Shell Malaysia announced a transformation programme for its upstream division that will axe 1,300 positions over the next two years. Shell Malaysia’s total workforce is approximately 6,500.
“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,” said Iain Lo, Shell Malaysia chairman.
The programme will focus 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 Lo.
Shell has a long history in Malaysia. It will mark its 125th anniversary in the country in 2016.
“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.
Shell Malaysia is a leading explorer in the country, having invested an average of USD 100 million per year over the last six years and having made 11 discoveries 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. In the downstream segment, 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,” Lo said.