The Malaysian oil giant, PETRONAS, is reportedly planning significant layoffs in 2025 as it braces for revenue hits stemming from the escalating power of PETROS, Sarawak’s state-owned oil and gas entity. The move raises pressing questions about the company’s future, the federal-state power balance, and the looming battle over Malaysia’s energy resources.
According to Scoop.my, PETRONAS’ decision to reduce its workforce is linked directly to its diminishing control over Sarawak’s lucrative gas reserves. This follows Sarawak’s bold regulatory steps, including its landmark Gas Distribution Ordinance 2016 and the recent Sarawak Gas Distribution (Amendment) Ordinance 2023, which effectively transfer authority over natural gas distribution from PETRONAS to PETROS.
Sarawak’s Premier Strikes a Defiant Tone
Sarawak Premier Tan Sri Abang Johari Openg has been vocal in defending the state’s actions, emphasizing that Sarawak’s control over its natural resources is a constitutional right. “Sarawak has always sought fairness in resource distribution. PETROS is not here to compete but to manage what is ours by right,” said Abang Johari in a recent statement.
Sarawak’s growing control over its gas sector has not only cemented its position as a key player in Malaysia’s energy landscape but has also triggered a wave of economic confidence, with PETROS securing lucrative international partnerships.
Federal Government Caught in the Crossfire
The federal government, under Prime Minister Anwar Ibrahim, finds itself walking a tightrope. Anwar has reaffirmed the Petroleum Development Act 1974 (PDA74) as the legal foundation for PETRONAS’ rights to Malaysia’s petroleum resources. Yet, the Sarawak government’s relentless pursuit of autonomy continues to challenge this federal statute.
Political analysts suggest that any major concession to Sarawak could unravel decades of centralized energy policies and embolden other resource-rich states to follow suit. It also means PETRONAS is a victim in this crossfire.
“The impact to GDP is more than RM 1 billion assuming a 20% headcount reduction in PETRONAS, as retrenched employees will struggle to find jobs in Malaysia” said an analyst who declined to be named.
Economic Imbalance and Peninsular Consensus
The creation of PETROS and Sarawak’s increasing autonomy have sparked heated debates in Peninsular Malaysia, with many perceiving it as a move that could widen the economic imbalance between the federal government and resource-rich states like Sarawak.
A viral post from StratCommX on X (formerly Twitter) captured the sentiment:
“If PETROS thrives and Sarawak claims more of its revenue, what’s left for the federal government? This is not just Sarawak’s victory—it’s a loss for Peninsular Malaysia, where other states already struggle with development deficits.”
Many Peninsular Malaysians argue that this shift could deprive the federal government of essential revenues that are redistributed to less wealthy states in the Peninsula. Critics fear this could exacerbate existing inequalities, with some calling for a more balanced approach that preserves federal cohesion while respecting Sarawak’s rights.
The Fallout for PETRONAS
PETRONAS, facing dwindling authority in Sarawak, is scrambling to recoup its projected losses. Internal reports indicate that the company’s 2025 restructuring plan involves not only workforce reductions but also a strategic retreat from certain upstream ventures in Sarawak. This signals a potential shift in focus toward regions where PETRONAS retains stronger control.
Critics, however, question the wisdom of such drastic measures. While cost-cutting might stabilize short-term financial losses, the layoffs could erode PETRONAS’ technical expertise and global standing, especially in a competitive energy market pivoting to renewables.
What’s at Stake for Malaysians?
The PETROS-PETRONAS saga has far-reaching implications. For Sarawakians, it symbolizes long-overdue economic sovereignty. For Peninsular Malaysians, it threatens to redefine the delicate financial equilibrium that sustains federalism. And for PETRONAS employees, it’s an unsettling sign of turbulent times ahead.
As 2025 approaches, one thing is clear: the battle over Sarawak’s gas reserves is not just about energy. It’s about power, identity, and the future of Malaysia’s economic landscape.
