High-flying oil workers now scraping by amid layoffs

According to a Forbes report last October, today’s 'great depression' in the oil market has claimed more than 200,000 jobs worldwide, with 2 per cent of the casualties from Malaysia. — File pic
According to a Forbes report last October, today’s 'great depression' in the oil market has claimed more than 200,000 jobs worldwide, with 2 per cent of the casualties from Malaysia. — File pic

KUALA LUMPUR, Jan 11 — Haqim Nawawi thought he had it all when an international oil services firm poached him from a biochemical company and hired him as a logging-while-drilling field specialist with a monthly salary of more than RM10,000.

But just 11 months into his dream job, the 26-year-old took a phone call last June that would crush all hopes for a comfortable life. Now, he is jobless and makes a scanty side income of RM540 a month teaching secondary school students maths or science.

“When they hired me I was so happy,” Haqim told Malay Mail Online. “I even bought a house”.

Haqim is now based in Kuantan, Pahang, to help his parents manage their homestay business.

“But now, well, they just called me to the office and told me [that I was going to be laid off]. But I sort of expected it. We had heard about it and when I got the call... I knew it. I was laid off in June last year and I have been jobless since,” added the 26-year-old who graduated with a biochemical engineering degree from the International Islamic University of Malaysia.

Haqim’s plight is a microcosm of the nightmare that has hit the oil and gas industry following the prolonged slump in crude oil prices that began in late 2014.

According to a Forbes report last October, today’s “great depression” in the oil market has claimed more than 200,000 jobs worldwide, with 2 per cent of the casualties from Malaysia.

While the trail of devastation the oil price crisis has left may not be too visible when presented in numbers, Haqim’s anecdote provides a chilling glimpse into the post-retrenchment lives of those who have fallen victim to the oil market’s massive spending cuts.

As many of those laid off have skills limited only to the industry or non-mainstream fields like marine technology or biochemistry, landing new jobs will be an uphill battle.

The sudden loss or lack of income means more debt, especially for people with high financial commitments like Haqim who was once among the top income earners.

“I went for so many interviews. In various different fields. I even asked for a job in electrical engineering in Johor. But I haven’t heard from them until now.

“My side income from tutoring is about RM540. I charge students RM50 per head. But my mortgage is about RM600 plus. I never expected this to happen of course,” he said, adding that the severance package he received was barely “helpful.”

According to workers in the oil and gas industry, companies will likely begin another cycle of retrenchments this year as the oil price is expected to hover around US$25 (RM109.45) a barrel throughout 2016.

This has frightened workers and even high-performing staff who told Malay Mail Online that nothing can guarantee their employment as the industry has never experienced a rout of this magnitude since the energy crisis in the late 1980s.

“I am scared, to be honest. In one division alone, they have fired 200 staff. Among those fired are the regional HR (human resources department). He was replaced because he was paid too high. So to cut cost, they had to replace him,” said an employee of a local oil contractor.

Skilled foreign workers were the first to be laid off due to their high salaries, according to a source who works for another local oil services contractor. Although this gives Malaysian staff temporary relief since their lower salaries means their employers can still afford to keep them, uncertainties remain.

“There is this great sense of uncertainty. If the market continues the same way, then I am not surprised if there will be another round,” said a staff member of a geoscience company that provides seismic data acquisition and other services in the oil and gas exploration and production business.

“And for me, I work in seismic data. It won’t be easy for me to look for another job, so it can be scary,” he added.

The layoffs among service providers like these reflect the far-reaching effects the current oil glut crisis has on the energy industry, stretching all the way to the bottom of the supply chain.

Since most major oil players were forced to halt new oil field explorations as the crude oil price bust took a toll on revenue, smaller suppliers have been affected by the lack of demand.

But amid the gloom, some have found opportunities, such as the proposed merger between Halliburton and Baker Hughes, the world’s number two and number three oil field services companies respectively.

Industry observers said the planned merger was a smart way to adapt to the changing landscape. Another method was a staff restructuring exercise to better manage resources that often involved relocation to foreign countries, forcing workers to leave family and friends behind.

“Our manager relocated a few of us… not just a country — a few others are relocated to a few other countries too. For now, the engineers that remain in Malaysia are just enough to support the wells that we are drilling in the country. Half of the total engineers working in Malaysia are now all being relocated,” said a field engineer with a US-based oil service provider now relocated to a nearby foreign country.

Many of the oil and gas company employees that Malay Mail Online interviewed spoke on condition of anonymity for fear of losing their jobs.

It is understood that oil service providers like Baker and Hughes have laid off half their drilling teams in Malaysia. Haqim was one of the casualties.

According to a report by energy research firm I-Research last month, the companies that topped the retrenchment list in Malaysia as of last November were Malaysia Marine and Heavy Engineering with 2,000 staff, followed by Shell Malaysia at 1,200. The report also stated that Petronas had laid off contractual staff, though no figures were provided.

Sources in Petronas told Malay Mail Online that the national oil company has retrenched most of its contractual staff. Petronas could not be reached for comment.

Crude oil prices slipped about 10 per cent at the close of markets Friday after a sharp rise in US stockpiles of petroleum products, pointing to a continued glut on the market.