with Dato’ Wee Yiaw Hin, Vice President, Talisman Energy Malaysia
There has been 18% growth year by year over past 5 years in the APAC region for Talisman, and you plan 8-10% in coming years. What have been the main highlights of the past years and how is the relative importance of Malaysia in this growth?
Historically, Talisman started its operations in North America and decided to fuel its growth with international expansion into the UK, Asia and beyond. In Malaysia, we first took over Lundin’s assets. Since taking over, Talisman has made major investments and growth in Malaysia. In addition, Talisman is today present in Indonesia, Vietnam and Papua New Guinea. From the early days they recognized the tremendous opportunities that the region offered. Since then the portfolio of Talisman in the region has grown, and we believe that there is enough opportunities in Asia Pacific for IOCs to get in, in the same way Talisman did. Talisman has chosen Malaysia as a strategic country, and is determined to show its long term commitment to the country and its stakeholders like PETRONAS, Carigali and the local industry. Our goal is now beyond the current PM3-CAA PSCs which we are operating, which is the oldest asset in our local portfolio as well as the biggest one in terms of operations. We have recently acquired two exploration blocks in Sabah. Malaysia is an important part of the region, and the region plays a strong role in Talisman as a group. The CEO who came in three years ago supports Asia as a strong area of growth for Talisman.
You are the first Malaysian to head the local operations of Talisman in Malaysia. What does it mean in terms of commitment to the country and what do you want to bring to the industry?
In the relatively short presence in Malaysia, Talisman feels it has added value to Malaysia’s and PETRONAS’s goal in the development of its oil and gas resources. Talisman has successfully applied its capabilities in its PSCs assets effectively and efficiently both technically and in Cost, Time and Resources. Talisman is always committed to the development and utilization of local talent in the area it operates. The appointment is a clear demonstration of this commitment as the portfolio and long term presence to and in Malaysia grows. Moreover our regional presence increased in parallel to Asia’s tremendous economic growth, which gave us the strategic need to grow our operations base in the region and maximize local talent and content in this respect. It makes sense to build and maximize the use of local capabilities in the operations area in Asia rather than far distance resources at Corporate centre or other regions. That is why an appointment of this nature represents a big step in Talisman’s commitment to this long term objective and particularly, to Malaysia.
In Indonesia we met with Ron Aston, who was talking to us about the development of the Sageri block –Talisman’s first deepwater initiative. How will you leverage on this new gained experience to develop deepwater in Malaysia?
Talisman is interested in assets where we can help to add value. Indeed, deepwater is an emerging theme in our portfolio as we came across and acquired deepwater assets in Vietnam and Indonesia , In Malaysia, the same interest prevails and the deepwater prospects here are in Sabah. Our competence in deepwater will naturally grow as our portfolio grows in this area.
There is another shift that happened in Talisman, which is that instead of developing as a usual independent player – which is to operate smaller fields – your company’s new strategy is to focus on exploration and bigger prospects. How will this happen in Malaysia?
Indeed independents, especially Talisman, are focused in mature or smaller fields and difficult reservoirs. The deep individual and collective capabilities of our people in this area combined with our operating model build on fast decision and actions and costs effectiveness, contribute to our success here. However, a large part of capabilities in oil & gas exploration, development and production are common, irrespective of size of the assets. The integration of these capabilities and the experience globally and regional across many assets types and relationship create the opportunity for us to move to larger assets. SB309/310 is an example of this where the area coverage is substantial. There are also deepwater and High Pressure, High Temperature elements in the 2 blocks. Talisman will apply the above approach in seeking additional opportunities in Malaysia and the region both in new or existing assets held by other operators and new countries.
Another area of core capabilities where we may have opportunities in the region is unconventional gas, since Talisman has developed strong capabilities in shale gas in North America. We have good positions in Pennsylvania and are in development/production phase with strong growth plans. We also have acreage in Canada and have recently acquired large conventional assets in Poland. We can apply some of these capabilities for new opportunities in Asia Pacific.
Malaysia has the 13th proven gas reserves in the world and these reserves are three times larger than oil; nevertheless most E&Ps are involved in gas. What is Talisman’s strategy towards gas in Malaysia and South East Asia?
Talisman is already in gas in Malaysia in the PM3-CAA PSCs. There we are looking to maintain and grow development and production for the long term. In the region, Talisman also has gas asset under development/production in Indonesia. Like most IOCs, Talisman welcomes oil discoveries and development. In gas, the strategy and imperative of gas monetization must be clear before we embark on taking up new gas opportunities. In Asia, fortunately there are already existing gas market and infrastructures like gas/LNG plants and direct gas utilization customers. Incremental gas opportunities can be considered around such markets and infrastructures. Talisman has taken and is growing a sizeable new gas position in Papua New Guinea which is in the earlier stage of business development and select phase.
When meeting with Vincent Dutel in Total, he was saying that the company was bringing added value in high temperature and high pressure environment to PETRONAS, and that the NOC was looking for PSC partner who could make a difference. What is Talisman’s specific touch?
Obviously it is small and mature fields. Different reservoirs. We bring capabilities in understanding how to develop and operate multitude of reservoirs. An example of a success story is the move and growth of Talisman in the North Sea where Talisman has helped in giving the mature fields there a new lease of life in maintaining, extending and adding production and reserves way beyond the plans and forecasts of major IOCs. We have also responded well in managing the problems in contaminations such as high CO2 and Mercury present in the reservoir in Malaysia. Our deep niche capabilities in this and our operating model build on speed of decision and actions and cost effectiveness have enabled us to add value to our stakeholders. Ensuring and working towards alignment with the common objective of our stakeholders like PETRONAS, Petro Vietnam and partners, Carigali and PVEP is another strong attribute of Talisman.
