Report: ‘There will be redundancies,’ SapuraKencana CEO says
Malaysian oilfield services provider SapuraKencana has reportedly decided to undertake a restructuring of the company that may involve “redundancies” amid low oil price environment.
According to Nikkei Asian Review, an Asia-focused English-language publication, the Malaysian company will undertake a restructuring campaign, effective June 1, 2016.
The news website stated that the company’s president and CEO, Shahril Shamsuddin, addressed the employees in a town hall meeting on Friday in Kuala Lumpur.
“Inevitably because there are consolidations, there will be redundancies. I wish I could say otherwise but once oil price goes from $130 to $30, your costs have to go down correspondently,” the news website quoted Shahril Shamsuddin as saying.
“Difficult decisions need to be made, and I ask for your patience. This new structure will allow us to be more integrated, efficient and to focus on our resources,” Shahril reportedly added.
In March 2016, the company posted its first quarterly loss in five years.
The company’s CEO said at the time that the group would continue to manage the industry pressures through aggressive implementation of its initiatives to reset costs to match the low oil price environment.
He said this would involve strategic initiatives in the optimisation of the company’s supply chain and improvements to the company’s operational and organisational efficiency.
Reuters reported in March, quoting an industry source, that there would be no layoffs within SapuraKencana, “for now”.
At the end of March, SapuraKencana GE Oil & Gas Services (SKGE), a joint venture between SapuraKencana Services and GE Power Systems, was awarded a long-term service agreement by Petronas to provide maintenance services for its two forthcoming floating LNG vessels.
Elsewhere, GE Oil & Gas and SapuraKencana Well Services teamed up to deliver light well intervention services in order to unlock previously uneconomic subsea intervention activity.
The article above has been amended as it previously stated, based on a report by Nikkei, that SapuraKencana would lay off 4,000 workers. In an e-mail sent to Offshore Energy Today, a SapuraKencana representative said the number was inaccurate and that “there is no specific number of jobs cuts in existence at all”. Nikkei has amended its story as well, excluding the number stated.
Offshore Energy Today Staff