Malaysia – Dato Ahmad Suhaili Idrus, Senior VP, O&G SEA
The senior VP for oil & gas for Southeast Asia at AECOM discusses the group’s contribution to Malaysia’s oil and gas hub aspiration, as the company has increased its focus on the energy sector in Malaysia. AECOM is transforming to become a serious oil & gas EPC player in Southeast Asia, offering holistic services across the entire life-cycle of projects.
Could you please give an introduction to AECOM and explain where the company is currently focused in Malaysia?
AECOM Technology Corporation is a global provider of professional technical and management support services to a broad range of markets, including transportation, facilities, environmental, energy, water, oil and gas and government. With the acquisition of URS Corporation in October 2014, the combined company has nearly 100,000 people serving our clients in over 150 countries. AECOM is a premier, fully integrated infrastructure and support services firm.
Specifically in Malaysia, AECOM has over 40 years of local experience with more than 700 dedicated staff across Kuala Lumpur, Johor Bahru, Penang and Kuching.
Several iconic projects that we are or have been involved in include Penang Second Bridge, Johor Baru – Woodlands Rapid Transit System, Kuala Lumpur River of Life, Kuala Lumpur Centre of Sustainable Innovation, Phase 2 Extension Works of Sawah Raja Treatment Plant, Ramsar Wetlands, Johor, amongst others.
What could you tell us about your background and what were your main priorities when you took over the reins of the office in January 2014?
During my 25 years at Royal Dutch Shell, I gained valuable experience managing the downstream oil business, oil products, chemical marketing, oil trading, gas to liquids (GTL) and liquified natural gas (LNG). As a result, I have built a considerably wide network within the industry in Malaysia and the region across the entire value chain.
In addition to the private sector, I have gained experience working in the public sector. I spent four years at the Performance Management & Delivery Unit (PEMANDU) in the Prime Minister’s Department and a year at Iskandar Regional Development Authority (IRDA). PEMANDU’s main role and objective is to oversee the implementation and monitor progress of the ambitious Economic Transformation Program (ETP) and the Government Transformation Program (GTP) launched in 2010. Here, I gained an appreciation of the inner workings of the state and federal governments, the opportunity to widen my network within the public sector and contribute to the government’s transformation journey.
I also spent a considerable period in Shell and Petrofield on project development for LNG and GTL which provided a good appreciation of the challenges for mega projects. It also gave me access to the global EPC contractors.
In terms of priorities, my first task was to develop a strategy and plan for AECOM in the oil and gas industry in South East Asia for 2014. In order to achieve this, I recruited experienced resources to make an impact on the brand and services that AECOM can offer. I have also completed a study for AECOM’s entry into the EPC sector of the oil and gas industry and secured strategic wins in the engineering design and project management / construction management (PMCM) areas.
What is the strategic importance today of AECOM’s Oil & Gas business in Southeast Asia to the global operations and how would you describe its contribution to the company’s revenue stream and performance?
AECOM is present in more than 150 countries around the world and we are focusing on strategic growth areas, one of which is oil and gas.
Within Asia, Malaysia is identified as one of the focus strategic growth markets due to clear vision and strong government leadership, stable political climate, good infrastructure, diligent and skilled workforce and competitive. In the oil and gas sector, the Malaysian national oil company Petronas is one of the world’s most successful oil and gas companies. Petronas has announced a US$100 billion capital expenditure program that spans five years starting from 2012. Moreover, the Malaysian government is focusing on efforts to enhance production from existing oil and natural gas fields and to advance exploration in deep water areas deploying new technology.
In the downstream sector, Petronas has committed to invest around USD28 billion in RAPID (Refinery and Petrochemical Integrated Development) in Pengerang, Johor due for completion in 2019. Against this backdrop, it is only natural for AECOM to devote capital and resources in the oil and gas sector in Malaysia and South East Asia.
