The Sarawak government has filed a petition in Malaysia’s Federal Court seeking a ruling on the constitutional validity and continued applicability of three federal petroleum laws: the Petroleum Development Act 1974, the Continental Shelf Act 1966, and the Petroleum Mining Act 1966.
The petition was filed on 23rd February 2026 and announced by deputy minister in the Sarawak Premier’s Department, Datuk Sharifah Hasidah Sayeed Aman Ghazali.
Sarawak argues that the federal acts infringe upon and restrict the state’s rights over its natural resources, particularly oil and gas located in the seabed of the continental shelf within its boundaries.
Sharifah Hasidah said the sovereign rights to petroleum resources within Sarawak’s boundaries “were vested on Malaysia Day by the British government, in Sarawak and not in the Federation or federal government”, as provided under the Malaysia Agreement 1963 and its annexed instruments.
Sharifah Hasidah also cited Item 2(c) of the 9th Schedule of the Federal Constitution, which vests legislative authority in the Sarawak State Legislative Assembly to regulate petroleum rights through mining leases, certificates and prospecting licences.
Sarawak maintains that the Continental Shelf Act 1966 and the Petroleum Mining Act 1966 were originally applicable only to the states of Malaya and were extended to Sarawak during the post-1969 Emergency period. With the Emergency annulled in December 2011, the state contends that both laws should have ceased to apply by June 2012 under Article 150(7) of the Federal Constitution.
The petition further asserts that the federal acts adversely affect boundaries established before Malaysia Day on 16th September 1963, when Peninsular Malaysia unified with Sarawak, Sabah and Singapore, which separated in 1965. These boundaries were defined by the Sarawak (Alteration of Boundaries) Order in Council 1954 and the Sarawak (Definition of Boundaries) Order in Council 1958.
Sharifah Hasidah said: “These federal acts affect and seize Sarawak’s rights over natural resources, including oil and gas, found on the seabed of the continental shelf within boundaries defined by the Sarawak Orders in Council 1954 and 1958.”
The petition responds to an application filed by Petroliam Nasional Bhd, also known as Petronas, on 10th January 2026. Petronas is seeking leave from the Federal Court for a judicial determination on the legal position of its petroleum operations in Sarawak.
The national oil company aims to clarify the interaction between the Petroleum Development Act 1974 and Sarawak’s Distribution of Gas Ordinance 2016 amid disputes with state owned Petroleum Sarawak Bhd, or Petros, over regulatory oversight, licensing and gas supply.
In a 12th January statement, Petronas said the referral “is not intended to challenge Sarawak’s development aspirations or hinder the role of Petros in the state’s energy sector”. The company urged parties to allow the judicial process to proceed.
Sarawak intends to object to Petronas’ application, arguing that it does not fall within the Federal Court’s exclusive original jurisdiction under Article 128(1)(a) of the Constitution. The state is seeking a determination under Articles 4(3) and 128(1) on the validity of the federal acts as applied to Sarawak.
The Federal Court has scheduled a hearing on Petronas’ leave application for 16th March 2026 following case management on 30th January.
The dispute intensified after Sarawak established Petros in 2024 as the sole aggregator for natural gas produced in the state. This move conflicted with Petronas’ federal monopoly under the Petroleum Development Act.
Despite a May 2025 joint declaration by Prime Minister Datuk Seri Anwar Ibrahim and Sarawak Premier, Tan Sri Abang Johari Tun Openg, recognising both the Petroleum Development Act and the Distribution of Gas Ordinance, tensions persist.
Federal Minister in the Prime Minister’s Department for Sabah and Sarawak Affairs, Datuk Mustapha Sakmud, said the federal government respects Sarawak’s decision to seek judicial clarification.
“Let the court decide. This is important because we need to clarify issues, especially those involving oil and gas in Sarawak. We argue with facts, not just opinions,” Sakmud said after a meeting in Kuching.
Sakmud emphasised moderation and national harmony while defending rights.
Sarawak’s government said resolving the constitutional questions will provide clarity on the regulatory framework for the oil and gas industry in the state, benefitting investors in both upstream and downstream sectors.
The state added: “Notwithstanding the filing of the petition, the Sarawak government remains committed to continuing constructive discussions with the federal government to reach an amicable resolution of these issues that would strengthen national unity, promote more sustainable use of our oil and gas resources, and enable Sarawak to contribute significantly towards Malaysia’s prosperity and economic growth.”
Related court matters are also ongoing. Petros is pursuing a claim to recover RM7.95 million from a bank guarantee recalled by Petronas, with a Kuching High Court decision deferred to 25th February 2026.
About the Author
