The national O&G firm is overstaffed in certain areas and is no longer competitive compared to international oil companies.

THE restructuring will impact all staff levels, including senior staff members and contract workers.

Petroliam Nasional Bhd (Petronas), is set to reduce approximately 10% of its workforce as part of the national oil firm’s group-wide restructuring initiatives amid a declining crude prices and straining profits.

President and Group CEO Tan Sri Tengku Muhammad Taufik Tengku Aziz said that the overall oil and gas (O&G) industry is currently under severe strain and challenges.

“We anticipate that around 5,000 employees will be affected by this restructuring, representing roughly 10% of the total workforce,” he said in a briefing today.

Petronas can no longer operate as it has in the past, the circumstances have changed drastically.

Tengku Muhammad Taufik added Petronas is overstaffed in certain areas and is no longer competitive compared to international oil companies.

“We are focusing on a 10-year horizon that will determine Petronas’ future,” he said.

“The rationale behind this restructuring is to transform the way Petronas operates so that it can remain sustainable, similar to international companies,” he added.

The restructuring will impact all staff levels, including senior staff members and contract workers, while new hires will not be affected.

Petronas is among many global oil companies implementing workforce reductions, particularly following the decline in oil asset values and intensified global competition.

In 2024, Petronas reported a 32% decrease in net profit to RM55.1 billion, down from RM80.7 billion in 2023, amid global economic volatility and lower oil prices.

Regarding the ongoing dispute over Sarawak’s O&G rights, Petronas has commited to implementing all the provisions outlined in the declaration announced between Putrajaya and Sarawak concerning the state’s O&G resources.

Tengku Muhammad Taufik said the declaration paves the way for resolving issues surrounding energy resource sharing.

“We will adhere and comply with the joint declaration. Petronas welcomes it because it provides a comprehensive framework for both parties to engage.”

He added that Petronas will continue negotiations to resolve all issues and achieve a mutually beneficial outcome.

Putrajaya and Kuching have previously issued a joint declaration for the sustainability of the oil and gas industry in the East Malaysian state.

The joint declaration was ratified by Prime Minister (PM) Datuk Seri Anwar Ibrahim and the Premier of Sarawak, Datuk Patinggi Tan Sri Abang Johari Tun Openg.

Tengku Muhammad Taufik said the importance of  resolving the issue, as it pertains to foreign investment in Malaysia, particularlyly in Sarawak.

“External parties will assess the agreement between Petronas and Petroleum Sarawak Bhd (Petros) to determine their investment decisions in the country.

“We have built a reputation with international O&G partners over four decades, and this agreement is important.

“We are one of the top five gas companies globally, and maintaining that standing is vital,” he said, adding that the resolution with Kuching is important for the country and foreign investors.

“The negotiation channels are open daily. The challenge lies in translating the principles of the declaration into protocols and making them operational,” he said. – TMR