Petronas Pays $700M in Tax to Sarawak State after Dispute Settlement

A. Ananthalakshmi
Friday, September 18, 2020

Malaysia's state energy firm Petronas on Thursday paid over $700 million in sales tax to the energy-rich state of Sarawak, in a settlement that could open the way to more such payments to state governments.

The payment comes just two weeks after Petronas reported its first quarterly loss in nearly five years due to a coronavirus-related demand slump and lower oil prices.

Analysts and sources close to the company had said that a payment to Sarawak could encourage other energy-rich states in Malaysia to demand sales taxes annually, hurting Petronas' finances.

Petronas, which is fully owned by the Malaysian government, had been fighting Sarawak state's demand for the sales tax in court but the two parties agreed to unexpectedly settle earlier this year.

Petronas is a significant source of revenue for the federal government and a hit to its finances could also affect the annual dividend it pays to the government.

The chief executive of Petronas quit in June after disagreement with Malaysia's prime minister over the settlement, Reuters reported, citing sources close to the government and the company.

The Sarawak state is run by a close political ally of premier Muhyiddin Yassin, who sources have said is open to giving more oil money to the state. The then chief executive Wan Zulkiflee Wan Ariffin has opposed it.

Petronas presented a cheque for 2.96 billion ringgit ($715 million) to the Sarawak government, state news agency Bernama reported.

"The payment represents Petronas' full and final settlement for the sales tax for the year 2019," the company said in a statement.

The payment for this year will be made upon assessments by Sarawak authorities, it said.

($1 = 4.1360 ringgit) 

(Reporting by A. Ananthalakshmi; Editing by Toby Chopra)

Categories: Energy Industry News Activity Production Asia Malaysia

Related Stories

Azeri SOCAR Plans New Agreements with Oil and Gas Majors

Fugro Lands Deepwater Gas Field Job in Southeast Asia

Petronas, Inpex Secure Oil and Gas Exploration Rights off Indonesia

Indonesia's Medco Starts Production at Natuna Sea Fields

CNOOC Puts Into Production New Oil Field in South China Sea

CNOOC Starts Production at Two New Oil and Gas Projects

All Gas from Conrad’s Mako Field to be Sold to Indonesia’s PLN

Shell Launches Next Phase of Malaysia's Deepwater Project with First Oil Production

CNOOC Brings Online Second Phase of Luda Oil Field Project in Bohai Sea

ONGC and BP Sign Deal to Boost Production at India's Largest Offshore Oil Field

Current News

MODEC, Carbon Clean to Advance FPSO-Mounted Carbon Capture Tech

Aker Solutions, PTAS JV Hooks Brownfield Services Extension off Brunei

CDWE Wraps Up Pin Pile Installation Job for Taiwanese Offshore Wind Farm

BP Expands Oil and Gas Scope in Azerbaijan with New Projects and Exploration Rights

Azeri SOCAR Plans New Agreements with Oil and Gas Majors

TPAO, SOCAR and BP to Ink Caspian Sea Oil and Gas Production Deal

Fugro Lands Deepwater Gas Field Job in Southeast Asia

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

China's Sinopec Laucnhes $690M Hydrogen Venture Capital Funds

CIP, ACEN Partner Up for First Large-Scale Offshore Wind Farm in Philippines

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com