Sarawak Presses for Oil and Gas autonomy,Raising Geopolitical stakes in South China Sea
KUCHING,Malaysia – Sarawak,a Malaysian state on the island of Borneo,is aggressively pursuing greater control over its oil and gas (O&G) sector,challenging the authority of the federal government in Putrajaya and national oil company Petronas. This push for autonomy, centered on resource ownership and regulatory authority, could have significant geopolitical implications, particularly regarding ongoing disputes in the South China Sea.
As of March 2025, Putrajaya and Sarawak “agreed that Petros, not Petronas, will serve as Sarawak’s gas aggregator,” marking a pivotal shift in power dynamics. Petros, the state-owned O&G vehicle, is now responsible for the supply, distribution, and pricing of natural gas within Sarawak. But this move is merely a stepping stone in a broader effort to reclaim full autonomy over its O&G sector.
Sarawak’s ambitions extend beyond land-based resources, with the state “asserting control not just over land-based resources but also extending claims to the continental shelf up to 200 nautical miles offshore.” This claim is rooted in the Sarawak Alteration of Borders 1954 order (SAB), a colonial-era legislation.The push for greater autonomy is not new. Sarawak’s government had obtained authenticated copies of the SAB in “July 2017” and has been increasingly vocal about its rights since then, fueled by a growing sense of regionalism and a desire for greater political legitimacy.Sarawakians have “increasingly rewarded political parties that challenge the federal government on this front.”
Legal and Strategic Challenges
While politically popular, Sarawak’s claims face significant legal and strategic hurdles. International law, specifically the United Nations Convention on the Law of the Sea (UNCLOS), governs continental shelves and exclusive economic zones. Malaysia, as a sovereign state, is a signatory to UNCLOS; sarawak, as a sub-national government, is not.
According to experts, any “SAB-based claims are hence inapplicable, given the conditionalities and evolution of modern legal frameworks.”
The 1974 Petroleum Development Act (PDA) further complicates the situation, vesting ownership of Malaysia’s offshore and onshore petroleum resources in Petronas. While Sarawak argues the PDA was enacted during an Emergency period and is therefore nullified, critics counter that Parliament was fully functional during that time, and there’s no record of Sarawakian MPs objecting to the PDA.
The move towards greater autonomy also has geopolitical implications. Malaysia is currently locked in a dispute with China over the Luconia shoals off sarawak’s coast, a contested area also claimed by other nations, including the Philippines and Vietnam, as tensions rise in the South China Sea.
“It is indeed not clear how introducing more risk to continental shelf governance would benefit Sarawak or Malaysia at large, particularly in a region as contested as the South China Sea.” Experts also fear that “diplomatic friction” could arise with other nations, such as Indonesia, who may be “unwilling to fully engage with Putrajaya as Sarawak’s agent” due to separatist tensions in their own territories.
Decentralization vs. Stability
While Sarawak “feels strongly that these maximalist demands for historic rights are essential redress for decades of grievances,” it also faces the practicalities of defending resource ownership and regulatory authority in international legal frameworks. The core issue becomes balancing decentralization with the need for a unified front in international disputes.
For example, the U.S. federal system also balances state rights with national interests. While states like Texas and Alaska have significant control over their oil and gas resources, the federal government retains authority over interstate commerce, national security, and international relations – preventing a patchwork of conflicting policies.
A Path Forward?
Despite the challenges, analysts suggest a path forward may lie in political mediation rather than legal adjudication.
“In March 2025, Putrajaya further announced that any overlapping legal jurisdictions and issues between the 1974 PDA and Sarawak’s distribution of Gas Ordinance would be preferably settled through out-of-court negotiations by both companies.”
One could argue that the benefits of a unified approach to resource management and territorial defense outweigh the potential gains from fragmented control. A coordinated strategy backed by the full weight of the Malaysian federal government might be more effective in protecting Sarawak’s interests in the long run, especially given China’s increasing assertiveness in the South China Sea.
FAQ: Sarawak’s Oil & Gas Autonomy Push
What is Sarawak trying to achieve? Sarawak is seeking greater autonomy over its oil and gas sector, including control over resource ownership and regulatory authority extending to its continental shelf.
What is the Sarawak Alteration of Borders 1954 order (SAB)? the SAB is a colonial-era law that Sarawak uses to support its claim to control the continental shelf up to 200 nautical miles offshore.
Why is Sarawak challenging Petronas’s authority? Sarawak believes it deserves a larger share of the revenue generated from its oil and gas resources and seeks to address historical grievances by asserting greater control over its natural resources.
What are the main legal challenges to Sarawak’s claims? International law (UNCLOS), which favors sovereign states and the 1974 Petroleum Development Act (PDA), which vests ownership of Malaysia’s oil and gas resources in Petronas.
* What could happen if Sarawak gains full autonomy? while potentially boosting Sarawak’s economy and political power, full autonomy could complicate Malaysia’s relationship with other countries in the region and weaken its ability to defend its maritime claims in the South China Sea.
