Oil and gas company Shell Malaysia announced on Tuesday a re-organisation of its upstream division, which will see a reduction of 1,300 jobs over the next two years.
Shell Malaysia, a unit of Royal Dutch Shell PLC, said in a statement the programme aims to improve efficiency and removing complexity to become a more agile and competitive company. It has a total workforce of about 6,500 staff.
Below is the full statement issued on Tuesday:
Shell Malaysia transforms upstream division to improve efficiency and competitiveness
Shell’s efficiency measures to impact 1,300 positions in upstream division over two years
MIRI, 29 September 2015 – Shell Malaysia today revealed its transformation programme for its upstream division. It focuses on improving efficiency and removing complexity to become a more agile and competitive company.
“We are strengthening our organisation by prioritising productivity and efficiency, without compromising on safety and reliability. We will emerge from this process as a more nimble, resilient and competitive player in the Malaysian oil and gas industry,” said Iain Lo, Chairman of Shell Malaysia.
As a result of this initiative, Shell Malaysia will reduce approximately 1,300 positions from its upstream division over the next two years. Shell Malaysia’s total workforce is approximately 6,500 staff.
Explaining the move, Lo said, “This is certainly 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. I wish to reiterate our commitment to treat our people with respect and care in line with the Shell Global People Principles, and help them transition from their current positions.”
Shell has a long history in Malaysia. It will mark its 125th anniversary in the country next year.
“We are proud of our contributions to the oil and gas industry in Malaysia. We look forward to continue a long and fruitful partnership with PETRONAS. We also believe that we have much to contribute to the nation, especially to Sabah and Sarawak, when it comes to the development of the country’s resources. I want to be unequivocal in saying that Shell remains confident of its future in Malaysia,” said Lo.
Malaysia is one of the very few countries in the Shell Group where all the major lines of Shell’s business, from the upstream to the downstream as well as business services, are present.
In the upstream, Shell Malaysia’s Gumusut-Kakap platform is the company’s first deep-water floating production system in Malaysia. Shell has also recently achieved an important milestone in the construction of a tension leg platform for its second deep-water venture, the Malikai oil field, 100km offshore Sabah. Shell Malaysia is a leading explorer in the country, having invested an average of US$100m per year over the last 6 years and having made 11 discoveries (including discoveries in Blocks where Shell is a partner) in the past 24 months.
Shell’s midstream presence in Malaysia has served as an important innovation hub for the Group. Shell built its first commercial-scale Gas-to-Liquid (GTL) plant in Bintulu, Sarawak. GTL research and development has led to a number of innovative products such as Shell Helix Ultra PurePlus technology that benefits motorists worldwide today.
In the downstream, Shell continues to extend its leadership as the fuels and lubricants brand of choice. Most recently, through its Welcome To Shell initiative, the company embarked on a three-year business and culture change that will see its retail sites nationwide become leaders in hospitality and customer service on Malaysian roads.
“Shell Malaysia is preparing itself to be more competitive in a low oil price environment. Continuing business as usual is not sustainable. 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. We remain aligned strategically with the Group and we are confident that we will be able to deliver competitive returns for our shareholders, thus earning the mandate to compete for our future in Malaysia,” continued Lo.