas producer

Sabah has potential of becoming biggest oil and gas producer

June 2, 2008 Filed Under: Oil and Gas  

Sabah can be a major economic force in the country if the plan to build a 300mw power plant by Petronas and Yayasan Sabah as well as the emphasis on downstream oil and gas industry with the proposed construction of a petrochemical plant in Kimanis materialise.

The announcement on the two mega projects by Prime Minister Datuk Seri Abdullah Ahmad Badawi has brought about much promise of a vibrant future as this will create substantial economic and industrial spin-offs by opening doors to business opportunities and providing employment opportunities.

Assistant Minister of Resource Development and IT, Donald Mojuntin also said Sabah has the potential of becoming the biggest oil and gas producer not only in Malaysia, but in the whole of South East Asia.

It has the potential to produce 1 million barrels of oil a day,” he said. “The estimated reserves from the present Sabah oilfields is 1.4 billion barrels of oil and 7.7 trillion scf of gas.”

With that in mind, it is only logical and fair that Petronas should develop the oil and gas industry in Kimanis.

Donald said Petronas had done so in Terengganu, transforming, Kertih, a former fishing village to a vibrant and thriving oil and gas industrial site. It has also benefitted Bintulu and Miri in Sarawak .

“With the Prime Minister’s announcement, at last PETRONAS is showing that it is sensitive to the economic wellbeing of Sabah and the needs of her people,” he said.

Donald also said that PETRONAS would support those who were willing to invest for the long term to build capacity and human capital.

Meanwhile, Donald suggested that the State Government relook and restudy the 1976 agreement with Petronas to find out whether natural gas extraction was also part and parcel of the oil agreement.

It is possible that the 5 per cent oil royalty is calculated solely on the volume of crude oil production.

Anyone who appreciates the economic and developmental needs of the State has to ask the question whether Sabah has thus far received anything from the sales of gas whether in LNG or in other processed form.


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