The company will reduce headcount by more than 5,000 people and all those affected will be informed in stages through next year, Petronas president and group CEO Tengku Muhammad Taufik Aziz said in a briefing here today.

It will also freeze hiring until December 2026, he said.

“The margins are shrinking, the fields are getting smaller,” Tengku Taufik said.

“It will be challenging to meet dividend targets” with current oil prices, he said.

The oil price slump — coupled with declining output from its older assets — will pose a challenge for Malaysia’s government, which derived 10% of its revenue from Petronas in 2024.

The energy producer not only anchors the nation’s energy sector, but also plays a key role in funding infrastructure, education and social programmes through dividends and taxes.

Petronas sets its budget based on Brent crude oil priced at around US$75 to US$80 per barrel, Tengku Taufik said.

The global benchmark is currently trading near US$65, down about 13% this year, as trade tensions threaten global growth and OPEC+ restores production.

Petronas’s net income slid 32% in 2024 after a 21% drop in 2023.