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Falling oil prices hit O&G players
Published on: Monday, May 18, 2015
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Selangor: Industry players are starting to feel the impact of the drop in global crude oil prices, which led oil and gas giant Petroliam Nasional Bhd (Petronas) to defer capital expenditure and reduce operational spending.One such player, Petrofac-RNZ, has implemented a voluntary separation scheme (VSS) for its employees based in its Kuala Lumpur head office, sources say.

The VSS was offered last month to its permanent employees based in its Kuala Lumpur head office with Job Grade 19 and below only. Petrofac-RNZ also has offices in Sabah and Sarawak.

Petrofac-RNZ is a member of Petrofac Group. It provides engineering and consulting services to the offshore oil and gas sector, including oilfield services to the international oil and gas industry.

A check on its website showed that a big portion of its jobs in Malaysia were for Petronas' exploration and production arm, Petronas Carigali Sdn Bhd.

According to a memo Petrofac-RNZ cited "low market activities" as the reason for implementing the VSS. It said that despite efforts to restructure manpower needs, there was still underutilisation of manpower and employee contribution due to the limited job profile.

As at press time, attempts to contact Petrofac-RNZ were unsuccessful, as calls to its office were unanswered.

Petrofac-RNZ was established in 1993 as RNZ Integrated (M) Sdn Bhd. Based on a check with Companies Commission of Malaysia, RNZ Integrated reported a net profit of RM11.4 million and revenue of RM145.4 million for the financial year ended Dec 31, 2013.

In January last year, the company was awarded a five-year umbrella design and engineering services contract y Petronas Carigali.

Under the scope of the tendered contract, Petrofac-RNZ will provide a range of multi-discipline consultancy and design services against specific scopes of work for Petronas Carigali's assets in the region.

According to Malaysia External Trade Development Corp's website, RNZ Integrated is one of six companies licensed for major offshore engineering projects by Petronas and it has over 650 staff trained in various specialisations in the industry.

The company's scope of services include project management, construction management and supervision, field development plan, brownfield engineering, specialist study services and deepwater engineering services.

According to Petrofac-RNZ's website, its track record includes projects in Malaysia, India, Sudan, Vietnam, Myanmar, Thailand, Qatar and Turkmenistan.

In Malaysia, most of its services were rendered to Petronas Carigali projects. These projects include Sumandak Selatan Integrated Development Project (Phase 2), Sabah Oil & Gas Terminal Development Project, Labuan Gas Terminal Expansion Project and Bergading Cluster Development.

It has also worked with Talisman (Malaysia) Ltd, Sarawak Shell Bhd and Tanjung Langsat Port Sdn Bhd.

Meanwhile, talk is rife that other industry players are either cutting salaries, laying off employees or redeploying manpower due to the slowdown in oil and gas projects.

It is believe that several major oil and gas companies with operations in Malaysia have been affected.

Earlier in March, Petronas Carigali had issued a memo to its contractors, informing them of its cost optimisation programme that would see personnel seconded to Petronas Carigali taking a 20pc paycut effective May 1.

The company confirmed last month that it had initiated cost-cutting measures among its contractors and vendors, and the salary reductions would affect some 170 professionals hired by five service providers contracted to Petronas projects.

Petronas president and chief executive Wan Zulkiflee Wan Ariffin said the cost-cutting measure would affect professionals provided by service providers, with salaries ranging from more than RM20,000 to RM100,000.

It is understand that 80pc to 90pc of the company's cost base is via its partner contractors.



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