By Khairul Khalid
Wan Zulkiflee Wan Ariffin
Despite falling profits, Petronas has no plans yet to reduce permanent staff from its 51,000-strong workforce, according to the company’s president and group chief executive (CEO) Wan Zulkiflee Wan Ariffin today.
“Despite more than 200,000 job cuts announced by the industry globally, Petronas is not shedding jobs of permanent staff and remains hopeful that the low oil prices will not prolong to a stage where such measures need to be considered.
“Instead, the company will be reallocating existing manpower across businesses, especially to man increased downstream activities,” said Wan Zulkiflee.
The Petronas CEO said that that since the collapse of oil price, the company has reduced approximately 23% of its operating expenditure (not including payroll). As of September this year, the company has saved around RM1.5 billion from its Cost Reduction Alliance (Coral 2.0) initiative .
“Tough times look set to continue next year. Moving forward, with the outlook on the oil and gas sector still uncertain, we must focus on adapting more prudent measures to our cash management and materialising internal efficiency measures,” said Wan Zulkiflee.
Despite bearish market sentiments, the company still plans to spend RM350 billion in capital expenditure (capex) over the next five years.
“These capex projects are investments for the long term, and we are set on seeing them through successfully to ensure Petronas’ sustainability well into the future,” said Wan Zulkiflee.
Wan Zulkiflee was speaking at a press conference announcing Petronas’ financial results for the third quarter of 2015 (3Q15).
Petronas posted a steep fall in third-quarter earnings for 3Q15 with profit after tax (PAT) down 91% year-on-year to RM1.4 billion.
Petronas’ revenue for 3Q15 fell 25% year-on-year to RM60 billion. For the first nine months of 2015 Petronas’ revenue has fallen year-on-year 25% to RM187 billion and PAT down 57% to RM24 billion.
Petronas attributed the poor results mainly to its upstream business that was hit badly with RM5.4 billion written down in impairment charges, as well lower crude and liquefied natural gas.
Petronas also announced a lower dividend to the government, with an agreed RM16 billion dividend to be paid in 2016 compared to RM26 billion paid this year. The company is working on a budget based on Brent crude oil price of US$48 per barrel, the same price level that the federal government is working on.
Wan Zulkiflee also said that Petronas is still reviewing the Trans-Pacific Partnership Agreement documents that were made public last week before deciding on its next course of action.
You must be logged in to post a comment.