Sabah wants to maximise value of oil and gas resources

14 OCTOBER 2026

KOTA KINABALU: The Sabah Government wants to ensure that the development of the oil and gas industry goes beyond exploration and production to generate greater economic value and long-term benefits for the state and its people.

Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor said the more important question

was not merely how much oil and gas resources Sabah possessed, but how much value could be derived from these resources for the benefit of the state and its people.

He said the oil and gas industry encompassed the entire value chain, from infrastructure and support services to midstream and downstream activities, vendor development, technology, skilled manpower, investment and other economic activities associated with the industry.

"Certainly, we want the growth of this industry to generate wider economic spillover benefits for Sabah," he said at the signing ceremony of the Land Lease Agreements for the Sabah Oil and Gas Terminal (SOGT) and Sabah-Sarawak Gas Pipeline (SSGP) projects between the Sabah Economic Development Corporation (SEDCO) and PETRONAS at the Kimanis Ballroom, Hyatt Regency Kinabalu, here today.

His speech was delivered by Deputy Chief Minister III/State Minister of Industrial Development, Entrepreneurship and Transport Datuk Ewon Benedick.

Hajiji said the expansion of exploration activities and discoveries of new resources in recent years pointed to greater prospects for the development of Sabah's oil and gas industry in the years ahead.

He said the SOGT and SSGP infrastructure should not be viewed solely in terms of their respective operational functions, but also as essential infrastructure supporting the state's economic growth ecosystem.

The strategic locations of these facilities could open up opportunities for further economic and industrial activities in surrounding areas, particularly along the Kimanis- Sipitang corridor, which has the potential to develop further into a major growth area in Sabah.

In this regard, he said the infrastructure developed must be utilised not only to meet present needs but also to support future investment opportunities, industrial development and socioeconomic advancement.

Hajiji said the State Government greatly appreciated PETRONAS' contributions, investments and expertise, having long played an important role in the development of the local oil and gas industry and served as a development partner to Sabah.

He said the State Government wanted to see greater benefits and opportunities for local participation, including enabling Sabah-based companies and vendors to progress beyond providing support services towards building stronger technical, management, technological and financial capabilities.

Local companies must have the capacity to participate in larger and higher-value opportunities within the industry's value chain, while PETRONAS has an important role to play alongside the State Government in realising this aspiration, he said.

At the same time, he said industrial development must go hand in hand with human capital development by ensuring that Sabahans are given opportunities to acquire the skills, experience and exposure needed to build careers in the oil and gas sector, particularly in technical and professional fields.

Hajiji also stressed that SEDCO must continue to evolve beyond its role as an asset owner and manager to become an investment facilitator and strategic industry partner.

This included taking a more proactive approach in identifying assets, opportunities and potential areas of collaboration that could be jointly developed with industry players.

He said these efforts should encompass opportunities involving land, infrastructure, commercial development and other forms of collaboration that could deliver mutual benefits and reasonable returns to the state.

He said the signing of the land lease agreements between SEDCO and PETRONAS was an example of how the management of state land assets could be structured more systematically, providing certainty to users while ensuring that the state's commercial interests continued to be safeguarded.

Hajiji expressed hope that the SEDCO-PETRONAS collaboration would continue to evolve olve beyond a transactional relationship into a broader strategic partnership that delivers mutual value.

This would help ensure that the management and development of the state's resources and assets translate into tangible and lasting economic value.