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Shell Malaysia to cut 250-300 upstream jobs

Shell Malaysia to cut 250-300 upstream jobs

Published date: 15 January 2021

Shell will cut 250-300 jobs from its upstream operations in Malaysia over the next two years, or around 2pc of the current workforce, calling it a necessary change to ensure it is “in a strong position to capture opportunities in the energy transition”.

Shell announced in September plans to cut 7,000-9,000 jobs over the next two years as part of a structural reorganisation to shift towards a low-carbon future.

Most of Shell Malaysia’s upstream staff will relocate to its principal office in Miri in the Malaysian state of Sarawak. The firm will continue to maintain an office in Kota Kinabalu in Sabah state for downstream businesses and some upstream support. “There are no changes to Shell’s offshore deepwater operations in Sabah,” it said.

Streamlining operations

Shell has scaled back its upstream presence in Malaysia in recent years, having most recently handed over the E11 gas production facility in Sarawak to Malaysia’s state-owned Petronas.

The E11 complex supplies feedstock gas to the 30mn t/yr Petronas-operated Bintulu LNG. This followed the sale of Shell’s 15pc stake in the 7.7mn t/yr Malaysia LNG Tiga project to the Sarawak state government, completing its exit from the Bintulu LNG complex.

But last year it completed work on a second phase of the Gumusut-Kakap semi-floating production system in Malaysia, supporting exports of the field’s light sweet Kimanis crude. “Upstream exploration and production continues to be a critical business for Shell, and the upstream business in Malaysia has been identified as one of Shell’s nine core performance units worldwide,” Shell Malaysia chairman Iain Lo said.

It echoes Shell chief executive Ben van Beurden’s broader view on the future direction of the business. “We will continue to invest, but it will not be about how many barrels of oil, or cubic feet of gas, [the] upstream [business] produces, but how much it adds to the bottom line,” he said. “Upstream will be critical to Shell as we change — we need it to be very successful, so we have the financial strength to invest further in our lower carbon products.”

The Covid-19 pandemic has battered the oil industry, pushing many major oil companies to take steps towards a low-carbon energy future in line with international climate goals.

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