KUALA LUMPUR – National oil and gas firm Petroliam Nasional Bhd (Petronas) has confirmed ongoing productivity reviews aimed at, among others, “eliminating inefficiencies”.
The industry giant affirmed this in a response to Scoop’s previous story detailing the potential downsizing of Petronas’ workforce due to an estimated 30% revenue loss linked with Petroleum Sarawak Bhd’s (Petros) entrance as a key player in the state’s natural gas resources.
In a statement shared with Scoop today, Petronas said it remains steadfast in executing its energy transition strategy while delivering continuous improvements by becoming more “operationally focused, commercially agile and cost efficient.”
“As part of these efforts, Petronas is conducting a comprehensive review of its own productivity with a view to streamline its ways of working, eliminate inefficiencies and focus on undertakings that can deliver measurable value,” it added.
However, Petronas did not clarify whether such measures are linked to its gas distribution agreement with Petros.
Petronas added that in discharging its mandate under the Petroleum Development Act 1974, it remains fully committed to creating value for its shareholders.
“To do so, it must ensure it can continue to compete and thrive in an evolving energy sector landscape both at home and on the global stage.”
Previously, a source who spoke with Scoop on the condition of anonymity claimed that due to Petronas’ 30% revenue loss once Petros enters the oil and gas fray in Sarawak, there could be potential shifts in Petronas’ compensation strategy for its employees.
Besides discontinued bonuses and slashed salary increments for staffers across various departments, the source also asserted that the potential thinning of Petronas’ profit-loss margin – once the agreed formula for the distribution of natural gas in Sarawak is implemented – could affect the firm’s ability to purchase equipment needed for its operations.
The source also said that most team-building programmes, as well as projects deemed not vital or purposeful, have been halted as part of cost-saving measures.
An apparent “project” to oversee the layoffs, some of which could be executed via a voluntary separation scheme, is understood to have been established by Petronas – which has close to 50,000 employees across its global presence spanning over 100 countries.
The dispute between Petronas and Petros over the distribution of natural gas in Sarawak has seen Prime Minister Datuk Seri Anwar Ibrahim stepping in to assure that an amicable solution will be taken.
The negotiations, which have reportedly been finalised while authorities finalise several key details, are understood to be linked with Sarawak’s bid for greater self-rule.
Sarawak Premier Tan Sri Abang Johari Tun Openg stated on December 10 that the matter could now be considered resolved, pending an official announcement from the prime minister.
While Abang Johari agreed that there may be a slight reduction to Petronas’s profits due to the gas distribution agreement, he insisted that the matter could be handled accordingly.
He explained that the partnership between Petros and Petronas was necessary as they collectively dominate a significant portion of Sarawak’s gas reserves.
In February this year, Petros was appointed as Sarawak’s gas aggregator, allowing it to procure all natural gas produced in the state by upstream gas producers, for the distribution, supply and sale to all downstream gas buyers.
However, various quarters have highlighted that the Petroleum Development Act grants Petronas ownership and exclusive rights to explore and exploit petroleum resources in Malaysia as a national body.
Details of the agreement between Petronas and Petros have yet to be made public. – December 30, 2024