Shell Singapore said that it is all set to repurpose its core business and reduce its crude processing capacity at its Pulau Bukom oil refinery by half as the company moves towards its plan of a low-carbon future.
The oil and gas company said on Tuesday (10 November) that it will reduce the workforce capacity at its Pulau Bukom site from 1,300 to 1,100 by end of next year, and cut further to 800 by 2023.
Shell explained its journey of transformation in Singapore under a 10-year plan on Tuesday, and noted that it is set to witness a number things, which include its focus on expanding the company’s solar footprint and network of electric vehicle charging options.
The company also said that it is looking into the production of products that are still useful after its energy transition, like biofuels and specialities such as bitumen. If that’s not all, Shell is also researching on the usage of different raw materials, or feedstocks, such as recycled chemicals.
The chairman of Shell Companies in Singapore, Aw Kah Peng, said: “Today, our extensive presence in Singapore’s energy sector carries with it a carbon footprint”.
She added, “Our businesses in Singapore must evolve and transform, and we must act now if we are to achieve our ambition to thrive through the energy transition. Our decisive action today will help Shell in Singapore stay resilient and build a cleaner, more sustainable future for all of us”.
As for its operation at Pulau Bukom, which is its largest refinery, Shell said that it will reduce its crude refining capacity to 250,000 barrels of oil per day from the current 500,000.
As such, this brings the total refining capacity cuts by Shell in recent months to 571,000 barrels per day, or just slightly more than a fifth of its capacity globally.
“Bukom will pivot from a crude-oil, fuels-based product slate towards new, low-carbon value chains,” Shell Singapore said in a press release.
It continued, “We will reduce our crude processing capacity by about half and aim to deliver a significant reduction in CO2 emissions”.
In order to do so, Shell pointed out that this will affect the manpower in the company.
“As Bukom transforms and becomes smaller and smaller, the resizing of operations will result in fewer jobs but more highly skilled job as digitalisation and automation progress,” it noted.
The oil and gas company said that while the 500 job cuts will happen in the course of the next three years, the earliest staff movement related to the reorganisation will only take place in the last quarter of next year.
Help to be given for employees to look for other employment
Ms Aw said to The Straits Times (ST) that the company understands that these job cuts is difficult news and is informing its staff way ahead of time.
“The impacted employees will get a retrenchment package that is above that which is provided for by the tripartite guidelines. This includes a comprehensive set of support initiatives, for example, extended in-patient medical coverage for up to a year following retrenchment, professional outplacement services, and a learning subsidy, where applicable,” she said.
Besides finding ways of possible redeployment opportunities within the company, Shell Singapore also noted that it will work with external partners like NTUC’s e2i Job Security Council to help affected employees find new employment.
Munirman Abdul Manaf, general secretary of Singapore Shell Employees’ Union told ST that the union has been working closely with the management to look for different ways to help its members.
“We are appreciative that the management consulted the union early, and there has been open and transparent communication between the union and the management,” he noted.
Its parent company announced in September this year that it plans to remove up to 9,000 jobs globally, or more than 10 percent of its workforce.
“Singapore is a key hub for Shell. These decisions show how determined we are to remain a part of Singapore’s energy future, just as we have been partners in economic development over the decades,” said Mr Huibert Vigeveno, downstream director and member of the executive committee of Shell.
He added, “The transformation of our business in Singapore, and in particular our largest refinery on Pulau Bukom into one of our approximately six energy and chemicals parks, is crucial to Shell’s ambition of becoming a net-zero emission energy business by 2050 or sooner, in step with society and our customers.”
Plans to reduce carbon emissions by a third
Shell revealed that, in Singapore, it aims to reduce its carbon emissions by nearly a third within the next 10 years, and this will be done by focusing on three pillars.
The first is the company’s plans to repurpose its fundamental business by concentrating its manufacturing assets to create more energy transition resilient products.
The second is its plans to offer low-carbon solutions to its customers in sectors like power, mobility, shipping, aviation and trading.
The last pillar that it will focus on is to partner with key stakeholders to “bring about sustainable change”.
Apart from plans to grow its solar footprint and network of electric vehicle charging options, Shell Singapore’s LNG bunkering joint venture, FueLNG, will also be scale up with the arrival of Republic’s first bunkering vessel in late 2020.
Additionally, the company will also work with customers in Singapore to offer carbon neutral solutions.