Malaysian state energy company Petronas has reportedly announced plans to reduce its workforce by 10% in response to the challenging operating conditions in the oil and gas sector, particularly falling crude prices.
The company's president and group CEO, Tan Sri Tengku Muhammad Taufik Tengku Aziz, stated that approximately 5,000 employees would be affected and notified in stages the following year.
The decision is part of Petronas' strategy to maintain a lean and nimble operation, even if oil prices were to increase to $100 per barrel (bbl).
Aziz was quoted by The Edge Malyasia as saying: “Petronas 2.0 will be run differently, organised differently, will have different work processes, and to move towards that, we have to correct the work process.”
Currently, the company has based its budget on Brent crude trading at between $75 and $80 per barrel, while the benchmark has fallen to around $65, a decline of roughly 13% this year amid global trade tensions and rising Opec+ output.
Aziz statement said: “There is a logic, an assumption set, and a projection that backs it up. Over time, we have seen this – those who have tracked our history will know that when the fields were easier, our profit before tax margin was around 35% to 40%.
“Today, it is [between] 25% and 38%. These margins are going to shrink further, and the fields are going to get smaller. So the value-added [Petronas] 2.0 has to transform into an organisation that monetises molecules commercially and competitively, not just at home, but also abroad,” he added.
For the financial year ending 31 December 2024, Petronas reported net profit of RM55.1bn ($13.02bn), a significant decrease of 31.7% from RM80.7bn the previous year.
This drop is attributed to lower average realised prices and favourable tax adjustments in 2023.
Regarding the ongoing negotiations with Petroleum Sarawak Bhd (Petros), Tengku Muhammad Taufik expressed concerns over the uncertainties but reaffirmed Petronas' openness to further discussions about its role in the state.
On 21 May 2025, a joint declaration was signed by Prime Minister Datuk Seri Anwar Ibrahim and Sarawak Premier Tan Sri Abang Johari Tun Openg, confirming Petronas' continued functions under the Petroleum Development Act and related regulations.
The Prime Minister's Office has indicated that key principles have been agreed upon to support further negotiations between Petronas and Petros.
The joint declaration recognises the authority of both federal and state laws, the status of existing agreements and the necessity for a cooperative framework between the two entities.
Additionally, effective on 1 March 2025, the Sarawak State Government has designated Petros as the gas aggregator.
Petronas and Petros are also set to discuss ways to enhance cooperation in meeting Sarawak's gas requirements.
It was reported in April 2025 that Petronas is nearing a deal to buy liquefied natural gas (LNG) from Commonwealth LNG's Louisiana plant in the US.
