KUCHING: Industry players such as Petroliam Nasional Bhd (Petronas) and Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) will continue to strive onwards despite the challenging environment in the oil and gas (O&G) sector.
According to Muhammad Zamri Jusoh, vice president of Malaysia petroleum management, Petronas, the industry faces some harsh realities: a prolonged period of challenging oil prices, scarce capital investment; related cost volatility and a lower productivity that is only adding to that
toll.
“However, future global demand for energy will require us to continue producing crude oil and natural gas for decades to come.
“This requires sustaining a significant capital investment in major oil and gas projects,” Zamri said in his speech at the Sail Away officiating ceremony for the Malikai Tension Leg Platform (TLP) Sail Away Ceremony at MMHE West, Pasir Gudang, Johor.
Zamri highlighted that new technology, efficient management and competitive scoping will help to improve the industry’s performance.
He noted that therefore, in spite of inclement forces and trends, the industry can and must deliver more.
“We need to make tough, across-the-board improvements in capital efficiency. To have that breakthrough impact on the industry as a whole, we have to fundamentally change our behaviors in the supply chain.
“Our situation can only be relieved through stronger relationships between us as partners. We must forge new links in our supply chains on the basis of deeper understandings of our respective businesses,” Zamri said.
He cited Malikai is an example of what partnering in the truest sense of the word means.
“The Malikai Project has been designed, built and will be operated by Malaysians contributing significant local content and capability development.
“Once operational, Malikai will continue to contribute materially to Sabah and Malaysia’s economy through direct jobs and indirect benefits, in addition to revenues,” he affirmed.
Meanwhile, Wan Mashitah Wan Abdullah Sani, acting chief executive officer (CEO) of MMHE stated that in the current low oil price scenario, MMHE’s business cycle of struggle, survival and sustainability continues.
“Together with our clients, partners and industry peers, we are operating under tough conditions and below capacity given the protracted global oil price decline.
“Having said that, we are striving to leverage on the strengths, resources and infrastructure derived from this project as well as past projects to ensure the safe delivery of future projects entrusted upon our partners and us,” she said in her speech.
On the performance in the deep-water industry, Shell Malaysia chairman, Datuk Iain Lo, remarked that the deep-water business is under pressure as it is more costly compared with other segments in the O&G sector.
“In order to make deep-water projects work, firstly the reservoir has to be good, this means it has to be big and prolific so you don’t need so many expensive wells.
“The technology has to be reliable because interventions in deep-water is expensive. The design has to be robust to be able to cater for uncertainties but not so robust that we can’t afford it.
“And the people who operate the facility have to be experienced to ensure safe and reliable operations.
“Of course, the high oil price will help but as we have seen in the last 24 months, this is not something we can rely on,” he said.