KUALA LUMPUR (Aug 30): Petroliam Nasional Bhd (Petronas) said it is in talks with Sarawak state-owned Petroleum Sarawak Bhd (Petros) on future working arrangement over oil and gas reserves in the state.

"We are in active discussion with Petros on how the working arrangement will be," said Petronas president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin.

"What is important here is for all stakeholders to fully understand the long-term implications any changes might have on the industry," he said at a press conference in conjunction with Petronas' second quarter results announcement.

"I'm glad that with Petros, that is our common understanding. We do not want the production sharing companies (PSCs) to be affected," Wan Zulkiflee said.

"At the end of the day, we need to ensure the competitiveness of Malaysia's oil and gas industry remains intact and continue to attract investments into the sector," he added.

Petronas and Petros have gone to court on the regulatory authority over Sarawak's oil assets.

Each party argued that their stance are backed by written laws — the Petroleum Development Act (PDA) 1974 under the federal constitution for Petronas, and Oil Mining Ordinance (OMO) 1958 under Sarawak state law favouring Petros.

The two companies, said Wan Zulkiflee, have been given a grace period until end-2019 to resolve the matter by the Sarawak state government.