KUALA LUMPUR (Oct 21): Petroliam Nasional Bhd (Petronas) today acknowledged that there have been job cuts at its Yetagun offshore gas field in Myanmar. The national oil firm said this is part of a review of its business portfolio and operations due to the current gruelling market conditions.

The job cuts were understood to have started since the first week of September, and that the number of workers at the offshore gas field will be further reduced in December, as well as in March 2021.

"Petronas is currently conducting a review of its business portfolio and operations due to the challenging market conditions. The business review includes Pertronas' upstream operations in Myanmar, whereby its subsidiary, PC Myanmar (Hong Kong) Ltd (PCML) will be undertaking cost optimisation measures for its operations," the national oil and gas company told The Edge in an email response.

"PCML has been engaging and sharing its plans with the relevant authorities in Myanmar, including the host authority, Myanmar Oil and Gas Enterprise (MOGE)," it added.

The matter came to attention on Sept 23 when Myanmar Times, quoting an unnamed Petronas employee, reported that the company had started reducing the number of workers at the Yetagun offshore gas field, as output continued to decline at the mature producing asset.

The employee also claimed that compensation had been arranged for the retrenched workers in accordance with the country's labour laws.

According to Myanmar Times, the Yetagun field produced nearly 300 million standard cubic feet (mmscf) per day at its peak, but has now curtailed production to only 60 mmscf per day.

Petronas was reported to hold a 40.9% stake and operates the gas field, while other working partners in the field include MOGE with a 20.5% stake, Thailand's PTTEP International with a 19.3% stake and Nippon Oil Exploration (Myanmar) with a 19.3% stake.

On Sept 4, Petronas president and group chief executive officer Tengku Muhammad Taufik Tengku Aziz told the media during its half-year results briefing that the company discounted any possibility of retrenching its employees despite the challenging business environment.

He, however, conceded that the group was indeed undergoing a cost-cutting strategy to address the market, and was considering salary cuts for its employees.