Petronas and Sarawak


The goings-on between the Sarawak state government and Petronas was kinda humorous if you ask me.

I have been rather hesitant about writing anything about it as it is something that I have very little knowledge of.

So when it was reported that matters have been settled and that the Sarawak state government have gotten what they wanted, I put in a little reading to find out what really happened.

These are some points that caught my interest, sufficient for me to make a note of and add to things I have an opinion on, but lets use this news article as a point of reference.

Sarawak agrees on 7 points in meeting with Putrajaya, Petronas

It seems that a political settlement has been reached but I am curious how will this affect Petronas operations in Sarawak and the career of Sarawakian Petronas employees.

For the first point, putting a Sarawakian on the Petronas board was no big deal, there are seats on the board reserved for political appointments anyway.

I guess a Sabahan will be appointed to the board too, since I have no doubt that Sabah politicians are going to say that they too contribute to the country’s oil & gas revenue.

True enough, this happened – PM agrees to Sabah having Petronas board member.

Soon enough Petronas will have a Terengganu native on its board too; thank god not all the states in Malaysia had oil or LNG, otherwise we would have a huge conference table in Petronas boardroom to accommodate all the members during board meetings.

Let’s hope Kelantan will not demand a seat in anticipation of future revenues, and Melaka and Johor too, considering the huge petrochemical complex in operation and being built in those states.

The second point, about hirings.  I am not sure how easy it is for Petronas to do, since in normal situations, most organisations would prioritise hiring locals where possible to minimise costs, and only recruiting further afield when none suitable are found locally.

I am quite certain that Petronas is already practicing this wherever they set up shop.

Based on that article, about 75% of Petronas employees working in Sarawak are Sarawakians, while 1000 Sarawakians are deployed elsewhere in the Petronas “universe”.

However, O&G is a highly technical industry and hirings are usually based on skills and experience rather than where they originate from; hiring decisions are made based on whether the operation can afford the cost of hirings while remaining competitive and profitable.

I am kind of iffy that they now have to add in getting the state approval for recruiting from outside the state as part of the process.

Will Petronas be hampered by political agenda when decisions to mobilise and make structural changes to its operation have to be made to suit the industry’s changing environment like now?

What if, for some weird equal treatment and non-discriminatory claims, all 50+ countries and their various provinces/states demanded this?

We are in the midst of a massive oil slump that looks like it is going to be permanently slumped, and yet we are not making it easier for our only Fortune 500 company to maintain its ranking in that list.

Just to put things in perspective, some USD400 billion worth of O&G projects (some estimates are more than this) have been deferred or cancelled worldwide (most likely cancelled than deferred now that the slump is more or less permanent), and more than 350,000 O&G jobs have been lost since 2014 (the number is rising).

The entire industry has accepted the “lower for longer” oil price environment with players taking drastic measures to adapt and survive in the present changed environment.

This is the new realities that Petronas must adapt to quickly and effectively; it still has customers to serve, existing contracts to fulfill and new investments to consider while making adjustments in view of  its 2Q profits plunging 85% this year (this even made the news in Cambodia and people there were shocked reading this), and we are putting additional roadblocks in its path (smh)

Sarawak also wanted to increase the number of Sarawakians in Petronas’ Sarawak operation from 60% at management levels up to 95% for non-executive position.

Easiest way to do this is redeploy all Sarawakians back to the state, and we would get almost 100% “Sarawak jobs for Sarawakians only” goals.

If only things were that simple …

In reality, Petronas is a multinational and it should view hirings and appointments from a global perspective; within the Petronas universe, geographical and political boundaries should not exist other than some additional administrative processes, only its own structural boundaries matter when deploying staff.

It is only fair all around that employees with the right skills and experience are mobilised across the globe to meet the requirements of specific jobs.

Just as the freeze on work permits by Sarawak state have actually affected Petronas’ operations (and that of its suppliers and contractors), the restrictions of political boundaries may affect not only Petronas operation but also the career prospects of Sarawakians within Petronas.

Mobility across geographical areas is critical for any career development as it builds experience and skills while providing much needed exposure to different working environment that will only add value when being considered for career advancement.

For example, I value my work experiences in the US and UK not so much because of the job scope and responsibilities, but because they gave me different perspectives of how things can be different when faced with different values, cultural influences and working environment, adding a different dimension when making job-related decisions.

Imagine having your job mobility being restricted to only jobs in Sarawak because taking up that lucrative Canadian assignment may affect the percentages of Sarawakians working in the Sarawak operation, or limiting the prospect of Petronas non-Sarawakian employees gaining some experience in the LNG fields off Sarawak because that might affect the percentages too.

And now we are face with this,

Asked if he was happy with the outcome of negotiations so far, Adenan said: “Yes. This is just the beginning of our amicable relationship. This is just the first step.” = The Borneo Post.



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