The Malaysian offshore and drilling company UMW Oil & Gas cut 300 jobs to cope with decreasing oil prices and stagnation in the industry. The affected employees are mostly in contract staff in rig operations, but not affecting company capacity. UMW Oil & Gas is looking for alternatives for more decreases of the workforce in relation with the group-wide cost-cutting exercise, which it said was necessary to address operating costs. Further cuts in the group’s workforce will be based on the flow of jobs going forward. Currently five of UMW’s eight drilling rigs are currently awaiting contracts.
In addition, the other cost-cutting measures of UMW include a reduction in inventory and capital cost, re-negotiation with vendors and restructuring of company processes. The cost reduction measures has resulted in more than 4.5 million USD savings in the first quarter of this year, but not yet reached the target of 6 million USD.
“Our work force now is 736 after cutting 300 contract staff. We used to have almost 1,000 permanent and contract staff. We are going to try to reduce a bit more but focusing more on contract staff. We don’t want to touch permanent staff as much as possible”, said the president of UMW Oil & Gas, Rohaizad Darus. “We did not renew their contracts when they expired, mostly on the operation side, as when the rig is not operational, we have to let go contract staff”, added he.
UMW Oil & Gas is currently bidding for 628 million USD worth of jobs for its fleet of drilling rigs. Out of the 22 tenders it is currently participating in, 48% are for domestic contracts while the remaining 52% are in international waters.