State govt praised for MoU with Chinese firms

KUCHING: The State Reform Party (STAR) will continue to fight for 100 per cent ownership and full economic rights over Sarawak’s oil and gas to become a developed country.

STAR president Lina Soo said this when contacted by New Sarawak Tribune on the signing of Memorandum of Understanding (MoU) between the state government and Chinese firms.

She congratulated the state government for signing the MoU with Chinese firms, Beijing BECA Sci-Tech Co Ltd and Sinopec Engineering Incorporation, to develop an integrated oil and gas complex in Lawas.

Lina Soo

“At an investment cost of USD5 billion, this is still a small fry compared to the USD30 billion oil and gas complex at Pengerang in Johor which has a spillover effect on surrounding developments such as Iskandar, Senai Desaru and ports,” she said.

According to Petronas’ reports, Sarawak produces up to 850,000 barrels of oil and gas (BOE/D) every single day but the state has seen little development.

Soo added that Sarawak could participate in the oil and gas industry throughout the whole value chain by having its own refinery and growing its own range of petrochemical upstream and downstream products to add value by four to five times the current Gross Domestic Product (GDP).

“Which means every RM100 worth of oil and gas can have an added value of RM350-500 to the final end product.

“Despite producing the bulk of oil and gas for Petronas, Sarawak’s annual workforce of 70,000 entering the job market still need to go to Johor, Kuala Lumpur and Singapore for employment,” she said.

Soo added that despite being an oil-rich state, Sarawak was unable to feed its own population and give jobs to its own people.

“Few governments have the deep pockets to finance oil and gas projects of this magnitude.

“Sarawak’s leaders and policy makers must ensure that such a project must benefit Sarawak by way of its participation throughout its value chain which includes but is not limited to: local content policy (contracts, employment, procurement); transfer of technology and training to locals; compliance to international standards on environment and safety requirements during implementation up to completion, commissioning and operations of the project; installation of up-to-date information technology so that every drop of oil and gas leaving Sarawak is tracked and not lost,” she explained.

As the Chinese are formidable and well exposed in handling international business dealings, Soo called upon the state government to put in place a strong team and hire oil and gas experts in this field, not just local talents, but also to head-hunt for world-renowned oil experts, to ensure that the state would secure a fair deal and maximise the profits from its resources.