Petronas denies report of staff layoffs

Technology procurement and project staff recruitment for mega projects yet to commence.

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) has brushed aside a report that it would be laying off staff in an effort to cut operational expenditure (opex) by 20% this year.

On the contrary, excess manpower in certain areas will be redeployed to projects that require a new staff intake, Petronas president and chief executive officer Shamsul Azhar Abbas said.

Describing the report as ridiculous, he said Petronas’ mega projects like RAPID still needed manpower. He said the procurement of technology and recruitment of project staff have not even started.

“So, it’s not going to take place over the next five years. For that, we do not see a staff cut, we still need them (for the projects),” he told reporters after announcing the group’s financial year results here, yesterday.

Petronas has indicated a cut in opex along with a 10% slash in capital expenditure (capex) to preserve its profitability as crude oil prices continue to tumble.

Shamsul said if oil prices were to drop further next year, the group might look into further reducing its capex by 15%.

“We have revised downward our five-year capex plans for the 2015-2019 period due to current global oil prices, which are beyond our control,” he added. With the cut in the expenditures, he said the group would be able to achieve profit this year despite the oil forecast price of US$55 per barrel in 2015.

“The next few years may see some tapering of production due to capex and opex cut, but once we start (to recover) again, the production will catch up. We are still be studying the impact on production (from the cut). I guess within the next three months, we will know better.

“It’s still too early as we’re only in the second month of the year so we don’t know when the stability of the market is going take place,” he said, adding that Petronas is reviewing the situation.

-- BERNAMA