KUALA LUMPUR Feb 13, 2025 – Malaysia’s national oil giant Petronas to downsize manpower in order to preserve the company’s survival for upcoming times.
Group Chief Executive Officer Tan Sri Engku Muhammad Taufik stated that the company has carefully considered the new challenges in an ever-evolving industry, emphasizing that without taking this bold step now, there would be ‘no Petronas in 10 years,’ he told the media last Friday , February 7.
While the exact number of job positions affected has not been disclosed, this decision was made to safeguard Petronas’s reputation as a key driver of Malaysia’s economic growth. For over 50 years, Petronas has consistently provided sustainable value to the nation, further cementing its position as the country’s forefront National Oil Company.
This ongoing effort is set to unfold in the second half of the year, with completion expected by year-end. During the restructuring process, Tan Sri Engku Muhammad Taufik noted that some employees may be reassigned to new roles, while others may face displacement.
Taufik also aims to reduce the number of ‘enablers,’ or those working in ‘support roles’ within the administrative department, as their numbers are significantly higher compared to those in similar companies.
Petronas And The Sarawak Government
Contrary to popular belief, Taufik debunks the rumors suggesting that this initiative resulted from the Sarawak government’s request to take over the role of managing the state’s gas resources, a responsibility that was previously held by Petronas.
In 2024, negotiations between Petronas and Sarawak’s Petros raised concerns on the possible impact it may have on the company, given that they a the key contributor to our federal revenue and it’s operations in Sarawak, a region naturally blessed with natural gas resources.
Although this decision was difficult, Taufik emphasized that this was backed by the company’s strong financial position, making room for proactive measures rather than waiting for a decline in business and being forced to terminate employees due to inability in adapting.
He remarked that the growing challenges in the oil and gas industry are likely to decrease the favorable margins usually enjoyed by Petronas, driven by the increasing technical difficulties across various project sectors. The shift in production contracts will also lead to a reduction in their share of earnings, as partners demand a bigger portion due to higher risks in the upstream development.
What’s Next For Petronas?
As a forward thinking leader, Taufik tries to oversee the bigger picture by noting how the company’s potential lies in a diverse and unlimited range of products. To sustain growth, Petronas will need to offer an array of complex solutions to their clients, such as blue ammonia— a clean gas produced by hydrocarbons with the help of advanced carbon capture technology.
This shift in business approach is highly essential for Petronas to maintain it’s relevance in a rapidly changing industry. As the company embarks on this new journey for a brighter future, Petronas will need to operate with greater cost-efficiency, while adapting to emerging market dynamics.
