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KOTA KINABALU: Sabah Deputy Prime Ministers Bung Moktar Radin and Joachim Gunsalam want Shell to reconsider its decision to reduce operations in the state.
Bung, who is also the state’s infrastructure development minister, had some strong words for the company, saying the state government took Shell Malaysia’s decision “seriously”.
“Shell Malaysia should work hand in hand with the Sabah government to balance the economy of the state, not only taking profit from the state, but without abandoning a friend when times are tough,” he told FMT.
“I demand that Shell Malaysia reconsider the decision as there will be an economic impact on the workforce and subsequently it will have an impact on the state economy.”
According to him, Shell has benefited greatly from its upstream and downstream business in the state.
Gunsalam, who is also the state’s industrial development minister, said he was unsure of the reasons why the multinational company was cutting back its upstream operations and withdrawing 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 with them if the need arises because I don’t have the full story yet. We don’t know what their main reason is, we need to know why, ”he told FMT.
“If they are really moving, it is a huge blow to Sabah’s industries, not just the reputation of the state.”
FMT had reported that Shell would cut back its operations in Sabah and relocate its staff upstream from Plaza Shell here to Miri, Sarawak, the company’s headquarters.
Well-placed sources said staff were informed at an internal meeting last week that the company was reducing its presence in the state capital and moving to Sarawak.
Sources also claimed that staff from his previous office in Kuala Lumpur would also be transferred to Miri.
Shell Malaysia later confirmed with FMT that such an exercise was underway. However, it did not specify the number of employees involved or the main reason for the transfer.
“We will reduce the footprint of our office in Kota Kinabalu. However, Sabah remains an important state for Shell, ”the company said.
“We remain committed to our upstream and downstream operations as we contribute to the development of communities in Sabah.”
Shell’s move is seen by oil and gas and business stakeholders as a major blow to Sabah in its quest to become a powerhouse in the industry.
Currently, Shell’s upstream and downstream operations are located in the 14-story Shell Plaza, a landmark building owned by developer Hap Seng Group. It is located in the heart of the city’s central business district, with about 200 Shell employees occupying four floors.
In addition to its downstream business, Shell operates Sabah’s deep-sea offshore oil fields, namely Gumusut-Kakap and Malikai, both with a combined output of 220,000 barrels per day.
The company’s offshore operations began in 1958, when Shell drilled its first offshore well in the Sabah basin.
