Legal Framework

Petroleum Development Act, 1974
Petroleum Regulations, 1974
The Petroleum Development Act, 1974 is the main legislation governing the Malaysian oil and gas industry. Under the Act, PETRONAS is vested with the entire ownership, and the exclusive rights, powers, liberties and privileges of exploring, exploiting, in respect of petroleum resources whether onshore or offshore of Malaysia.
Petroleum Regulations 1974 further provides PETRONAS with the rights to issue license to any contractors to commence and continue any business or service pertaining to upstream activities. A Contractor wishing to participate in exploration and production activities must apply and receive license from PETRONAS. This function is undertaken by Malaysia Petroleum Management (MPM).
Petroleum Regulations 1974 also stipulates that companies wishing to supply goods and services to the upstream oil and gas sector shall also obtain license from PETRONAS. Licensing and registration for providers of goods and services is undertaken by PETRONAS Group Procurement, which is separate from MPM. For details, visit here.
Other Legislations Applicable to the Oil and Gas Industry in Malaysia
Besides the Petroleum Development Act, 1976 there are a number of other statutes, ordinances and regulations applicable to the industry including but not limited to the following: -
  • Atomic Energy Licensing Act, 1984;
  • Communications and Multimedia Act, 1998;
  • Continental Shelf Act, 1966;
  • Customs Act, 1967;
  • Environmental Quality Act, 1974;
  • Excise Act, 1976;
  • Exclusive Economic Zone Act 1984;
  • Factories and Machinery Act, 1967;
  • Gas Supply Act, 1993;
  • Merchant Shipping Ordinance, 1952;
  • Occupational Safety and Health Act, 1994;
  • Petroleum (Income Tax) Act, 1967;
  • Petroleum (Safety Measures) Act, 1984.
The above list is by no mean to be exhaustive.