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Shell Sabah Meltdown

Shell’s decision to check in, check out unfair
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Published on: Sunday, October 25, 2020

SHELL announced on Oct 15, 2020 that the Plaza Shell Office in Kota Kinabalu will be closed with a relocation of all Sabah staff to Miri new Headquarters in 2021.

The Kota Kinabalu office was set up in November 2015 with promises of Shell’s significance presence, strategic partnership and offer of measurable progress for Sabah. This change of commitments, a sad truth on change of event draws much reservation, suspicion and unveils unprecedented break of promises from Shell to Sabah, its people and communities.

The well set and progressive 200 Shell staff occupying four floors of the 14-storey Plaza Shell, a distinguished landmark in Kota Kinabalu being strategically located in the city’s business district may see the last of its pivotal presence very soon. Their lives, sadly, may never be the same again.

The O&G entity in Sabah comes under Sabah Shell Petroleum Company which is a separate entity from Sarawak Shell Berhad. Sabah Shell manages all Sabah platforms and handles Malaysia’s largest and only Deepwater oil rigs comprising of Gumusut-Kakap and Malikai.

The Gumusut-Kakap produces 150,000 barrels of oil daily whilst Malikai produces 65,000 barrels per day. At such massive daily production capacity Shell’s presence lends very significant importance to the State’s economical, social, technological and political well-being and especially as a business entity in the O&G sector. 20pc of Malaysia’s production comes from these oil wells.

The multi-faceted importance arises with its existing presence offers far-reaching benefits and opportunities to the Sabahans. With such significant contribution from the State, it is unprecedented for Shell to move out of Sabah and leave the State, its people and large array of stakeholders in such a distress state and at a disadvantage.

With grievous impact expected from this untimely move and demise of the Sabah O&G’s importance to the local community, this valiant call is made to our honourable YAB Datuk Seri Hajiji Mohd Noor, Chief Minister of Sabah to seriously question the change of promises by Shell to Sabah and their decision to close the office and move the office to Miri, Sarawak.

The following justifications as to why Shell should continue to stay in Sabah are as follows:

1. Both Deepwater oil rigs, being the country’s only and largest are in Sabah waters.

2. These oil rigs generate huge revenue for Shell and GDP for the Sabah state.

3. A sizeable number of Sabahans are engaged by Shell with families in Sabah.

4. Technological, social, economic and other benefits would be compromised and lost forever with the move out of the State.

5. Severe disruption of O&G Supply Chain provided by more than 200 local vendors would lose in business opportunity once moved out of the State benefiting directly the Sarawakians instead.

6. This change of event would cost a potential loss of business to the tune of RM 40 million and hitting hard on some 3000-local workforce.

7. Indirect cost of loss of properties rentals, investments, services, hospitality and ensuing services would be humongous to the tune of RM 24 million per year.

8. Sabahans are required to apply Sarawak Work Permit placing them at a disadvantage and precarious position with possible rejection from the Sarawakian authority as the preference is always for local Sarawakians to fill such essential posts.

9. Sabah needs to safeguard its MA63 rights with resources tapped for the benefits of the Sabahans and not on the opposite end.

10. Shell’s reasons for moving out is ill-supported and lack solid justifications.

11. Sabah should not continue to be taken advantage of its limited resources again and again. Why are we allowing it to happen again?

We make this desperate call to YAB to exercise your esteemed wisdom and exert your timely intervention against such an unprecedented decision by Sabah Shell Petroleum Company to move log, stock and barrel out of Sabah.

With the Deepwater oil rigs still positioned in Sabah’s water it is our sovereign right to safeguard, protect our resources and ensure our interests are not unduly and unfairly exploited.Our Sabah’s soul, our Sabah people, and our beloved State must be protected. It is our very right to do so.

O&G Community of Shell Sabah

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