KUALA LUMPUR (June 5): Petroliam Nasional Bhd (Petronas) is cutting 10% of its workforce to cope with challenging operating conditions, particularly due to falling crude prices.

President/group chief executive officer Tan Sri Tengku Muhammad Taufik Tengku Aziz said the number of staff involved in the right-sizing process currently stands at around 5,000, and those affected will be notified in stages next year.

“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,” he said at a media briefing here on Thursday.

He said the group aimed for a lean and nimble operation even if oil prices were to reach US$100 (RM423) per barrel. 

“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 said.

Petronas has based its budget on Brent crude trading between US$75 and US$80 per barrel. The benchmark is currently near US$65, down roughly 13% this year, amid global trade tensions and rising Opec+ output.

The group reported a net profit of RM55.1 billion for the financial year ended Dec 31, 2024, down 31.7% from RM80.7 billion a year earlier, due to lower average realised prices and favourable tax adjustments in 2023.

On Petroleum Sarawak Bhd (Petros), Tengku Muhammad Taufik voiced concern over the uncertainty surrounding a deal between the two parties, adding that Petronas remains open to further negotiations on its role in the state.

On May 21, 2025, Prime Minister Datuk Seri Anwar Ibrahim and Sarawak Premier Tan Sri Abang Johari Tun Openg signed a joint declaration stating that Petronas will continue to carry out its functions, activities, responsibilities and obligations under the Petroleum Development Act 1974 (PDA 1974) and related regulations.

According to the Prime Minister’s Office, key principles have been agreed to support further negotiations between Petronas and Petros.

The joint declaration acknowledges both federal and state laws, the status of existing agreements, and the need for a cooperative framework between the two parties.

Under the declaration, the Sarawak state government has appointed Petros as the gas aggregator effective March 1, 2025. Petronas and Petros will also enter discussions to expand cooperation in meeting Sarawak’s gas requirements across several areas.

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