We refer to our corporate and business update announcement dated 7th June 2022 with regard to the issue of Sabah State sales tax (“SST”) in the context of our Group’s operations. We also refer to various media articles on 19th July 2022 reporting certain comments attributed to the Sabah State Finance Minister II in relation to our indirect wholly-owned subsidiaries SEA Hibiscus Sdn Bhd and Hibiscus Oil & Gas Malaysia Limited (formerly known as REPSOL Oil & Gas Malaysia Limited) (“Companies”) and the SST issue.

We wish to make the following initial clarifications in response to the said media articles:   

• In the letter from the office of the Chief Minister of Sabah dated 8th July 2022 (“Letter”) received by the Companies, it was stated that the Companies are liable for SST on the basis that the Companies are providing “taxable goods”, namely crude petroleum oils and natural gas from the State of Sabah.

• On 11th July 2022, the Companies responded to the Letter to clarify that pursuant to the Petroleum Development Act 1974, they cannot and do not provide such “taxable goods” from the State of Sabah and are therefore not legally liable for SST.  This is a position which has been affirmed by the Companies’ tax legal advisors.

• Representatives from the Companies have been in ongoing engagement with Sabah State officials with the objective of clarifying the issue of the applicability of SST to the Companies.

• The Companies remain committed towards resolving this matter with the Sabah State authorities in an amicable and collaborative manner that will further the mutual interests of both parties and ensure minimal disruptions to operations.  However, the Companies will take appropriate action to safeguard their legal rights and interests accordingly where they are constrained to do so.

• It is and has always been our Group’s policy to pay all taxes when legally due and payable.

This announcement is dated 19 July 2022.