Concern over Shell’s exit plan

Kota Kinabalu: The State Government views seriously Shell Malaysia’s decision to downsize its operations in Sabah, said Deputy Chief Minister I Datuk Seri Bung Moktar.

“I demand that Shell Malaysia reconsider the said decision because it will have direct economic impact on the workers involved and also to the State economy,” he said in a statement, Friday. 

Bung, who is also State Works Minister, said Shell Malaysia is supposed to be working hand-in-hand with the Sabah State Government in balancing the State economy and not to only just make profit in this State and then during difficult times leave a friend who has helped a lot.

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“Shell is one of the petroleum companies which have benefited a lot in this State through upstream and downstream industries. 

“Shell should be together with the Sabah State Government during this time when the whole world is confronted by Covid-19 pandemic and not to plan something for its own sake,” he said in a response to a report on Shell’s decision to withdraw from the state in a big way.

Deputy Chief Minister Joachim Gunsalam also urged Shell to reconsider its decision.

Gunsalam, who is also the State Industrial Development Minister, said he was unsure of the reasons why the multinational company was trimming its upstream operations and pulling out staff from Sabah.

He said it was bad for the company to downsize or leave Sabah.

“I hope they reconsider. We will try to meet up with them if the need arises because I don’t have the full story yet. We don’t know what is their main reason — we need to know why,” he told FMT.

Joachim 

Besides its downstream business, Shell operates the deepwater oil fields offshore Sabah, namely Gumusut-Kakap and Malikai, both producing a combined 220,000 barrels per day.

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The company’s offshore operations started in 1958, when Shell drilled its first offshore well in the Sabah Basin.

It was reported that the withdrawal, though unlikely to upend operations, is crippling from a visual and economic viewpoint.

Currently, the multi-national company’s upstream and downstream operations are housed in the 14-storey Plaza Shell, a landmark building owned by developer Hap Seng Group and sits at the heart of the city’s central business district here, with some 200 Shell staff occupying four floors.

It was a proud moment for the company when it officially opened the office back in November 2015, with the top management saying then it represented the company’s long presence, partnership and progress in the state.

 But sources said staff were told in an internal meeting last week the company had decided to trim its operations in the state capital and ship to Miri in Sarawak, the company’s traditional upstream headquarters.

The sources also claimed that staff from the upstream office in Kuala Lumpur would be transferred to Miri.

Shell Malaysia confirmed in a short email that such an exercise would take place although it did not specify the number of staff involved, the destination location or the main reason for such a move.

 “We will reduce our office footprint in Kota Kinabalu, however Sabah remains an important state to Shell,” the company said.

“We continue to be committed to our upstream deepwater and downstream operations as we contribute to the development of communities in Sabah.”

Sarawak’s Tourism, Arts and Culture Assistant Minister Sebastian Ting was quoted last week as saying he was all-out for Shell’s plan to set up a new office in Miri.

He said Shell was looking at establishing a new office there that could accommodate at least 1,000 employees, some of whom would be from other regional offices.

He welcomed the move, saying it would bring economic windfall to Miri.