The Sabah government announced it will acquire a 30% equity stake in two new oil and gas fields located on the state’s east coast. It is also finalizing a 40% equity share in a floating liquefied natural gas (FLNG) facility project in Sabah. The agreement formalizing these partnerships is expected to be signed soon, according to Sabah Chief Minister Datuk Seri Hajiji Noor [1, 2].
Hajiji said, “The agreement for this partnership will be signed soon. The government will also develop new industrial parks, including in Kota Belud and a blue economy hub in Kudat to boost investment in the state further and increase domestic economic chain activities.” The developments aim to strengthen Sabah's role in the oil and gas industry through collaboration with PETRONAS under the Commercial Collaborative Agreement [1].
This collaboration has resulted in an increase in Sabah government’s equity holdings in exploration and development projects. It has also opened up new opportunities for local companies to participate in the sector [1, 2].
Since 2022, Sabah’s annual state revenue collection has held steady at RM7 billion, and it is expected to rise to RM8 billion in 2026. In 2025, investment in Sabah’s manufacturing sector reached RM7.6 billion, representing nearly 208% of the investment value recorded in 2024, signaling strong economic growth in the state [1, 2, 3].
The federal government approved an interim special grant of RM1.5 billion for Sabah in 2026. As of June 12, 2026, Sabah received an advance payment of RM600 million from this allocation. The funds will be used for critical infrastructure projects such as paved roads, concrete bridges, water and electricity improvements, as well as housing units under the Rumah Mesra Sabah Maju Jaya program and welfare initiatives. Chief Minister Hajiji emphasized, "Whatever we receive from the Federal Government will be returned to the people in various forms of incentives and assistance" [3].
The announcements were made during events held by the United Progressive Kinabalu Organisation (Upko) in Kota Kinabalu on August 9 and 10, 2026 [1, 2, 3].
