Malaysia: Petronas to Pay $303M in Sales Tax to Sabah State

Mei Mei Chu
Monday, November 9, 2020

Malaysian state-owned energy giant Petronas is expected to pay the resource-rich state of Sabah 1.25 billion ringgit ($303 million) in sales tax next year, state media said.

Sabah Deputy Chief Minister Jeffrey Kitingan said Prime Minister Muhyiddin Yassin had agreed for the state to collect the 5% tax from Petronas next year, Bernama news agency said late on Saturday.

Sabah and neighboring Sarawak state in Borneo island hold much of the nation's oil and gas reserves and have long asked for more payments from Petronas, the sole manager of the country's energy reserves.

Petronas suffered its first loss in nearly five years during the second quarter due to a coronavirus-driven slump in demand and oil prices. The payments could further hurt its finances.

The firm had fought Sarawak state's demand for sales tax in court, but in September paid the state 2.96 billion ringgit ($717 million) in taxes, as part of an unexpected settlement deal.

Analysts said the payment could encourage other states to make similar demands.

Sarawak is run by a close political ally of the prime minister, who sources have said is open to giving more oil money to the state. But former Petronas chief executive Wan Zulkiflee Wan Ariffin had opposed the settlement and resigned in June.

Muhyiddin's agreement for Petronas to pay Sabah comes after his ruling coalition wrestled control of the state from the opposition after narrowly winning a state election in September.

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, its sole shareholder.

The company is set to pay 34 billion ringgit in dividend this year to help the government fight the COVID-19 pandemic, and 18 billion ringgit next year. 

($1 = 4.1260 ringgit) 

(Reporting by Mei Mei Chu; Editing by William Mallard)

Categories: Industry News Activity Asia Malaysia

Related Stories

China Starts Production at Major Oil Field in Bohai Sea

CNOOC Finds Oil and Gas in South China Sea

Woodside Finds South Korean Partners to Advance LNG Value Chain

Valeura Makes Progress with Multi-Well Drilling Campaign in Gulf of Thailand

PTTEP Hires Energy Drilling’s Rig for Southeast Asia Offshore Job

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Japan Protests China’s New Oil and Gas Construction Activities in East China Sea

Petronas Expands Suriname Portfolio with Deepwater Block Acquisition

Yinson Production, “K” LINE Target Europe's CCS with FSIU and LCO2 Solutions

Woodside Agrees Long-Term LNG Supply with Petronas Unit

Current News

PTTEP Acquires Southeast Asia’s Offshore Block from Chevron’s Hess Unit for $450M

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

Sapura Scoops Over $118M for Chevron, PTTEP Subsea Ops off Thailand

Pandion Energy Divests Interests in Three Norwegian Assets to Inpex

China Starts Production at Major Oil Field in Bohai Sea

Dutch Contractor Completes Malaysia’s Largest 'Rig-to-Reef' Decom Project

China Rolls Out 17MW Floating Wind Turbine Prototype

SBM Offshore’s Jaguar FPSO Enters Drydock in Singapore (Video)

EnQuest Picks Up Offshore Oil and Gas Block in Brunei

CNOOC Finds Oil and Gas in South China Sea

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