Shell Malaysia to cut 1,300 upstream jobs

PETALING JAYA: Shell Malaysia is cutting 1,300 jobs from its upstream division over the next two years in a bid to stay competitive in a low oil price environment.
The job cuts represent 13.3% of Shell Malaysia’s total workforce of about 6,500.
Shell Malaysia’s plans follow the recent announcement by Royal Dutch Shell that it would combat the prolonged downturn in the oil industry by slashing 6,500 staff and contractor jobs this year and reducing capital investment by US$7 billion (RM31 billion) or 20%. Royal Dutch Shell employs 94,000 worldwide.
In a statement yesterday, Shell Malaysia said it has embarked on the “transformation programme” for its upstream division to focus on improving efficiency and removing complexity to become a more agile and competitive company.
“Shell Malaysia is preparing itself to be more competitive in a low oil price environment. Continuing business as usual is not sustainable,” Shell Malaysia chairman Iain Lo said.
“We are taking difficult, but necessary action. We have a strategy going forward, anchored on our scale and competitiveness in the upstream and leveraging our leading brand in the downstream.
He said Shell Malaysia is strengthening its organisation and will emerge from the process “as a more nimble, resilient and competitive player in the Malaysian oil and gas industry”.
Lo said the staff cut was “a very difficult decision to make”.
“We have made adjustments in our upstream portfolio and we will drive greater efficiency in our operations. Regretfully, these have resulted in an unavoidable impact on staff,” he said.
However, Lo said Shell, which will mark its 125th anniversary in the country next year, remains confident of its future in Malaysia.
Malaysia is one of the very few countries in the Royal Dutch Shell group where all the major lines of Shell’s business, from upstream to downstream as well as business services, are present.
Shell Malaysia is a leading explorer in the country, having invested an average of US$100 million a year over the last six years and 11 discoveries, including finds in blocks where Shell is a partner, in the past 24 months.
Back in June, Lo said Royal Dutch Shell is mulling the sale of its 51% stake in the loss-making Shell Refining Co (Federation of Malaya) Bhd to exit the downstream business in the country.