Petronas confirmed that the leaked internal memo to staff on plans to cut RM50 billion from expenditure in the next four years is genuine.
The leaked memo from Petronas president Wan Zulkiflee Wan Ariffin states that the oil and gas giant would slash RM50 billion from operating and capital expenditure by 2020 in the face of sliding oil prices.
"Petronas confirms that it has circulated an internal communication on part of its on-going efforts to optimise costs to address the impact of the continuous fall in crude oil prices.
"We are not at liberty to disclose or discuss the contents of the communication with external parties.
"More information will be released in due time," it said in a statement late Tuesday.
In the memo sent to staff on Monday and sighted by Malaysiakini today, Wan Zulkiflee said some projects will be deferred while details will be revealed in March.
“The reality of the situation is in the numbers. Brent closed at US$28 per barrel on Friday, and continues to slide. There are still no signs of recovery,” he said, adding that the national oil company reacted quickly at the first signs of trouble by cutting Capex and Opex.
Presently, Brent crude oil is priced at US$29.10.
Wan Zulkiflee said Petronas also made a strategic decision to begin review of the firm's business operating model to ensure better efficiency.
"This review will result in a change to our existing organisation structure, the details of which I hope to be able to share with you in March," he added.
Presently, he said the national oil company has yet to determine how the review and structural change would affect its workforce.
However, Wan Zulkiflee assured that it would study all possible options to ensure Petronas strikes the right balance between the welfare of its employees and best interests of its business.
"In the meantime, we have started a review of contract positions, which is expected to affect contract positions currently not critical to Petronas' core business activities. Concurrently, reviews of positions filled by our manpower supply contractors are also underway, as an initial step in reducing manpower costs," he said