In June 2017, the
Chief Minister of Sarawak,
Abang Johari Openg, announced that Sarawak will establish a state-owned oil and gas exploration company. On 4 July 2017, Abang Johari announced that the petroleum company would be 100 percent owned by Sarawak and will work with Petronas on an equal basis. It was eventually formed on 7 August 2017. The Sarawak government aimed to have Petros in operation by the first quarter of 2018 and become an active player in the oil & gas industry by 2020. Sarawak government then sent a legal team to the United Kingdom to search for additional supporting documents regarding the rights of Sarawak in the Malaysian agreement. Among them are Sarawak (Alteration of Boundaries) Order 1954 by the Queen in Council, which stated that Sarawak boundary covers way beyond the three nautical miles. In November 2017, Sarawak has formed a special task force to negotiate with Petronas regarding the return of Sarawak oil and gas rights. Sarawak was unwilling to resort to court action to nullify the Territorial Sea Act and Petronas dominance on Sarawak waters so as to preserve the good relationship between the federal and state government. In February 2018, Abang Johari questioned the validity of the 1974 Petroleum Development Act. This was because the Act was passed during the Emergency Proclamation period from 1969 to 2011. The Emergency Proclamation was abolished in 2011. This raises questions that whether the Petroleum Development Act would cease to become effective after 2011. He also stated that the Petroleum Development Act does not exclude laws such as Sarawak Oil Mining Ordinance 1958 which stated that only Sarawak has the right to issue mining licenses for oil production. Abang Johari also claimed that under the Item 2(c) of the State List, Ninth Schedule of the Federal Constitution, Petros is able to exercise its rights on Sarawak waters. Petronas had welcomed Petros into the oil and gas mining scene as long as Petros acted within the framework of Malaysian Petroleum Development Act, 1974. However, the opposition politicians in Sarawak cast doubts on whether Sarawak has truly regained its oil and gas rights without making any amendments to the existing laws in the country. In April 2018, the opposition coalition,
Pakatan Harapan offered a 20% oil royalty deal for Sarawak government if the former wins the federal power in
2018 Malaysian general election, however, Sarawak refused to sign it because it has no legal standing. Pakatan Harapan also proposed the setting up of "Sarawak Petrogas" to jointly manage oil and gas resources together with Petronas; while claiming that Petros is only a "
subcontractor in logistics" and failed to perform its duty as an oil and gas company. After
2018 Malaysian general election, Malaysian federal government changed hands to Pakatan Harapan. On 22 May 2018, Petronas responded to Sarawak state attorney-general that it disagrees that Petronas need to apply license from Petros to operate in Sarawak waters. On 4 June 2018, Petronas filed a suit in the
Federal Court of Malaysia in order to assert its position as the exclusive owner of Malaysian oil resources (including Sarawak) and the 1974 Petroleum Development Act is still valid. On 22 June 2018, the federal court of Malaysia denied Petronas application to start legal proceedings against Sarawak because the case is not within the jurisdiction of the federal court. On 10 July 2018, Sarawak state assembly passed the Oil Mining (Amendment) Bill (2018) in order to regulate oil and gas activities in the state. All oil and gas companies operating in Sarawak waters would be given grace period until the end of 2019 to comply with Oil Mining Ordinance (OMO) 1958. Since 1 January 2019, Sarawak enforced 5% sales on all petroleum products. Initially, Petronas was given dateline until end of October 2019 to pay the sales tax. In September 2019, prime minister Mahathir stated that payment of 20% oil royalty is not possible for Sabah and Sarawak because it may compromise financial status of Petronas. On 21 November 2019, the Sarawak government filed a suit against Petronas for not paying the 5% sales tax. In March 2020, high court ruled that Sarawak has the power to impose sales tax on Petronas. On 8 May 2020, Petronas agreed to pay RM 2 billion in petroleum products sales tax to Sarawak with a condition that the tax will be lowered on a staggered basis in the future. Besides, both parties also agreed that the Petroleum Development Act 1974 is valid with Petronas as the sole regulator of oil and gas industry in Malaysia.
Wan Zulkiflee, chief executive of Petronas quit his post in June 2020, apparently dissatisfied with the outcome of the sales tax issue. In February 2020, Sarawak claimed to take full control of natural gas supply, sales, and distribution network in the state from Petronas. While Sarawak was finalising the takover of gas distribution rights from Petronas in 2024, former Petronas chairman
Tengku Razaleigh Hamzah and an unnamed analyst stated that Petros would have difficulty to replicate Petronas' ability to negotiate a good deal when dealing with multinational corporations, which in the end would be detrimental to earnings and investments in Sarawak and Malaysia as a whole. Disputes remained whether Sarawak is to become the sole gas aggregator in the state as Petros being the sole gas aggregator would effectively control the supply and pricing of gas distribution in the state, thus squeezing the
profit margin of Petronas. In October 2025, Petronas began a legal proceeding in Kuching High Court to challenge the status of Petros as the sole gas aggregator in the state. On 10 January 2026, Petronas filed a review in the federal court which seeks to clarify its legal position within the framework of the federal law of Petroleum Development Act 1974 (PDA) and the state law of the Distribution of Gas Ordinance 2016 (DGO). On 23 February 2026, the Sarawak government filed a petition in the federal court to the determine the constitutional validity and applicability of the Petroleum Development Act 1974, the Continental Shelf Act 1966 and the Petroleum Mining Act 1966 to the state of Sarawak. In October 2020, the Sarawak government issued mining leases in Miri and Marudi to Petros for onshore oil and gas mining. In year 2020, Petros started to distribute
liquefied petroleum gas (LPG) to 1,500 business and 2,500 households in Miri and Bintulu. In December 2020, Petros launched its own brand of LPG
gas cylinder. In 2023, Petronas found six new oil wells at Balingian and West Luconia geological provinces. The government of Sarawak expressed the desire to collaborate with Petronas on the exploitation of new oil wells as the Sarawak state has ownership rights on the new oil wells as far as 200 nautical miles off the coast as stipulated in the Oil Mining Ordinance 1958. ==Corporate affairs==