KUCHING: Sabah and Sarawak remain key to Shell Malaysia’s operations since its inception in Miri in 1910. As the oil and gas group celebrates its 110 years in upstream this year, Shell vice president for Malaysia and Philippines Ivan Tan spoke to The Borneo Post on Shell’s enriching journey to date.
“Shell has come a long way since the successful discovery of the nation’s first oil on Canada Hill, Miri, on August 10 in 1910. The momentous oil discovery in Miri started the influx of a skilled workforce and turned Miri into a bustling town,” he said in an exclusive interview.
Tan is also the managing director for Sarawak Shell Bhd (Sarawak Shell) and Sabah Shell Petroleum Company Ltd.
“Shell began exploring offshore Sarawak in 1960 and discovered Sarawak’s first offshore field (Baram) in 1963. Shell invested in the development of infrastructure in Miri.
“In those days, Sarawak Shell constructed housing, office buildings, repair and maintenance workshops, electricity, water and material supplies, comprehensive land, sea and air transport, medical care and its own communication system. These facilities were then extended to the public over time.
“Shell grew together with Miri. We are privileged to have played a part in building an energy industry eco-system in Miri and Sarawak, which continues to prevail today.” The growth of Shell extended to Sabah in 1963, Tan said, which led to its first oil discovery offshore Sabah at Erb West in 1971.
In 2003, Shell ventured into deep-water development through the Gumusut-Kakap field which has been in production since 2014.
Next, Shell developed the Malikai deep-water field which came onstream in December 2016.
Malikai is the country and the region’s first tension-leg platform.
“Today, we are the leading international energy company in Malaysia and are entrusted by Petronas to operate approximately 200,000 barrels of oil and two billion cubic feet of natural gas per day,” he enthused.
“We are also proud to have recently developed the first Solar powered Wellhead Platform in Malaysia as part of Shell’s aspiration to move into cleaner and innovative energy solutions.
The platform is designed for low power consumption, reducing the power consumption by 90 per cent compared to other facilities.
Building up the community with skills
With all these responsibilities at hand, it was natural for professional and technical skills required for the oil and gas industry to surge in demand as the sector began to grow in Sarawak.
This created a large demand for Malaysians to be equipped with these technical and professional skills.
“In the 1980s, in support of the country’s aspiration for upskilling and development of technical expertise, Sarawak Shell developed a five-year career and succession plans for over 500 Malaysian senior staff,” Tan detailed.
“One of the main aspects of these plans is the identification of employees who would most benefit from overseas assignments. A total of 87 senior staff members were sent overseas for the first time in 1987.
“Over the years, we have seen a significant number of female talents venturing into technical roles and currently, we have about 28 percent of female representation in leadership roles in the upstream business.
“Today, Shell partners with vocational schools through Welding Training Programmes like Projek LINK; Operations technicians’ Programmes with colleges like TAS Institute in Sabah; also, cross-sharing of technical knowledge with universities through its immersion programmes.”
Projek LINK, an industrial welder training programme was conceived by Shell alongside Miri Vocational College in 1989 with the ambition to develop local technical skills through raising the standard of welders to international level through a certification programme.
The programme has been expanded to Bintulu and Kota Kinabalu.
Projek LINK in Miri has produced over 1,000 competent welders who had entered the realm of employment with ease in oil and gas, shipbuilding and fabrication and other heavy industries.
“Over 80 per cent of the graduates are employed in Malaysia as well as overseas soon after their graduation. This has added the numbers of skilled human capital in Malaysia, “ Tan said.
In 2016, Shell introduced its LiveWIRE programme to Sarawak. This programme enables budding entrepreneurs grow their respective businesses and be sources of employment for their fellow people.
In doing so, they also drive innovation and growth to the diverse industries applicable to the Sarawak economy.
To date, 111 participants have completed the programme, with 20 winners having received start-up funding and mentorship from Shell to pursue their businesses.
Some winners have even achieved global recognition from Shell for their trade.
Besides that, the company also continuously embarks on social investment programmes in the state, focusing on STEM education, road safety and community development.
Pandemic no deterrent to operations
On an important note, companies worldwide have been taken off-guard with a pandemic that has caused turmoil to operations down the value chain.
“At Shell, we are fortunate to start from a position of strength as we confront this global pandemic,” Tan revealed.
“We have faced tough times before in the energy industry.
“We have learnt to safeguard the safety of our people and our assets. We have taken urgent action to preserve cash in order to build our financial resilience, as we do not how long this business climate will persist.
However, we will do this in a composed manner with a view for the longer-term.”
“We have an extraordinary team at Shell, and I am inspired to do my best to lead the company through this unprecedented business climate so that we come out of this stronger,” he said.
“In the short term, we are focused on our care for the community and our people, our business continuity and on staying resilient. In collaboration with the government and Petronas, we introduced health and safety measures for our offshore locations to reduce the risk of exposure and transmission of Covid-19 to our offshore staff.
“We have been able to maintain safe and reliable production of oil and gas, as an essential sector to the country.
We continue to build financial resilience as we have seen reduced demand for energy products from the Covid-19 pandemic and a corresponding decline in oil prices.
“We have asked a lot of our people and I am amazed and grateful for their resilience and resourcefulness.” Shell has been a partner in the country’s progress by providing energy to sustain people’s lives for close to 130 years.
Besides upstream, the company also has a strong footprint in the downstream business with more than 950 retail stations across the country and a gas-to-liquids plant in Bintulu, which pioneered the conversion of natural gas to ultra-pure liquid fuels, lubricants, chemicals, and solid waxes .