Shell to Cut Hundreds of Singapore Refinery Jobs
(Bloomberg) -- Royal Dutch Shell Plc will slash oil-processing capacity at its largest refinery, resulting in hundreds of job losses over the next three years.
Shell last month singled out the Pulau Bukom manufacturing complex in Singapore as one of six key refining and chemical hubs that would remain core to its business amid a companywide reorganization. Yet the site won’t escape the overhaul, with plans announced Tuesday to cut capacity there by half.
The Anglo-Dutch major, which set out bolder climate goals in April, has said it sees oil-product consumption falling as the world transitions to a cleaner energy mix. The impact of the Covid-19 pandemic has only served to accelerate that shift, with refining capacity far outstripping demand for fuels.
“A refining industry that was intended to accommodate a certain level of global demand must now contend with what is expected to be a significantly lower amount of it,” Rob Smith, a director at IHS Markit, said this week. “What was expected to be a long, slow adjustment has become an abrupt shock.”
Shell will progressively make changes in the configuration of the Pulau Bukom refinery over the next three years, a company spokesperson said. Downsizing the 500,000-barrel-a-day plant will mean reducing staff to about 800 by the end of 2023 from 1,300 now, the spokesperson said.
Many European energy companies are embarking on a transformation to become cleaner and greener, with fewer oil assets by the middle of the century. At Shell, the changes will bring as many as 9,000 job losses by the end of 2022 -- with cost savings of as much as $2.5 billion.
The energy giant plans to eliminate all net emissions from its own operations and the bulk of greenhouse gases from fuel it sells to customers by 2050. The company has started shutting refining capacity in the U.S. and will either sell or close energy and chemical plants that aren’t the right type or in the right location, Chief Financial Officer Jessica Uhl said last month.
© 2020 Bloomberg L.P.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.