KUALA LUMPUR (July 19): Sabah will be cancelling the working permits for Hibiscus Petroleum Bhd’s two oil units operating in that state if they do not settle the taxes and penalties owed within the stipulated deadline.

Quoting State Finance Minister II Datuk Masidi Manjun on Tuesday (July 19), Malay Mail Online reported that a notice of action has been issued to Repsol Oil & Gas Ltd and SEA Hibiscus Sdn Bhd, both of which are wholly owned by Hibiscus, on July 8 after a grace period of one week to settle the arrears.

“We issued a notice on July 8 to say that all working passes will be cancelled on Oct 1, 2022 if payment is not settled,” he was quoted as telling the Sabah state legislative assembly.

Masidi said several engagements have taken place between the two parties to settle their disagreements, with the state demanding some RM97.31 million, comprising RM66 million in sales tax and RM31.31 million in penalty incurred for late payment.

“We sent the payment notice on June 22, with dues to be settled within 30 days of notice or the state will initiate civil action against them.

“On July 1, they had asked for a grace period of one week to negotiate terms with Petronas,” he said.

The two subsidiaries had refused to make payment after contesting that it sold its crude oil entitlement from the Kinabalu Oil Field at the Labuan Crude Oil Terminal facility “outside the sovereignty and jurisdiction of the state of Sabah” and hence should not be charged the state sales tax.

At midday break, Hibiscus was up 1.69% or 1.5 sen to 90.5 sen with 23.3 million shares done.