Shell Singapore to cut 500 jobs over three years amid Pulau Bukom reorganisation

SHELL Companies, the local subsidiary of Royal Dutch Shell, is set to cut 500 jobs from its local workforce over the next three years as the group makes changes to its largest refinery, on Pulau Bukom. This amounts to some 38 per cent of the refinery's current staff size.(see amendment note)

A Shell spokesperson told The Business Times that the company will go from 1,300 staff to approximately 1,100 by the end of 2021, and down further to some 800 employees by the end of 2023.

The earliest staff movement related to the reorganisation will take place in the fourth quarter of 2021, added the spokesperson.

In a statement on Tuesday, Shell said Pulau Bukom will pivot from a crude-oil, fuels-based product slate towards new, low-carbon value chains. This is the company's latest step towards its overarching ambition to be a net-zero emissions energy business by 2050.

It said: "The changes that will have to take place in our businesses will have a corresponding effect on our staff numbers. As Bukom transforms and becomes smaller and smarter, the resizing of operations will result in fewer jobs, but more highly skilled jobs as digitalisation and automation progress."

The company said this move would halve its crude processing capacity, and could deliver a "significant reduction" in carbon dioxide emissions.

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Some "significant changes" in Pulau Bukom's refinery configuration will require "increased investments", such as a site-wide digitalisation programme, as well as a study of products that are resilient to energy transition such as biofuels. Shell is also looking at different future feedstocks that are based on greater circularity and renewable raw materials.

"Today, our extensive presence in Singapore's energy sector carries with it a carbon footprint. 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," said chairman of Shell Companies in Singapore Aw Kah Peng.

This round of job cuts at Pulau Bukom closely follows parent company Royal Dutch Shell's announcement in September that it would cut as many as 9,000 jobs amid a company-wide restructuring into low-carbon energy operations.

In August, the oil major announced that the Pulau Bukom site will pilot its virtual-manufacturing technology. Named Digital Twin, the new technology is set to be completed in 2024. Shell said then that it was grooming a pool of technical talent to support this digital transformation.

READ MORE: Singapore refineries starting to cut output amid pandemic pains

Amendment note: An earlier version of this article said that 500 jobs was about 38 per cent of the company's local workforce. The company has clarified that this figure is only for its refinery on Pulau Bukom