Contributed by Yarp Khai Pin by H R Dipendra
Faizah Jamaludin, Partner and Head of Oil and Gas Practice Group in Skrine who moderated this session started off the session by introducing the session’s sole speaker, Nooruddin Abdullah, Head, Legal, Upstream Exploration & Production Business, PETRONAS.
The speaker, Nooruddin Abdullah then began by stating that the session was merely for sharing on the understanding of Production Sharing Contracts (PSC) since PETRONAS was first established in 1974.
He stressed that there are different types of petroleum arrangements in the petroleum industry e.g. the concession agreements, the PSC/Exploration Production Sharing Agreement (EPSA) and service contracts and Malaysia is currently adopting the PSC.
However, “there is no one petroleum agreement being better than the others, it basically depends on what you see it or where you sit”, he said.
Faizah Jamaludin, Partner and Head of Oil and Gas Practice Group in Skrine who moderated this session started off the session by introducing the session’s sole speaker, Nooruddin Abdullah, Head, Legal, Upstream Exploration & Production Business, PETRONAS.
The speaker, Nooruddin Abdullah then began by stating that the session was merely for sharing on the understanding of Production Sharing Contracts (PSC) since PETRONAS was first established in 1974.
He stressed that there are different types of petroleum arrangements in the petroleum industry e.g. the concession agreements, the PSC/Exploration Production Sharing Agreement (EPSA) and service contracts and Malaysia is currently adopting the PSC.
However, “there is no one petroleum agreement being better than the others, it basically depends on what you see it or where you sit”, he said.
Nooruddin went on to address the audience that prior to 1974 which was before the establishment of PETRONAS, Malaysia adopted the concession system as provided by Petroleum Mining Act 1966.
“Prior to the formation of Malaysia on 16th September 1963, Sarawak and Sabah had already exploited oil using the Mining Oil Ordinance in Sarawak and Land Ordinance in Sabah”, he emphasised.
“The switching from concession system to PSC came into picture due to the global events on high oil price and Arab Oil Embargo Energy Crisis in 1960s - 1970s. This had forced the government to consider which option was best for the Nation, concession system or PSC, and the need for a greater centralised control of the petroleum industry which is by using the PSC”, he added.
Nooruddin pointed out the enactment of Petroleum Development Act 1974 (PDA 1974) which then led to the establishment of PETRONAS. With PDA 1974, PETRONAS is given the exclusive rights for the exploring of petroleum and its products whether onshore or offshore in Malaysia. “By virtue of PDA 1974, PETRONAS is now the regulator and manager of the nation’s petroleum resources”, he said.
“Prior to the formation of Malaysia on 16th September 1963, Sarawak and Sabah had already exploited oil using the Mining Oil Ordinance in Sarawak and Land Ordinance in Sabah”, he emphasised.
“The switching from concession system to PSC came into picture due to the global events on high oil price and Arab Oil Embargo Energy Crisis in 1960s - 1970s. This had forced the government to consider which option was best for the Nation, concession system or PSC, and the need for a greater centralised control of the petroleum industry which is by using the PSC”, he added.
Nooruddin pointed out the enactment of Petroleum Development Act 1974 (PDA 1974) which then led to the establishment of PETRONAS. With PDA 1974, PETRONAS is given the exclusive rights for the exploring of petroleum and its products whether onshore or offshore in Malaysia. “By virtue of PDA 1974, PETRONAS is now the regulator and manager of the nation’s petroleum resources”, he said.