According to local Malaysian media reports on February 7, due to the increasing challenges in the global operating environment, Petronas, the Malaysian national oil company, will implement layoffs to ensure long-term survival.
According to reports, Petronas CEO Tengku Muhammad Taufik Tengku Aziz told the media, “This is to ensure Petronas’ survival for the next few decades. If we don’t take action now, the company may not exist in 10 years.’ However, he did not mention the specific number of positions that would be affected.”
According to information on the Petronas official website, the company has nearly 50,000 employees. Muhammad Taufik stated that this ‘reasonable scale adjustment’ is not the result of an agreement between Petronas and the Sarawak state government regarding local natural gas distribution.
Last year, negotiations between Petronas and Sarawak’s Petros raised concerns about the potential impact on Petronas and its operations in Sarawak. Sarawak accounts for over 60% of Malaysia’s natural gas reserves.
A government report indicates that due to planned maintenance shutdowns of some production facilities and a decrease in demand from some export markets, Malaysia is expected to see a decline in natural gas and crude oil production in 2025.
Muhammad Taufik also pointed out that the composition of production sharing contracts is expected to change, which will lead to a decrease in Petronas’ revenue share. The company’s current high profit margin of over 20% is expected to drop to a low double-digit level in the coming years.
The CEO further pointed out that going forward, Petronas should not only be an oil and gas supplier, but must also provide more products such as blue ammonia.