Petronas-Petros deal could face ‘Tabung Haji’ reckoning in future, warns expert

KUALA LUMPUR, Sept 10 — A settlement between Petronas and Sarawak’s state-owned Petros could become a future accountability issue if it is seen as a political compromise rather than a decision made in the national interest, a former member of the MACC’s consultation and corruption prevention panel warned.

Walter Sandosam said the political circumstances surrounding any agreement could later come under scrutiny, even if it is defended today as a practical solution.

“Petronas-Petros could become a future accountability issue if a settlement is seen as political compromise rather than national-interest decision,” he said.

The warning comes ahead of Prime Minister Anwar Ibrahim’s meeting on the implementation of the Malaysia Agreement 1963 (MA63) on Friday, where petroleum and revenue matters are expected to be among the key issues.

Petronas and Petros have been in talks over the Sarawak company’s role as the state gas aggregator, against a wider dispute over authority in the oil and gas sector.

Petros has cited Sarawak’s Distribution of Gas Ordinance 2016 in asserting its role in the state, while Petronas maintains that the Petroleum Development Act 1974 (PDA) gives it exclusive rights over the country’s petroleum resources.

Sandosam who is also the former president of the Institute of Internal Auditors Malaysia (IIAM) said the political context had changed, with the federal government now more dependent on Sabah and Sarawak.

“This creates space for political horse-trading,” he said.

He said giving Petros greater leeway over the aggregator issue could later be framed as a decision that weakened Petronas and the federal government’s position.

Sandosam said decision-makers should be mindful of the experience of Tabung Haji and Felda, where decisions made in a previous political climate were later revisited amid concerns over abuse of power, poor governance and oversight failures.

A royal commission of inquiry into Tabung Haji reprimanded executives over decisions influenced by political considerations, highlighting how actions taken by public institutions can be reassessed years later.

“Even good intentions or paper trails may not protect decision-makers later, because future opponents can still frame the deal as politically motivated,” Sandosam said.

He said the PDA should prevail if national interest was the main consideration.

Sandosam, who is also a former president of the Institute of Internal Auditors Malaysia, said any agreement must be assessed not only on the immediate political outcome but also on whether it protects the country’s long-term interests.

Petronas has repeatedly stressed that safeguarding national energy security is central to its role as Malaysia’s national oil company.

In its half-year results announcement last month, Petronas said its priority was to “safeguard energy security for those we serve”.

Its president and group CEO, Tengku Muhammad Taufik, said the company had strengthened its portfolio and worked across the value chain to deliver uninterrupted energy for Malaysia as its national oil company.