Kota Kinabalu: Gerakan Kuasa Rakyat Malaysia (G57) urged the Sabah Government to open immediate talks with Petronas and the Federal Government over the construction of an oil refinery in the State.
Its Chairman, Datuk Zulkarnain Mahdar, said the current arrangements that ship Sabah’s crude to Peninsular Malaysia for refining amount to an economic injustice that can no longer be justified.
Sabah accounts for about 40 per cent of Malaysia’s total oil output, while Sarawak contributes 30 per cent, meaning more than 70 per cent of the nation’s oil and gas originates from Borneo. Despite this, Sabah has no refinery of its own.
“The construction of an oil refinery in Sabah is no longer an option, but a strategic necessity,” Zulkarnain said.
He said the absence of local refining capacity meant Sabah was being denied value-added opportunities, downstream industrial development, employment and technology transfer that would ordinarily flow to a state of its energy output.
The call has found some support within the state government. Deputy Chief Minister II Datuk Seri Masidi Manjun has also said that Sabah is open to revisiting refinery proposals, acknowledging that “some form of refinery must be built in the State.
Zulkarnain said the current global energy climate made the matter more pressing.
“Ongoing conflict in the Middle East and growing uncertainty around the Strait of Hormuz, a critical artery for international oil shipments, had exposed the dangers of depending on distant processing facilities and external supply routes,” he said.
He said that Sabah has the resources, geographic advantage and policy backing to position itself as a regional energy hub.
On that front, G57 identified Labuan as a potential site for a refining and storage centre, citing the federal territory’s proximity to both Sabah and Brunei, itself a substantial oil and gas producer.
Zulkarnain said Labuan could serve as an export gateway to East Asian and Northeast Asian markets, strengthening Malaysia’s standing in regional energy supply chains.
Sabah’s geographic proximity to Brunei, he added, further reinforces the case for a Borneo-based energy cluster with sufficient combined resources to sustain a viable refining industry.
