SINGAPORE (The Straits Times/ANN): Royal Dutch Shell's pivot away from crude oil towards a low-carbon slate of fuels will cost Singapore 500 jobs and half of the processing capacity on Pulau Bukom in the next three years.
Shell Singapore said on Tuesday (Nov 10) that the 1,300-strong Bukom workforce will be cut to 1,100 by the end of 2021, and downsized further to 800 in another two years.
The reduction in crude refining capacity - to 250,000 barrels a day from the current level of 500,000 - will be achieved at a faster pace, probably in the next year or two, Aw Kah Peng, chairman of Shell Companies in Singapore, told The Straits Times.
The restructuring at the 59-year-old Bukom site -- the company's Asia-Pacific hub for integrated fuels and petrochemicals and home to Singapore's first refinery - follows parent Royal Dutch Shell's announcement in September to cut as many as 9,000 positions worldwide.
The payroll cuts will help shore up the supermajor's finances, which were hit by the coronavirus-driven collapse in crude oil prices and demand.
However, grim forecasts by some industry players that oil consumption may never return to levels seen before the pandemic have also prompted Shell to accelerate its plans to become a net-zero emissions energy business by 2050 or sooner.
The plan - announced in 2017 and updated more recently - entails a smaller and smarter oil-refining footprint and a switch to serving businesses and sectors that are also net-zero emissions.
The company will consolidate its global refining portfolio into six energy and chemicals parks by 2025, down from 14 at present. Bukom will be one of those six sites.
Aw said the transition at Bukom, which includes digitalisation and automation of its operations as well, has been planned in consultation with all the stakeholders including the Government and the trade union.
Munirman Abdul Manaf, general secretary of Singapore Shell Employees' Union, said the union has been working closely with the management to explore ways to help its members.
"We are appreciative that the management consulted the union early, and there has been open and transparent communication between the union and the management," he said in response to ST queries. - The Straits Times/Asia News Network
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