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1 -1. Short title and commencement.

This Act may be cited as the Petroleum Development Act 1974 .

2 -2. Ownership.

(1) The entire ownership in, and the exclusive rights, powers, liberties and privileges of exploring, exploiting, winning and obtaining petroleum whether onshore or offshore of Malaysia shall be vested in a Corporation to be incorporated under the Companies Act 1965, or under the law relating to incorporation of companies.

(2) The vesting of the ownership, rights, powers, liberties and privileges referred to in subsection (l) shall take effect on the execution of an instrument in the form contained in the Schedule to this Act.

(3) The ownership and the exclusive rights, powers, liberties and privileges so vested shall be irrevocable and shall enure for the benefit of the Corporation and its successor.

3 -3. The Corporation.

(1) Notwithstanding section 22 of the Companies Act 1965, relating to the names of companies, the Corporation shall be styled as the Petroliam Nasional Berhad or in short form PETRONAS.

(2) The Corporation shall be subject to the control and direction of the Prime Minister who may from time to time issue such direction as he may deem fit.

(3) Notwithstanding the provisions of the Companies Act 1965 or any other written law to the contrary, the direction so issued shall be binding on the Corporation.

3A -3A. Powers of the Corporation.

(1) In addition to all the powers of the Corporation as prescribed in its Memorandum and Articles of Association, the Corporation shall have the power to take over or acquire by agreement, assignment, purchase or by any other means the whole or any part of any commercial undertaking, business or enterprise of whatever form of any person or body of persons (corporate or unincorporate) and carry out or enter into any activity, whether mentioned in this Act or not, which prior to such taking over or acquisition was carried out by, and for the purpose of, that undertaking, business or enterprise.

(2) The powers conferred on the Corporation under subsection (1) shall be in addition to and not in derogation of any of the rights, powers, liberties, privileges and benefits conferred on the Corporation by this Act or any other written law.

4 -4. Cash payment by the Corporation.

In return for the ownership and the rights, powers, liberties and privileges vested in it by virtue of this Act, the Corporation shall make to the Government of the Federation and the Government of any relevant State such cash payment as may be agreed between the parties concerned.

5 -5. National Petroleum Advisory Council.

(1) There shall be established a Council to be known as the National Petroleum Advisory Council consisting of such persons including those from the relevant States as the Prime Minister may appoint.

(2) It shall be the duty of the National Petroleum Advisory Council to advise the Prime Minister on national policy, interests and matters pertaining to petroleum, petroleum industries, energy resources and their utilization.

6 -6. Prime Minister's permission required for downstream operations.

(1) Notwithstanding the provisions of any other written law, no business of processing or refining of petroleum or manufacturing of petro-chemical products from petroleum, may be carried out by any person other than PETRONAS unless there is in respect of any such business a permission given by the Prime Minister.

[Am. Act A290]

(2) Any person who on the commencement of this Act is carrying on any business referred to in subsection (1) may continue to do so but shall, not later than six months from the date of the commencement of this Act, apply in writing to the Prime Minister for his permission referred to in subsection (1).

(3) Subsection (1) shall apply to any business of marketing or distributing of petroleum or petro-chemical products; and any person who on the commencement of this subsection is carrying on any such business may continue to do so but shall, not later than six months from the date of c

6A -6A. (Deleted by Act A382).

[Deleted by Act A382]

7 -7. Power to make regulations.

The Prime Minister may make regulations for the purpose of carrying into effect the provisions of this Act and, without prejudice to the generality of the foregoing, such regulations may, in particular, provide for-

(a) the conduct of or the carrying on of -

(i) any business or service relating to the exploration, exploitation, winning or obtaining of petroleum;

(ii) any business involving the manufacture and supply of equipment used in the petroleum industry;

(iii) downstream activities and development relating to petroleum;

(b) the marketing and distribution of petroleum and its products;

(c) penalties in the form of a fine not exceeding one hundred thousand ringgit or imprisonment not exceeding five years or both for breach of any of the regulations and for non-compliance with any term or condition of any licence, permission or approval

7A -7A. Delegation.

The Prime Minister may, by notification in the Gazette, delegate, subject to such conditions and restrictions as may be prescribed in such notification, the exercise of any of his powers or the performance of any of his duties under this Act, other than his powers and duties under subsections 3(2), 5(1) and section 7, to any person described by name or office.

[Ins. Act A290]

7B -7B. Offences by bodies of persons and by servants and agents.

(1) Where an offence against this Act or any regulations made thereunder has been committed by any company, firm, society or other body of persons, any person who at the time of the commission of the offence was a director, manager or other similar officer or a partner of the company, firm, society or other body of persons or was purporting to act in such capacity shall be deemed to be guilty of that offence.

(2) Whenever it is proved to the satisfaction of the court that a contravention of the provisions of this Act or any regulations made thereunder has been committed by any clerk, servant or agent when acting in the course of his employment the principal shall also be liable for such contravention and to the penalty provided therefor:

Provided that nothing in this section shall be deemed to exempt the liability of the clerk, servant or agent in respect of any penalty provided by this Act or any regulations made thereunder for any con

7C -7C. Jurisdiction of courts.

Notwithstanding anything contained in any other written law to the contrary, a Sessions Court or, in Sabah and Sarawak, a Court of a Magistrate of the First Class, shall have jurisdiction to try any offence under this Act or any regulations made thereunder and on conviction to impose the full penalty therefor.

[Ins. Act A290]

8 -8. Saving.

(1) Save for section 14 thereof, the Petroleum Mining Act 1966 shall not apply to the Corporation.

(2) In the application of section 14 of that Act to the Corporation, any reference to the licensee shall be construed as a reference to the Corporation, and any reference to the exercising of any rights contained in the licence shall be construed as a reference to the exercising of the rights, powers, liberties and privileges vested in the Corporation by virtue of subsection 2(1) of this Act.

[Am. Act A290]

9 -9. Transitional.

(1) Any exploration licences issued and any petroleum agreements entered into pursuant to the Petroleum Mining Act 1966, and any licences, leases and agreements issued or made under any written law in force relating to prospecting, exploration or mining for petroleum shall continue to be in force for a period of six months from the date of the coming into force of this Act or for such extended period as the Prime Minister may allow.

(2) Where the six months' period has elapsed and no extension under subsection (1) is allowed, the licences, leases or agreements mentioned in that subsection shall determine or cease to have effect and there shall be paid to the person whose rights under the licence, lease or agreement have been so determined, adequate compensation which may be in the form of a single sum or in the form of periodical payments of money or in such other form as may be determined by the Federal Government or under any arrangement agre

10 -10. Definition.

For the purpose of this Act, the expression "petroleum" means any mineral oil or relative hydrocarbon and natural gas existing in its natural condition and casinghead petroleum spirit including bituminous shales and other stratified deposits from which oil can be extracted.

[Ins Act A382]