KUALA LUMPUR (July 22): The Office of the Chief Minister of Sarawak (OCMS) has denied that Sarawak's state oil corporation Petroleum Sarawak Bhd (Petros) is involved in Oman’s massive new oil exploration Block 17.

In a statement today, the OCMS said although there was a memorandum of understanding (MoU) signed, it had lapsed and that "it was merely an understanding for Petros to assist should the company intended to invest in Sarawak".

It was responding to an online news article by Sarawak Report's entitled "Taib's secret interest in Sarawak's Petros venture" on Friday.

"Petros, the state oil company and co-regulator of the oil and gas industry in Sarawak, has nothing to do with the venture in Oman as alleged in the article," the OCMS said.

"At best the article is only a speculation in an attempt to smear Petros' image for reasons only known to Sarawak Report," it added.

Citing a report in the national Times of Oman newspaper, Sarawak Report had pointed to the signing of a US$150 million financing arrangement between Bank Nizwa and the former Sarawak governor Tun Abdul Taib Mahmud's family-linked South Sea Energy Sdn Bhd, to enable investment in a prospective oil field in Oman.

The report had questioned what exactly were the financial interests of the Taib family in South Sea Energy, which Sarawak Report said was closely involved in Petros’ first venture in Oman’s Block 17.