Malaysia’s highest court on Monday allowed national energy firm Petronas to pursue a legal bid to challenge several laws passed by the state of Sarawak, amid a protracted dispute over gas distribution rights.
Sarawak, on Borneo island, is home to more than 60 per cent of Malaysia’s gas reserves and has long sought greater control over its natural resources.
In recent years, it has passed laws and appointed its own firm Petros to procure, distribute, supply and sell all natural gas in the state, putting it in conflict with Petronas, or Petroliam Nasional Berhad, which is wholly owned by the federal government.
After two years of stalled talks, Petronas filed a motion at the Federal Court in January seeking clarity on the legal and regulatory framework governing its operations in Sarawak.
Sarawak filed a competing claim last month, challenging three federal laws governing petroleum.
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