PETRONAS AT A CROSSROAD: Between Headwinds and Tailwinds

By: Saleh Mohammed

Introduction: The Golden Goose Faces a Test

For half a century, PETRONAS has stood as a symbol of national pride and industrial might. Since its establishment in 1974, it has not merely been an oil company, it has been Malaysia’s economic backbone, a global brand, and a steady source of national revenue. But now, the goose that has laid golden eggs for generations of Malaysians finds itself at a challenging crossroads. Amid shifting global energy dynamics, internal reviews, and restructuring decisions, questions are being raised about its direction, sustainability, and purpose.

Recent announcements of workforce reduction and cost rationalisation mark a pivotal point in the company’s journey, forcing the nation to reflect on how we should support, manage, and future-proof one of our most valuable assets.

The Rise of a National Champion

PETRONAS was built on a simple yet profound principle: that the oil and gas resources of the nation must benefit the people of Malaysia. Its success has been remarkable. Today, it operates in over 100 countries, and its presence extends beyond hydrocarbons into education (Universiti Teknologi PETRONAS), branding excellence, and leadership in energy transition.

Listed on the Fortune Global 500 since 1997, Malaysia’s only representative, PETRONAS has consistently provided more than 15% of national revenue (2015–2020), affirming its role as a cornerstone of the economy. The dividends it pays to the government, combined with taxes and petroleum cash payments, have helped fuel development across the country.

Yet, even giants must adapt to survive.

A Jarring Announcement: Restructuring and Workforce Cuts

Just days before Hari Raya Aidiladha, PETRONAS CEO Datuk Tengku Muhammad Taufik issued a sobering announcement. Over 5,000 employees, 10% of the workforce, would be let go. Promotions and hiring have been frozen until the end of 2026. The rationale? Headwinds in the form of declining oil prices, shrinking margins, and aging oil fields.

This “right-sizing” targets administrative and support roles, referred to as “enablers,” whose numbers reportedly exceed the industry average. While some news reports indicate that most of the affected positions are contract-based, the optics and timing of this move have sparked confusion and concern. Are we losing critical talent in an effort to preserve balance sheets? Are contract workers being disproportionately burdened?

Moreover, it remains unclear whether senior management compensation and perks are also under review. Surely, any meaningful transformation must start at the top.

Navigating the Energy Transition: A New Identity?

While the layoffs drew headlines, they are only one part of a broader transformation effort. PETRONAS is not standing still. The company is pivoting toward renewable energy, hydrogen, and green mobility to align with the National Energy Transition Roadmap (NETR) and Malaysia’s Hydrogen Economy & Technology Roadmap (HETR).

A recent paper, “Balancing Stakeholders’ Interest and Sustainability: PETRONAS’ Strategic Response to The Global Energy Transition”, published in January 2025, highlighted the company’s investments in decarbonisation, sustainable materials, and digital innovation. The long-term vision is promising: create jobs, attract investments, foster environmental sustainability, and reinforce Malaysia’s leadership in the energy transition.

These are noble ambitions. But they stand in tension with the immediate reality of job losses and revenue challenges.

Sarawak, Sabah, and the Federal Conundrum

Adding complexity to PETRONAS’ journey is the fraught regulatory relationship with Sarawak. The Salam-Patawali deepwater project, worth RM13.7 billion, saw ConocoPhillips exit quietly, reportedly due to uncertainties in the federal-state partnership dynamics. The tug-of-war between PETRONAS and Petros (Sarawak’s state oil company) sends worrying signals to investors, despite Prime Minister Anwar Ibrahim’s repeated assurances of resolution and cooperation.

Why then, months after claiming the issue had been settled, are we still reading about negotiations on “basic principles”?

PETRONAS must be allowed to focus on its operational and commercial goals without getting mired in political uncertainties. The delays and regulatory ambiguities not only hurt investor confidence but risk undercutting Malaysia’s regional leadership in energy innovation.

Financial Pressures and Dividend Dilemmas

Financial data reveal the pressure cooker PETRONAS is in. Net profits fell from RM80.7 billion in 2023 to RM55.1 billion in 2024—a 32% drop. Yet, despite lower earnings, the company is still expected to pay RM32 billion in dividends to the government in 2025, the same as last year.

This raises a fundamental question: Should PETRONAS alone be burdened with stabilizing public finances, especially when the government is reducing subsidies and calling for belt-tightening?

If PETRONAS is undergoing a comprehensive internal review, then surely the federal government must do the same. A leaner PETRONAS should be matched by a leaner, more transparent public sector.

Beyond Numbers: A Human and Institutional Legacy

PETRONAS has always been more than a business. It is an institution with a culture of excellence, a commitment to national service, and a workforce of talented Malaysians. Any transformation must preserve this legacy.

Employees, whether contract or permanent, are not just “enablers”; they are the lifeblood of PETRONAS. Just as the Food and Agriculture Organization (FAO) reminds us that geese are intelligent creatures capable of adaptability and social bonding, PETRONAS too must be smart in its choices, balancing operational efficiency with loyalty to its people.

The recent cuts must not be an admission of past inefficiencies, but rather a careful, transparent reconfiguration for the future. It must not become a political tool or fall victim to expediency.

Towards Petronas 2.0: The Road Ahead

The notion of “Petronas 2.0” as a nimble energy superstore, diverse, digital, and decarbonised, is appealing. But such a vision must be rooted in strong leadership, sound governance, and clarity of purpose. The company’s Operational, Commercial and Growth Delivery Excellence model must be reinvigorated, not shelved. Expansion plans for LNG sales to China and Vietnam must continue, even as new energy frontiers are pursued.

And above all, transparency must prevail. The public deserves to know how much is saved through the right-sizing, and how those savings will be reinvested, for growth, for jobs, and for sustainability.

Between Winds of Challenge and Wings of Hope

In business, as in life, headwinds are inevitable. But so are tailwinds. PETRONAS must navigate both. It has the intellectual capital, institutional resilience, and national goodwill to emerge stronger.

Let us not treat PETRONAS as a cash cow to be milked dry or a political pawn to be moved at will. Let us manage it like the intelligent goose that stops traffic at zebra crossings—aware, agile, and wise.

If Malaysia is to thrive in the next 50 years, PETRONAS must not just survive but soar.

Let us support this goose that has laid the golden egg for us all. May we never be the ones who broke it.

What say you?