Engen Logo: Twitter

HARARE  - Job cuts are looming at Engen Petroleum, Africa’s oil and gas company amid a shake up of the business.

Engen whose refinery in Durban has a nameplate capacity of 120 000 barrels of crude a day said it was in talks with employees to streamline the business in a bid to remain competitive.

Gavin Smith, Engen’s group communications manager said Engen which employed 3 000 people had examined its operational structure, with employees, that had resulted in certain positions being affected.

“Engen and its employees have been engaged in a company-wide initiative to create an efficient organisation that will enable more focus on the customer in order for Engen to remain competitive and drive growth,” he said.

“Engen is currently engaging affected employees that are mainly based in its corporate offices to explore a variety of alternatives that include applying for a different role within Engen or applying for a Voluntary Severance Package (VSP) in order to avoid retrenchments. This process is ongoing,” Smith said.

Chemical, Energy, Paper, Printing, Wood and Allied Workers Union (Ceppwawu) national coordinator, Jerry Nkosi, said yesterday voluntary packages had first been offered to the management level in February and had  members who were on the low level had been offered packages. 

Nkosi said the packages were attractive.

"We never thought that so many people would apply for VSP. Our duty is to preserve jobs and people have applied for packages because they have a lot of service with the company. Even if the company offers financial training for employees what will happen to them a year down the line? " asked Nkosi.

A  source within the company said employees had received letters in terms of Section 189 of the Labour Relations Act.

“While they (Engen) anticipated shedding mainly older, white workers, they have been inundated by take-up of  applications for packages for voluntary severance packages from black staffers in all categories.”

Smith declined to divulge how many employees would be affected saying “any estimate as to the total reduction in the number of jobs at this stage would be pure speculation”.

Engen operates over 1 500 service stations in 18 countries of which around 1 000 are located in South Africa and the remainder in 15 countries across sub-Saharan Africa.

Smith said petrol attendants would not be affected by the process.

“All Engen forecourt attendants are employed by our dealers and are not affected by this process.

Smith also said that the affected Engen employees would be engaged in an open, respectful and transparent manner.

Deon Reyneke trade union Solidarity deputy secretary said the company did not receive any notification from the company. 

Engen said its profit increase of R4. 983 billion for 2015 due to the significant decrease in inventory revaluation losses.

It said inventory revaluation losses were incurred in the prior year due to the downswing in the crude price which commenced toward the end of the 2014 financial year.

“In 2015 it said it had weather a stormy economic climate. A confluence of low growth, interest rate increases and high inflation affected household income. Despite some relief from lower fuel prices, weakened currencies negated the impact of the falling oil price to the consumers,” the company said in its annual report.