AECOM has a long history in the oil and gas sector in Malaysia and South East Asia particularly through our environment business line which includes environment and social impact assessment studies both offshore and onshore, HSE (Health, Safety & Environment) and Process Safety studies. We have a reputable environmental practice in Malaysia, which is part of AECOM’s global network of environmental professionals of about 5,000 people. Our environment team is leading the way in Asia Pacific for AECOM in this sector currently; and we have experienced success clinching contracts with national and multinational oil and gas companies.
We are also working hard to secure engineering design services for onshore infrastructure and balance of plant areas in oil and gas projects and also in the related project management and cost management for these projects in the region.
I have defined a three pillar growth strategy for oil and gas business in the region; firstly we aim to win related tenders in both public and private sectors, secondly, to diversify our activities in the value chain through strategic collaboration with strong partners and thirdly by increasing focus in emerging markets such as Myanmar. We have the capacity and the capability in key areas globally and anticipate that oil and gas will be one of the key contributors to our business in the region in the next three years.
Price remains an important element when tendering for contracts. As a new comer to the oil and gas market in South East Asia, which factors drive projects in the sector: price or reputation?
Overall price is still the primary deciding factor in tenders understandably; this is natural as commercial viability takes precedence once the technical requirements are met. However, reputation is relevant across the entire value chain: product, technology and services.
For projects that do not require licensed technology or services, price will be the primary determinant e.g. refinery distillation unit, storage tanks; for projects that require licensed technology and services, reputation especially performance and reliability comes into play e.g. floating LNG, gas to liquid, catalysts.
As the senior vice president, Oil & Gas for AECOM’s South East Asia’s business you are based in Kuala Lumpur, Malaysia. In your opinion, could Malaysia achieve its ambition to become an oil and gas hub for South East Asia?
I believe the country can achieve its objective to become an oil and gas hub for the region by 2017. Malaysia is a significant oil and gas producer and is strategically located between a major oil producing region (Middle East) and the world’s fastest growing economies (India, China and ASEAN). Malaysia’s oil reserves are the 3rd highest in Asia-Pacific (APAC) and the country is the 2nd largest exporter of LNG in the world. More importantly, Malaysia has an established footprint in mega oil and gas projects in upstream, LNG, gas processing and distribution, refinery, petrochemicals, engineering fabrication and oilfield services. In other words, Malaysia can offer the full range of projects and services across the entire chain.
Over the years, the oil and gas industry has fostered a strong culture of technical excellence, entrepreneurial drive and innovation mind-set. Petronas has been instrumental in encouraging a steady growth in the number of local companies involved in oil and gas industry. Overall, Petronas has been extremely active in taking the lead by for example hosting the Asia Oil and Gas conference. Also, Malaysia was accorded the honour to host the first Offshore Technology Conference (OTC) in Asia in March 2014, a signal that Malaysia is one of the leading hubs for oil and gas services in the region.
Malaysia enjoys a politically stable environment, led by a democratically-elected coalition Government committed to the development of its economy. In line with the country’s ambition to elevate the country to developed-nation status by 2020, the Economic Transformation Program (ETP) was launched in 2010. The ETP’s targets for 2020 will be achieved through the implementation of 12 National Key Economic Areas (NKEAs). One of the NKEAs is oil and gas, which sets up to achieve an annual growth rate of 5 per cent in the sector up to year 2020, transforming Malaysia into a regional oil trading and storage hub as well as ensuring long-term energy supply security to the domestic market.
As a matter of fact, the World Bank ranked Malaysia the 12th most competitive economy in the world for doing business, in the Ease of Doing Business Report 2013; ahead of Singapore, Hong Kong and South Korea. Institute for Management Development (IMD) has also ranked Malaysia 5th in its latest World Talent Ranking which assesses a country’s ability to develop, attract, and retain talent for companies that operate here.
What has kept you motivated all these years?
That is a good question. Prior to joining AECOM, I have been working in the oil and gas industry for 27 years. AECOM is a premier, fully integrated infrastructure and support services provider with strong ambitions for growth in oil and gas in the region. I have taken on this challenge to help grow the company and help achieve its goals in the oil and gas sector. I like to envision that in a few more years, the AECOM brand will be more visible in oil and gas regionally and our services will be sought after for quality and excellence.
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