Sarawak’s Gas Grab Triggers Petronas Panic: 5,000 Jobs Axed as ‘Golden Goose’ Bleeds!

KUCHING, June 7, 2025 – Petroliam Nasional Bhd (Petronas), Malaysia’s national oil giant, is slashing 5,000 jobs—roughly 10% of its workforce—in a desperate bid to navigate a stormy sea of global challenges, including plummeting crude oil prices. Deputy Prime Minister Fadillah Yusof emphasized that the restructuring is unrelated to the ongoing tussle with Sarawak’s state-owned Petroleum Sarawak Bhd (Petros), but not everyone is convinced.

Speaking at the Aidiladha sacrificial event at Taman Hussein Mosque in Kuching today, Fadillah said the decline in crude oil prices has forced Petronas to rethink its entire operation. “I’m planning a meeting with them to get a briefing on the matter and to ensure that the number of layoffs can be reduced, if not avoided,” he told reporters, signaling a push to soften the blow for workers.

On June 5, Petronas president and CEO Tan Sri Tengku Muhammad Taufik Aziz announced the downsizing, citing “challenging operating conditions” and falling crude prices as key drivers. The affected employees, numbering around 5,000, will be notified in stages throughout 2026, he added, framing the move as critical to the company’s survival. “If we don’t do it now, there will be no Petronas in 10 years,” Taufik warned.

Gas Grab

Meanwhile, a joint declaration on May 21 between the federal and Sarawak governments aimed to clarify roles, affirming Petronas’ responsibilities under the Petroleum Development Act 1974 while respecting Sarawak’s gas distribution laws. The agreement ensures existing liquefied natural gas (LNG) contracts with third parties remain intact, with both federal and state laws co-existing to guide the industry.

However, controversy erupted in Shah Alam as Sarawak PKR leader Iswardy Morni pointed fingers at the federal government’s decision to grant gas distribution rights to Sarawak under the Malaysia Agreement 1963 (MA63). He alleged the move, driven by political pressure, has destabilized Petronas, risking its long-term viability. “This is GPS killing the golden goose,” Iswardy charged, referencing the 2017 formation of Petros, which he claims created overlapping authority and fueled federal-state tensions over resource control.

Petros threatens Petronas’ dominance

Critics argue that Sarawak’s push for greater control via Petros threatens Petronas’ dominance, potentially undermining Malaysia’s economic backbone. As the dispute simmers, the layoffs have sparked fears of a broader fallout, with families bracing for impact and questions swirling over whether political maneuvering or global market forces are truly to blame.

Will Petronas weather the storm, or is this the beginning of the end for Malaysia’s oil titan? The nation watches as tensions—and stakes—rise.

Business News