KUALA LUMPUR – Petroliam Nasional Bhd (Petronas) is set to implement workforce reductions as part of efforts to ensure its long-term sustainability, said its president and group chief executive officer Tan Sri Tengku Muhammad Taufik.
Speaking at a press briefing today, Muhammad Taufik said that the national oil and gas company has yet to determine the exact number of employees affected, as the new organisational structure is still being finalised and will only be introduced later this year.
“This is not a retrenchment; it is a right-sizing workforce exercise. The rationale to do this is to ensure Petronas’ survival in the coming decades.
“If we don’t do it now, there will be no Petronas in 10 years,” he was quoted as saying.
He explained that the initiative primarily targets the company’s ‘enablers’—those in administrative roles—who currently number between 15,000 and 16,000 out of Petronas’ total global workforce of 52,000 to 53,000. He noted that this ratio exceeds the industry average.
Muhammad Taufik also dismissed speculation that the restructuring was linked to Sarawak’s state-owned Petroleum Sarawak Bhd (Petros) taking over as the sole gas aggregator in the state.
Instead, he attributed the move to increasing challenges in oil and gas projects, warning of declining profit margins—from over 20% at present to low double digits in the future—and escalating technical difficulties.
As production sharing contract structures evolve, he said Petronas’ share of earnings could shrink due to rising exploration and production risks.
In December last year, Scoop reported that Petros’ growing role in managing Sarawak’s oil and gas resources could lead to a reduction in Petronas’ workforce. According to a source, the company faces an estimated 30% revenue loss once the agreed natural gas distribution formula in the state is implemented.
The source also claimed that beyond workforce reductions, Petronas had already halted most team-building initiatives and non-essential projects as part of broader cost-cutting measures. Discontinued bonuses and reduced salary increments were among other steps taken, while concerns were raised about the company’s ability to finance necessary operational equipment once the new distribution formula takes effect.
Responding to Scoop at the time, Petronas confirmed ongoing productivity reviews aimed at “eliminating inefficiencies.” The company stated that it remains committed to executing its energy transition strategy while becoming “operationally focused, commercially agile and cost efficient.”
However, the company did not specify whether these cost-cutting measures were directly linked to its gas distribution agreement with Petros.
Meanwhile, Muhammad Taufik said today that Petronas must evolve into a “national energy superstore,” offering more than just oil and natural gas. Instead, he envisions a diversified portfolio featuring an intricate network of energy products tailored to customer needs.
He cited blue ammonia—a clean gas produced from hydrocarbons, with its carbon dioxide component separated and stored using carbon capture, utilisation and storage technology—as an example of the company’s future direction.
To achieve these goals, he stressed the need for Petronas to operate with cost efficiency and agility, enabling it to execute projects while “going sharp and fast.” – February 7, 2025