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Interview

with Dedi Murdiadi & Pawan Sahni, Head of Section & Country Manager, DNV

16.08.2012 / Energyboardroom

DNV is obviously a well respected player in its sector, established in 1864 and with a strong international network. But as an introduction to our readers, can you briefly introduce the key milestones in the company development in Indonesia?

Since 1864 DNV’s purpose has been “To Safeguard life, property and the environment”. To this end we have developed our core competence globally to identify, assess, and advise on how to manage risk.. We do this through a unique combination of risk methodology , technical , operational and management expertise.

DNV has been involved in the Indonesian market since the 1970s and officially set up a local presence in Jakarta since 1993. Over the past few years we have been growing significantly. In 2008 we opened a branch office, in Batam, due to our growing market share with the Shipyards & Offshore Fabricating Yards in Batam . Batam’s proximity to Singapore and the main shipping routes, coupled with the availability of qualified, low-cost manpower, made it clear to us that this segment would grow in the years to come .Indonesia has always been an important market for DNV in the Oil Gas and Maritime sectors. Indonesia has made significant progress over the past 10 years and increasingly become more attractive for DNV as market.Despite the financial crisis of 2008/2009, Oil & Gas investment has been increasing with a few major upstream projects sanctioned by BPMIGAS and progressing in various stages such as the Chevron Gehem- Gendalo project, the INPEX Masela FLNG project and a host of other upstream developments.

In view of the opportunities, DNV plans to expand the local operation and work with carefully selected local partners based on business synergies and value creation. We are focusing on key projects and customers both local and international as part of our coordinated customer management strategy to bring value to our customers DNV is now in the process of setting up a new company for Oil and Gas Consulting services in Indonesia , which should be in operation by end of this year . This shall help us provide a better portfolio of services to our customers & consolidate our position in this market.

We see a number of paradigm shifts taking place in the Indonesian oil & gas industry, among others towards more challenging conditions in the East and towards offshore and deepwater. How do you see the particular needs for risk management & innovative solutions of the Indonesian offshore oil & gas industry develop today?

We are fortunate that the trend in Indonesia is moving towards our traditional strengths. In the Indonesian oil and gas industry, exploration and production activities are increasingly taking place in harsher, deeper and more remote environments i.e. from onshore to offshore. That makes operations more complex and hence increases the need for risk management and for innovative, ground-breaking solutions. DNV built its expertise and strengths in the harsh offshore conditions of the Norwegian & North Sea and is well poised to support the changing needs of the Indonesian oil & gas industry. To support this trend in South East Asia DNV has set up a Deep water Technology Centre in Singapore

Furthermore the transition towards gas and converting gas as a commodity to create value in order to build up the local economies by using it as a source for power generation and local consumers creates an environment in which our competencies are needed. We add value with our competence in Risk & Safety Management expertise The key adjustment is to build local competence and at the mean time balance with involvement of external resources where necessary to meet the market need. At the same time, we are working with complementary partners as well to supplement our effort to build capabilities in the local market.

We see a huge shift towards LNG and CNG, which is accompanied by a need to build local infrastructure and convert oil based power generation plants into gas. DNV can support this change through DNV’s Clean Technology Centre in Singapore which essentially focuses on this . Overall I feel we are in a positive situation. We are the leading provider of such services world wide & with our local presence are well prepared to support this sector in Indonesia.

How do you see the role for DNV in Indonesia in helping reinvent the oil and gas industry as it moves offshore? How are you adapting your services to better cater to the changing needs?

I would say that we do play an important role in ensuring that international safety standards are implemented in Indonesia and in helping the industry to move towards this transition smoothly. Rather than reinventing the industry per se, DNV Indonesia’s goal is to be a gateway as a knowledge-based organization.

Looking at DNV globally, the company is a renowned leader. How does this leading global role translate to Indonesia – what do you see as the company’s competitive edge in Indonesia, and what makes DNV stand out in the market?

DNV is the quality stamp to have in Indonesia as well. We work in a niche market and work with clients that know the value of our standards and services and we never compromise on quality, it even goes so far as companies ask us not to be too strict when signing contracts ! The clients see that DNV has a pro-active way of working which helps them reduce their Risk Profile. Our aim is to be customer focused & building long-term relationships. Ninety percent of our employees are Indonesians, which makes us an Indonesian company backed by International expertise this represents a major advantage in working with Indonesian companies.Also, we have a major advantage in the support from Singapore, where DNV has recently established a center of excellence to support activities in the region, especially Indonesia which is a high-growth country in the region.These two pillars allow us to differentiate ourselves from our competitors and present value-added proposals to our clients.

Recognition in this regard is very important. How is the company perceived in Indonesia among the authorities and business environment?

Companies and authorities all over the world rely on our independent assessment and non-compromising standards of quality, safety and integrity to build the trust and confidence of their stakeholders.We work with many of the major players in the Oil and Gas industry in Indonesia, both local and international in improving their HSEQ performance . We are currently running projects where in we are assisting some of them in upgrading their HSEQ practices to world class standards. We are offering them a trajectory to reach our International Sustainability Rating System as its main management system implementation, measurement and assessment tool.

To which extent do local content requirements under PTK007 and the low-cost tenders provide a challenge for DNV and how do you deal with this challenge?

Indeed one major challenge faced by most businesses is the requirement of local content in Oil & Gas industry. Since this regulation was implemented in 2009 the challenge has been to recruit and train local resources to the level of competence required for specialized areas within a short time, especially in technical risk management and knowledge related to deep water operation and floating LNG production. We recommend making the local content percentage more flexible, more so when we are talking of getting & implementing latest technological developments / practices. Obviously such experience is hard to find in the local labor market, which makes it an onerous & time consuming process during tendering.

Still through a concerted and determined effort we have succeeded in delivering services essentially with local employees . At the end of the day, the success of DNV comes down to the selection of the right people, and we adhere to a strict recruitment policy and look closely at the fundamental reasons for a candidate to join DNV. If the motivation is strong enough, we know they will stay.

Would you outline the importance of Indonesia within the regional growth strategy for DNV?

Indonesia is a major emerging economy and it is an important part of the regional growth strategy for DNV. Our outlook for this market is very positive. We hope to increase our technical staff at a rate of 20 – 25% per year and the aim is to hire and train Indonesians only. We adhere to a dual strategy of sending them out in the DNV World to get international exposure and experience and then bring them back to Indonesia. We combine this with bringing in international technical experts to help support & manage the new projects and at the same time train & share their experience / transfer their knowledge to local employees.

Where would you like to take the operations of DNV in Indonesia in the coming 3-5 years?

We have the global positions, competence and resources required to provide guidance and support in a business environment that needs technical expertise and risk management.Over the coming years, we will continue to broaden our skill base and develop competences in order to further strengthen our position & market share in Indonesia. We will also grow our capacity, even though the main focus will be on building competences to ensure that our team can always engage with clients at the right level and connect to the wider DNV solutions.As Indonesia grows further, its oil & gas industry is expected to increasingly adhere to the highest international standards. We will continue to assist the Indonesian oil & gas industry in managing business risks and adhere to high-level quality and safety standards.

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