Jim Siow – General Manager, PT Technics Offshore Jaya, Indonesia
The GM of PT Technics Offshore Jaya in Indonesia explains the reasons behind the recently formed Joint Venture with PT Elnusa and highlights the advantageous characteristics of Batam as a location. He also emphasizes the commitment to local content throughout the company’s operations and the resulting benefits for both the company as well as the local community.
PT Technics Offshore Jaya recently formed a Joint Venture with PT Elnusa. What was the thinking behind this alliance?
The joint venture (JV) with PT Elnusa was formed based on the fact that it will bring mutually beneficial synergies in the Indonesian market. PT Elnusa, acting as Pertamina’s engineering arm, has had no exposure to EPCC for gas compressors, in which we specialize. This JV has been formed to transfer knowledge, combine our skills and win contracts together. I am confident that this will be a very successful partnership which will excel in the Indonesian market.
Some 75 percent of Indonesia’s oil and gas reserves are located offshore; what is your strategy to tap into these opportunities?
We see the potential of Indonesia’s offshore oil and gas reserves, which was an additional reason behind forming the JV with PT Elnusa. For us, it is about realizing the opportunities that have arisen through the need for floating production storage and offloading vessels (FPSO) and floating storage and offloading (FSO) vessels.
Another opportunity we recognize is the extensive natural gas reserves of Indonesia and the potential it bears not only for us, but also for Indonesia itself to become an exporting country once again! Floating liquefied natural gas (FLNG) solutions will be needed as the exploitation of Indonesia’s reserves will advance. Currently, we are working on enhancing our staff in Batam with Indonesian expertise, as we are committed to developing domestic capabilities in FLNG projects. We will fully tap into this vast business potential and help Indonesia fully exploit its national potential through infrastructure development.
For us to excel in this specific area we need to meet two conditions: Firstly, we will need enhanced space as our facility in Batam is not yet large enough. The JV with PT Elnusa will provide us with great benefits as we will be able to overcome this challenge by combining our capacities. Secondly, we will need to enhance our staff in Indonesia with manpower with this specific background. Although we are strongly committed to local content and developing our Indonesian staff, we will be able to source needed foreign expertise from within the country. Therefore, we will be able to overcome the challenges of these projects and be able to anticipate them to the full satisfaction of our clients!
What was the rationale of establishing the Batam facility, given the proximity of the Singapore facility of PT Technics Offshore Jaya?
Young Singaporeans’ interest in manual labour jobs has declined significantly in recent years. Given the challenge of its small population, it could no longer sustain our human resources needs. In addition to the human resources challenge, we were not able to enhance our physical capacities, as space in Singapore is finite. Overall, Singapore could not sustain the immense growth we anticipated.
Batam was the natural choice to overcome these challenges: it is located only 30 minutes from Singapore by ferry, it is a free trade zone, offers a large population and a cheap yet high quality labour force. Establishing the affiliate in Batam offered us the additional opportunity to further tap into the Indonesian market and realize its full potential for us. Since the government started to lay more emphasis on local content, we have excelled in this prosperous market. PT Sucofindo, the superintending company of Indonesia, certified us for our high quality and strong commitment to the Indonesian market and community after we had completed a variety of projects with an exceptionally high level of local content.
How do you assess the attractiveness of the Indonesian market overall?
Although the low commodity price has had a negative impact on Indonesia’s oil and gas market, I am confident it will grow again to be one of the strongest oil and gas nations in South East Asia. Indonesia re-joining OPEC is a good sign of the times ahead; the membership will enhance Indonesia’s capabilities to fully exploit its immense oil and gas reserves and supply its growing energy demand.
The new government led by President Joko Widodo does its best to develop Indonesia itself and part of this development is to raise local content. This offers great opportunities to us, as we have always been committed to a high local content and are therefore prepared to meet these requirements and realize upcoming turnkey projects!
Would you say local content is the key to success in Indonesia?
The Indonesian government has proven itself to be unflappable on this specific issue—and I believe they’re right in being so! Indonesia’s population counts approximately 250 million people and is growing. It is of upmost significance that this huge population is sustainably employed in order to develop the whole country. Especially in a significant industry such as oil and gas, where numerous employment opportunities exist, the government needs to ensure that its population gets the chance to realize these opportunities.
PT Technics Offshore Jaya is the only Batam based company that is shortlisted in a current tender for an EPC contract for setting up a power plant. How do you go about explaining your capabilities for this project and why will you win the contract?
A company that has the capabilities of engaging in engineering, procurement and construction (EPC) in the oil and gas industry is fundamentally capable of EPC activities for a power plant. Although the projects differ and are in different sectors, the essentials stay the same. The specific reason we advanced that far in the tender is that we offer experience and high quality paired with an unusually high level of local content. 99 percent of our employees are Indonesian, we always source locally if possible and thus provide more value to Indonesia than any of our competitors. Our focus is not limited on winning tenders and being awarded with contracts, we also always consider how we can support the development of Indonesia; a responsibility we take seriously.
PT Technics Offshore Jaya also offers extensive services surrounding your core products. One of the recent additions was the option to lease or rent equipment. How well was this service received in Indonesia?
PT Technics Offshore Jaya embarked in this specific business niche approximately a year ago, and it has proven itself a full success ever since. It met the needs of Indonesian clients who, in times of industry uncertainty imposed by the low commodity prices, needed innovative service solutions to sustainably operate their business; we filled this supply and demand gap. This specific service allows our clients to utilize our innovative equipment without the risks of heavy investment and with lower operational costs. Currently our pipeline in this segment is growing to become our next cash cow.
How significant is the additional service portfolio to your core products in Indonesia?
Our additional service offerings benefit us and our clients and alike. They enable us to become the one stop solution provider for our clients which enables us to communicate with them more easily and allows us to control the complete process; ensuring reliability of the set schedule paired with our high level of quality. If other services providers enter the project, the project is exposed to potential miscommunications and possibly contrasting perceptions of quality, health and safety. This imposes certain challenges which can be effortlessly avoided by having only us involved. In a nutshell: our services offerings allow the projects to be a full success for our clients and ourselves.
How do you assess the need for health and safety measures in your projects to your client’s full satisfaction?
Health and safety is the one crucial aspect in every project. It is the dimension that cannot be neglected as there is absolutely no excuse for not holding it to the highest standards. As a company, it is our responsibility to our employees and clients alike to always focus on health and safety as the basis for every single process within our projects. Despite it being our social responsibility, it also ensures quality, productivity, reliability of set schedules, and thus fulfils the needs of our clients to the fullest extent. At PT Technics Offshore Jaya this is the creed we live by!