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Interview

Peter Ong See Kong & Kay Ong, MD & MD Designate, Oilfield Services and Supplies, Singapore

28.07.2014 / Energyboardroom

Kay Ong, MD, OSSPeter Ong See Kong, Managing Director and Kay Ong, Managing Director Designate, describe Oilfield Services and Supplies’ manufacturing capabilities and the specialist equipment they provide. Building on growing interest in the region, the business is expanding both geographically and physically, as it upgrades its facilities to produce equipment more efficiently. Both the managing director and managing director designate describe their consistent commitment to quality and reliability. 

 

You are one of the largest drilling services companies in Singapore. What would be the main thrust of your growth in the region?

Peter Ong See Kong (PK): The main achievement since starting the company 15 years ago would be the establishment of eight workshops. Singapore is the headquarters for OSS, but we have two workshops in India, and another in Thailand which will cater specifically for the interests of Chevron. Our business has been shortlisted by Chevron to open up a further shop to cater for their eight rigs in the area. They will soon increase this figure to fourteen.

Kay Ong (KO): Chevron undertook an audit on our company and were impressed with our capabilities. This is why they are supplementing their own two in house production workshops by using OSS services.

PK: More recently too, we have established another shop in China. We are performing well in that location. Indonesia too, has been a site for expansion, with premises in Jakarta now operating. We are pleased to be there, as there is a similar demand for services as to Singapore.

Lastly, the company is also working in Malaysia, with operations at Labuan, East Malaysia.

In future, we would hope to expand into Myanmar, and hope to get there ahead of the competition. I have recently returned from a business trip engaging with partners there, and gained a good deal of useful information about market conditions.

Do you consider yourself a Singaporean pioneer then, in expanding into nearby markets? 

PK: We have a manufacturing plant here in Singapore which is producing tools, including our ‘dumb iron’ staple tools.  The city here does not have any oil and gas operations underway. Most of the tools are then exported to other locations. The business here also engages in a significant amount of repair work; but this must be done quickly. OSS reputation for quality and fast turnaround time is what attracts our clients in this respect.

The need for speed also  motivates the business to locate itself in nearby markets- to offer companies speedy access to our tools without the need for extensive import/export proceedings.

KO: Singapore is a wonderful hub; the infrastructure of the port is excellent. There no oil drilling operations in Singapore obviously, hence the need for export.

PK: Fifty years ago Singapore became a hub for the oil and gas industry, sending tools to where they were required in the region. Following operations, units were returned to Singapore for repair. This cannot happen to the same extent, however because of local content requirements in neighbouring countries such as Malaysia. For companies to drill there, they must create equipment there. This is something that operating companies simply must deal with. It is not appropriate to rest on ones’ laurels. Singapore can have additional expenses associated with working here; we must remain competitive to stay ahead.

OSS intends to retain most of its manufacturing here in Singapore. The satellite offices will primarily undertake repair work.

KO: Having a shop nearer to the client saves significant costs which would be incurred in transit. The shorter lead time has been very well received by clients such as Schlumberger and Halliburton.

PK: These companies, operating in remote locations would have to increase their inventories substantially if they did not have our repair facilities close at hand. In this manner, our proximity to the client again creates further efficiencies.

How is your new expansion at your Tuas plant coming along?

PK: Currently we are hearing from clients that they require further support in their manufacturing facilities. The current shop is 60,000 square feet- but we wish to capture the tubing and casing business and so envisage significant increases in the scale of our operations.

This will enable us to ease some of the tension our customers are experiencing, reducing waiting times for parts and the like. If we are able to acquire the land we need, then we will be able to provide services at a higher rate.

KO: This increase in size of operations was precipitated by OSS’ efforts to attract new clients- drilling contractors such as Aban, Transocean, SeaDrill, Ensco, and the like. The tools that these clients will need serviced includes the likes of very long pipes. We hope to see this develop to be one of our core products.

With regard to product development, we are eager to expand into advanced tooling, producing MWD tools for example, beyond our traditional in dumb iron products. For Halliburton, over the last two years, we have been producing this sort of equipment. Singapore is among the top few global centres for oil & gas equipment manufacturing and service; that which I believe is the reason why Halliburton set up their flagship completion tools headquarters here in Singapore – they need local support, expertise and commitment to fabricate parts for their equipment.

PK: Singapore has very good tax incentives to attract companies to locate here. The presence of Halliburton’s relocated manufacturing centre here in Singapore provides OSS with great opportunities.

What has been the formula to the consistency of your growth over the years?

KO: This business is more like a family; we allow employees to have responsibility for their own work.

PK: The company has consistently been profitable; over the 15 years since its foundation I have continually sought to build the business up. The key to this has been developing the company’s human resources. We have a good team of people- across our positions.

Staff know the quality, value and quantity of the product that leaves the shop floor. My strategy is to make the company successful; and reward the staff handsomely for helping generate that success. For the past eight years we have initiated a bonus scheme supporting our staff; as a result we have a very low staff turnover.

KO: The principle issue we have with regard to human resources is access to work permits, which can prevent staff from returning to Singapore. However, at times this has proved to be a blessing in disguise, as our satellite offices are now staffed by individuals who have gained experience in our Singapore facilities and subsequently returned to their homeland.

PK: I originated in Baker Hughes; they value their staff there, and this experience very profoundly shaped my view of human resource management. One cannot be greedy, but must be fair.

The growth of the company has been enormous. Despite this, one other important note with regard to OSS is that it remains a truly family business. I have entrusted some of the following generation with key responsibilities in the enterprise, and they are delivering as I hoped.

How is your company pairing the need for innovation with the need for high health and safety standards?

KO: We are planning to boost our manpower up to into the 90s by the end of the year. Innovation will come from our staff; and we will endeavour to maintain the stringent health and safety culture inherent in the company as they join.

PK: We have four new local recruits, straight from university who are joining us. We are hiring top prospective engineers, and will train them as management trainees. Following this, they will be sent to our satellite offices. Their skills there should improve efficiency and generate novel and original solutions in these premises.

KO: We also work very closely with clients such as Halliburton. Our relationship with them is so strong they are willing to test our new products that we offer. With them, and the oil majors, we are in a position where we can sit down and devise solutions with them.  We are considered specialists- an example of this would be our recent HF6000 product. This was a solution for problems involving premature wear on equipment in hot wells in Indonesia. Following implementation of our stabilising solution in the well, our clients were so happy that whenever they drill in a hot well, they have mandated that OSS’ technology is involved.

Where we wish to obtain new technologies entirely, we have bought over companies. One example is that of Brenco, an Australian surface engineering company. They have notably augmented our capabilities; something we can now offer to the client.

PK: We seek to establish OSS as a ‘one-stop-shop’. This really benefits speed of delivery for clients.

Mr. Kay Ong; given you are now managing director designate, what are your key strategic priorities for the company in future?

KO: Developing technologies and expanding the scope of technologies that we offer. The company will also be positioned to take advantage of burgeoning demand by gaining market share while focusing on increasing productivity and efficiency. Sustainable growth will be championed through focusing on operational excellence, developing our competencies, and expanding regionally and into untapped markets.

 

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