Anglo-Dutch supermajor Shell is aiming to reduce by 250 to 300 its upstream workforce in Malaysia although there are expected to be some new jobs in other business areas.

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The expected job losses come after a reported cut from the oil giant to its upstream team in the UK, with hundreds of workers to go there.

“We realise that this is difficult news for the impacted staff and these are never easy decisions," said Shell Malaysia chairman Iain Lo.

"However, change is a necessary one to ensure that Shell in Malaysia remains competitive, stays resilient in challenging times and is in a strong position to capture opportunities in the energy transition."

Change is necessary: Shell Malaysia chairman Iain Lo Photo: SHELL

Shell said it is "committed to proactively engaging staff throughout the process and ensuring fair treatment in accordance with our values and with Malaysia’s employment laws and regulations".

While Shell Malaysia will see growth in some areas of its business across Malaysia, the exploration and production headcount will fall by as many as 300. Overall around 2% of the company’s national workforce will be shed progressively over two years.

In tandem, Shell Malaysia will be implementing changes to ensure that the company thrives through the energy transition and becomes a more streamlined organisation.

“Malaysia is a very important country for the Shell group. Upstream exploration and production continue to be a critical business for Shell and the upstream business in Malaysia has been identified as one of Shell’s nine core performance units worldwide,” added Lo.

“The organisational changes that we are embarking on are crucial for the business to reduce complexity, drive stronger and end-to-end connectedness to make it easier for assets and ventures to focus on delivery.”

Shell Malaysia confirmed that, in line with its drive for increased efficiency and collaboration, most of the group's upstream staff would relocate to the principal office in Miri, Sarawak.

Upstream reported in late October that most of the company’s E&P staff would be relocated to Miri, while a now smaller office in the Sabah state capital Kota Kinabalu would handle downstream operations and provide some upstream support.

Sabah Deputy Chief Minister Bung Moktar Radin said at that time: “I demand that Shell Malaysia reconsiders the decision as there will be an economic impact on the workforce and subsequently have an impact on the state’s economy.

“Shell Malaysia should work hand in hand with the Sabah government in balancing the state’s economy, not only raking in profits from the state but not abandoning a friend when times are hard.”

Despite scaling back its upstream team in Sabah, Shell said there would be no changes to its deep-water operations offshore the state.

Shell, which has been in Malaysia for almost 130 years, said it would continue to seek growth opportunities in the Southeast Asian nation in line with its global strategy, to support the country with its energy transition.