Izznan Abdul Jalil – General Manager, Lloyd’s Register Energy Malaysia
Izznan Abdul Jalil, General Manager of Lloyd’s Register Energy Malaysia, shares the company’s strategic focus on the Asia region and how LR is well placed to assist with Malaysia’s ageing infrastructure, as well as opportunities presented by the RAPID project.
Lloyd’s Register (LR) celebrates its 255th anniversary in 2015. What is the history of Lloyd’s Register in Malaysia, and, within this long history, what mandate have you been given to push the company forward?
Lloyd’s Register (LR), which began as a marine classification company, has a 255-year-long history and is wholly owned by The Lloyd’s Register Foundation, which ensures all profits are invested back in to the company for expanding education and training, or donating funds to charities that support communities around the world. In fact, LR is the largest charity in the UK.
LR started operating in Malaysia in 1983 as a service provider, and, in 1999, we launched a JV company, Lloyd’s Register Energy, to support work with Petronas.
LR continues to grow in the region. It supports international and national businesses operating onshore and offshore by providing the depth and scope of technical expertise that help today’s energy companies operate with confidence by managing business risk, and maximising performance of plant and facilities used in exploration, transportation and supply of energy. LR has provided assurance and risk assessment services in order to create safe, responsible and sustainable supply chains. Its work is often unseen, but is critical to the integrity of energy infrastructure.
I joined LR two and a half years ago to manage the company’s growth of its regional asset integrity business for Southeast Asia. More recently I became General Manager for Lloyds Register Technical Services (LRTS), with the primary responsibility for representing LRTS with our client base in the region.
What is the strategic importance of the Malaysian market within Southeast Asia?
Asia continues to play a key role in the global offshore oil and gas industry, and has a number of exciting projects on the horizon. Ongoing oil and gas activities are fueled by ever-increasing energy demands. With its relatively shallow waters, Asia is becoming one of the largest investors in offshore fixed platforms, and China and Malaysia will dominate demand. In total, fixed platforms will account for more than 70% of the region’s total platform CAPEX. In addition, over the next five years South East Asia is starting the development of some of the world’s major FLNG projects, located in Indonesia and Malaysia. In terms of the pipeline sector, CAPEX is forecast to increase by 35% over the next five years, with India and Malaysia investing heavily in offshore pipelines. National Oil Companies will continue to be the main focus of investment in the region, with International Oil Companies following closely behind.
The region is absolutely a key focus of our strategy. This is due to the magnitude of fabrication taking place in Asia for the global offshore industry, from both the perspective of drilling structures and individual components. We have five separate service lines within LR Energy; Inspection, Compliance, Asset Integrity, Drilling and Consultancy – that provide a range of general and specialist technical expertise.
In the case of drilling inspections, Singapore leads the world in terms of the number of jack-up rig constructions; a position it has held for several years. Some 70% of the world’s self-elevating units are made in Singapore. Our acquisition programme has placed us in a leading position as specialist providers of drilling rig inspections. And, we have strengthened our presence in Malaysia, covering Kuala Lumpur, Pasir Gudang, Labuan and Miri, Sarawak.
In Singapore, we are heavily represented when it comes to classification activities, which encompass floating offshore installations. From our Kuala Lumpur hub, we provide a number of valuable asset integrity services to the region, especially in Malaysia given the number of offshore operators. These services assess the condition of physical assets to present reliable results on their safety, reliability and operating performance. We also support our clients in the region with consultancy services, helping them to best meet industry safety regulations and standards. As an example, our expertise has been used by companies including Petronas Carigali, Total, Inpex, Nippon, Hess, and our technical insight in to key challenges and looking to future technology is enhanced by our dedicated training academy and also LR’s Global Technology Center in Singapore. China and South Korea continue to be at the core of this type of work.
Since the power of consultancy lies in leveraging expertise, we train, foster and retain talent successfully. LR does not simply want to be a service provider, we want to forge long term relationships and add value to a client’s operations. We reinforce our offering in Malaysia through the strength of our global LR energy network and capability with other business divisions including marine, rail, and LRQA.
Our latest investment announced in September 2013 in subsurface and well engineering specialists, LR Senergy, further improves our offer to industry with a comprehensive portfolio of services to the upstream sectors of exploration, production and transportation through to refinery and beyond. With extensive experience in the fields of well control and drilling equipment surveys, commissioning and assessments, we continue to support clients across the Asia region, helping operators to save time and money by improving the reliability, safety and environmental impacts of their drilling programme.
Petronas and the Malaysian government are focused on developing downstream projects and Malaysia’s downstream infrastructure, for example with the RAPID project. What business have you seen from these changes so far?
RAPID represents the largest downstream project in Malaysia’s history, and I do not see any other developments of a similar size being implemented in the next 50 years. As an essential component of the government’s Economic Transformation Program, it will move forward at pace. LR has definite targets for RAPID, specifically for our consultancy, compliance and inspection business units. Our consultancy department is looking into modeling and design appraisal, while our inspection and compliance team started preparations for RAPID-related work three years ago when the project was initially announced.
In Malaysia, what do you see as being the greatest current risk factors for your clients?
Currently 60 percent of the platforms in Malaysia are at the ageing stage. Management teams need to determine the final investment decisions relating to the fate of these assets, and consider enhanced oil recovery, revamping of wells, divestment or abandonment. To make informed decisions, asset life extension, late life and decommissioning studies are necessary. LR is well placed to help operators understand the current condition of their wells and make informed decisions on the future. As an example, LR has been working with umbrella EPCCs for the last year on an asset life extension study. The study is large in scope and aims to assess current conditions and decide on the way forward to rejuvenate and improve existing platforms.
Our long-term experience of enhancing operations and safety in the UKCS positions us to deliver the same expertise to Malaysian projects.
Malaysia is increasingly moving towards more difficult developments such as deepwater and enhanced oil recovery (EOR), which has resulted in rising costs, however our solutions help customers optimize their maintenance and inspection schedules; safely reducing downtime time and ultimately delivering cost savings.