As an insider to the industry, how do you assess PETRONAS’ impact on the direction taken by the industry and economy in general, and its role building the business environment in Malaysia?
PETRONAS is one of the top NOCs in the world. It is very progressive and mature. Its goals to be a major energy and oil/gas company is matched by its strategies and execution, akin to any major IOCs. Infact, in one global industry article, PETRONAS was listed as one of the ‘Seven Sisters’ from the integrated perspective of resources it holds and have access to, investments and production and as a NOC. It has broad and diverse portfolios in key businesses across the full oil/gas value chain from upstream to downstream. In these portfolios, PETRONAS recognizes and leverage/take major positions in key assets and capabilities like Gas, LNG, Deepwater, shipping/marine, petrochemicals, oil manufacturing and retailing etc. Its global and domestic portfolio and values have grown significantly over the years. PETRONAS also played its role exceedingly well in looking after national interests. As custodian of the nation’s oil/gas resources, it has safeguarded and developed the resources effectively through PSC Operators and itself via Carigali. It recognizes the importance of key technologies like LNG, Deepwater, EOR etc in the development of Malaysia’s oil/gas resources and has enabled the focus and transfer of relevant technologies. Another successful role PETRONAS has played in this is the development of industry capabilities in Malaysia. In the upstream, the current ‘world class’ state of the fabrication industry, marine and heavy lifts capabilities, deepwater capabilities etc are a few examples. Take Fabrication – the capabilities developed over the last 2 decades meant that one would never think of going out of the doorstep to carry out fabrications outside Malaysia. In fact, such ‘world class’ fabrication yards are taking major jobs from all over the world.
PETRONAS’s strategy is also aligned with the country’s in leveraging its location and relatively strong capacity of its manpower resources to be the technical and commercial hubs for many industries in the region.
In its endeavor, PETRONAS is also a fast learner. Where it is realized that operating models adopted are not effective, it is prepared to change. The industry who works with PETRONAS continues to dialogue with PETRONAS on improvements
The common objectives between the NOCs and IOCs is key for the success of the country’s oil/gas industry. I particularly feel that, IOCs should be aligned with NOCs in the objective of maximizing and growing the value of the country’s oil/gas resources and the long term development of local industry capabilities and talent. These are long term commitments and it is only through these long term strategies where both IOCs and NOCs can share the large value created from the common objectives. In turn, such IOCs will become the partner of choice. As mentioned earlier, Talisman is strongly aligned with PETRONAS and Carigali in their objectives and will continue to work as good partners. Talisman also understands and values its strong relationship with PETRONAS and Carigali
Indeed it has been clearly stated that there is a lack of human resources in the oil & gas industry. As a vice president of SPE you are especially concerned by this issue. Why is the industry struggling to find human capital and how are companies contributing to sustaining the profession?
If you look at the demographics of the oil and gas professionals, you will see that in the next five to eight years fifty percent of the oil and gas professionals will retire. We have struggled to slow this trend down in the past years in Malaysia, but it is still going to happen and it concerns me, which is why I am personally involved a lot in the field of training and human resources. The reason behind this is that in the eighties, the oil industry was seen as a sunset industry and not trendy. It is also seen as not environmentally friendly. At the same time, the “dot com” trend has arrived. This reduced the number of people who wanted to join the industry. This trend was exacerbated by the volatility and uncertainties in the oil price and the industry response by reducing manpower instead of thinking on the longer term. The industry has today started to push for more graduates to join, but there is a gap to fill between really experienced people, who are in their forties to fifties, and fresh graduates with one to three years of experience. The industry is now making sure that young people develop as fast as possible to fill that gap, but is also trying to keep recruiting whatever the economic environment may be. I personally take part in many events to excite students about the oil and gas industry for my company and in capacity as SPE senior representatives for the industry. I also encourage the young professional groups in SPE to go upstream and capture students in their early decision making for career. I also spend a lot of time with Young Professionals to help them in their accelerated development to fill the capability gaps. It is our responsibility as leaders to care for the future development of our industry.
What would be your last message in terms of your ambitions for Talisman in Malaysia and the company’s contribution to the country?
I have a very simple 3 step staircase which I use with everyone. The first step is to Deliver your plan/promise and hence maintain the value of the current business. To do this, one must be clear about the plan/promise and at any time be able to know and look ahead on where we are winning or losing in our plans. We should then be very clear and focused in our actions to make sure we manage the issues to deliver the promise
However, it will always be more exciting to be able to deliver the plan/promise in a sustained manner and also to exceed the plan. The key attributes in this 2nd step of long term sustainability and exceeding the plan is the mindset of continuous improvement. The culture and framework should be created for this 2nd step.
The last step is ‘Grow the Business’. Here, I am looking to work with a focus group of people to make step change in portfolio value and growth. Developing and executing the right strategies in the business development and commercial part of the business is key in this last step.
In all of the above, the motivation of everyone in the company to take up the challenge to move up the 3rd step is important. The challenge and accountability to motivate and move the whole organization with me up the staircase is what excites me most. In all of this, I will always highlight 2 imperatives :
-It will have to be done safely
-Alignment and relationship with key stakeholders such as PETRONAS and our partners is crucial.