Hughes – Zvonimir Djerfi, President – Malaysia
Zvonimir Djerfi, President Asia at Baker Hughes, tells EnergyBoardroom about his career with Baker Hughes from Norway to Kuala Lumpur and back, details the implications of the recent merger with Halliburton on Baker Hughes in Asia and offers insight into the company’s efforts to enhance reservoir performance and prolong the life of the reservoir in Asia.
How has your background globally with Baker Hughes given you the tools to manage the challenge of directing the very diverse Asia Pacific region?
After graduating with a master’s degree in geology in Serbia, I began to work in Norwegian oil & gas service industry in 1989 and joined Baker Hughes in 1992. In Norway, I learned a great deal about the high-end technologies Baker Hughes excels in developing, and I have carried this experience with me to Malaysia. I originally came to Kuala Lumpur in 2000, where I immersed in the Asian work culture and witnessed the tremendous growth potential and vitality of the region. I now consider Malaysia and Norway to be my two homes, and my return to Malaysia in 2012 to head Asia-Pacific operations has been a truly rewarding professional opportunity.
As President of Asia-Pacific for Baker Hughes, I manage four GeoMarkets comprising 17 countries.
Asia Pacific as region holds a great deal of growth opportunities for Baker Hughes. The recent decrease in oil prices has created new challenges and opportunities for Baker Hughes to look at how the industry can better collaborate in Asia Pacific and further improve efficiencies. In Malaysia specifically, I am very interested in applying learnings for maximizing recovery in mature fields and improving efficiencies like in Norway or other parts of the world where I worked before.
Baker Hughes chose to relocate its Asia HQ to Kuala Lumpur in 2009 and has invested in excess of $100 million in Malaysian facilities and infrastructure over the past years. Why was Malaysia chosen as a base for such a breadth of regional operations?
First and foremost, Malaysia has a thriving and mature oil and gas industry. As a service provider, we need to be located where the industry exists to best interact with our clients, suppliers, and partners. Malaysia’s position as a mature oil and gas center in Asia Pacific and more specifically, in South East Asia, coupled with Petronas’ role as a leader innovating and moving the industry forward also make Malaysian an ideal base for regional operations. In addition, the country has a business friendly transparent policies, as well as political stability furthering the country’s offering as a base for operations. In Malaysia, Baker Hughes hosts manufacturing capabilities and a data centre hub, as well as a substantial amount of research and development activity, thus providing opportunities to progress and advance.
Baker Hughes and Halliburton recently agreed to combine in a stock and cash transaction valued at $34.6 billion. What synergies do you believe will be unlocked by this combining of forces?
Our shareholders and authorities will decide whether the deal is to be ultimately approved, but in my opinion numerous synergies exist between Halliburton and Baker Hughes. Positive strengths exist in both companies, with each bringing different capabilities in different regions. If the merger does go through, we will be a stronger organization in Malaysia and elsewhere, as a global oilfield services champion that can better serve both employees and customers around the globe.
In 2009, you told Focus Reports that “anything we can do to enhance reservoir performance and prolong the life of the reservoir is our mission.” Can you expand on how Baker Hughes’s services are uniquely tailored to help local operators increase recovery rates here in mature Asian basins?
By studying and looking at the complexities of reservoirs, Baker Hughes’ technologies can prolong the life of mature fields. As a key example, Baker Hughes signed a 23-year contract with Petronas in 2013 for a joint-field development in the offshore Greater D18 field. This collaboration presents an opportunity for both partners to learn and share with the industry on how to extract as much oil as possible from one field.
The agreement came after a collaborative two and a half-year field development study that used Baker Hughes’ reservoir evaluation capabilities to analyze the geology and reservoir attributes of the mature and compartmentalized D18 fields. Production was revitalized in target wells with two integrated production enhancement programs, and further analysis helped establish a comprehensive field development plan.
The partnership also represents a significant milestone in expanding Baker Hughes offering with reservoir development in addition to our traditional products and services portfolio. In fact, this agreement has been the first of its kind globally for Baker Hughes, and we have now implemented a similar modeling strategy in other areas, including Mexico, the US and other areas of the Asia Pacific.
Baker Hughes is at its heart an innovation company. In this sense, how does Baker Hughes integrate Asia into its global R&D efforts?
Baker Hughes always aims to improve how we service our client’s needs and we have been learning and innovating for over 100 years. At times our clients know exactly what technology is suitable, while in other cases our team analyzes and anticipates the best way to meet client demands by working alongside clients and anticipating their objectives. In an area such as enhanced or improved oil recovery, we are able to employ suitable technologies through collaboration to exceed our clients’ needs.
Last year, Baker Hughes launched the Baker Hughes Petroleum Education Centre at the UTP. How does Baker Hughes encourage young graduates here in Asia to join the Baker Hughes’ team and retain this talent once formed?
The launching of the Baker Hughes Petroleum Education Center at UTP is a great opportunity to excite students and recent graduates about the opportunities that exist within the industry and specifically at Baker Hughes. Our physical presence on the UTP campus means that students can concretely see the equipment and activities of Baker Hughes, thus encouraging them to make the leap from study to participation in the industry. This center also aims to encourage students to innovate to help develop new products and technologies and to think about how they can contribute to moving the industry forward. Our partnership also extends to the Baker Hughes Yayasan UTP Scholarship and sponsoring 10 UTP students annually to visit Norway, as a part of a series of exchanges that Baker Hughes fosters between Norway and Malaysia. We are a global company with local content and are committed to creating career opportunities for local talent, such as in Malaysia via our partnership with the UTP.
How far do you think Malaysia is from reaching its ambition of becoming an oil & gas hub by 2020 as per the Economic Transformation Program?
In my view, Malaysia is a leader within the industry and has the perfect geographic location and infrastructure to further its positioning as epicenter within the region. The government creates economic opportunities and offers incentives in terms of taxation to promote the establishment of companies locally. Having friendly competition with neighboring countries like Singapore and Indonesia also promotes better results.
Baker Hughes is pleased to contribute to Malaysia’s path to becoming an oil and gas hub, and we maintain a solid commitment to the region. We collaborate both with government bodies and universities to this end, while also investing substantially in research and development and in manufacturing plants within Malaysia. Such interaction creates a mutually beneficial social contract, and we are happy to be a part of Malaysia’s journey.
You began your career at Baker Hughes over 20 years ago and have since occupied a variety of positions in Norway, Malaysia, North Africa and the United States. What makes the company special to you and explains your exemplary loyalty to Baker Hughes?
Working at Baker Hughes has ensured that I wake up with a smile on my face every day. Throughout my years with the company, I have had the opportunity to meet amazing people worldwide and to interact with decision makers who have a global impact. I am proud to have contributed to Baker Hughes over the past twenty years, and I hope to continue to promote positive change and innovation, thus creating opportunities for future employees.
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