Bung, who is also state infrastructure development minister, had some strong words for the company, saying the state government viewed “seriously” the decision by Shell Malaysia.
“Shell Malaysia should work hand in hand with the Sabah government in balancing the state’s economy, not only raking in profits from the state but not abandoning a friend when times are hard,” he told FMT.
“I demand that Shell Malaysia reconsider the decision as there will be an economic impact on the workforce and subsequently have an impact on the state’s economy.”
According to him, Shell has benefitted tremendously from its upstream and downstream business in the state.
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.
“If they are really moving out, it’s a big blow to Sabah industries, not just for the state’s reputation.”
FMT had reported that Shell would be trimming its operations in Sabah and moving its upstream staff from Plaza Shell here to Miri, Sarawak, the company’s upstream headquarters.
Well-placed sources said staff were told at an internal meeting last week that the company was downsizing its presence in the state capital and moving to Sarawak.
The sources also claimed that staff from its upstream office in Kuala Lumpur would also be transferred to Miri.
Shell Malaysia later confirmed with FMT that such an exercise was being undertaken. However, it did not specify the number of staff involved 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.”
Shell’s move is seen by oil and gas, and business stakeholders as a big blow to Sabah in its quest to become a powerhouse in the industry.
Currently, Shell’s upstream and downstream operations are housed in the 14-storey Plaza Shell, a landmark building owned by developer Hap Seng Group. It sits at the heart of the city’s central business district here, with some 200 Shell staff occupying four floors.
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.
The company’s offshore operations started in 1958, when Shell drilled its first offshore well in the Sabah Basin.