Petronas, Malaysia’s state-owned oil and gas company, will cut about 10% of its workforce in a firm-wide restructuring as it looks to reduce costs due to falling crude prices.
The company will reduce headcount by more than 5,000 people, and all those affected will be informed in stages through next year, Chief Executive Officer Muhammad Taufik said in a briefing in Kuala Lumpur on Thursday. It will also freeze hiring until December 2026, he said.
“The margins are shrinking, the fields are getting smaller,” Taufik said. “It will be challenging to meet dividend targets” with current oil prices, he said.
The oil price slump — coupled with declining output from its older assets — will pose a challenge for Malaysia’s government, which derived 10% of its revenue from Petroliam Nasional Bhd., the full name of the company, in 2024. The energy producer not only anchors the nation’s energy sector, but also plays a key role in funding infrastructure, education, and social programs through dividends and taxes.
Petronas sets its budget based on the Brent oil at around $75 to $80 per barrel, Taufik said. The global benchmark is currently trading near $65, down about 13% this year, as trade tensions threaten global growth, and OPEC+ restores production.
Petronas’ net income slid 32% in 2024, following a 21% drop in 2023.
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