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Interview

with Khalis Abbas, General Manager – Malaysia, Indonesia, Brunei, SPT Group Malaysia

25.03.2010 / Energyboardroom

In Malaysia trust and references are very important to do business. Who was the 1st company to trust SPT in Malaysia?

SPT has been doing business with PETRONAS for quite a long time through our offices in Norway and Perth, but the increase in demand made us open an office in Malaysia mid 2007. So the first one to trust us was PETRONAS.

What is the competitive advantage of SPT’s software?

We are focusing on two niche technologies: flow assurance and reservoir optimization. SPT is the market leader for flow assurance through its flagship software OLGA and its expertise on flow assurance. In terms of reservoir optimization, we provide a tool called MEPO, as well as consultancy services.

You have flagship software: OLGA, OLGA online, MEPO and Drillbench. What is the application or the project that really represents SPT’s capabilities in Malaysia?

Indeed, we have these four softwares, but we also recently acquired other companies and have now three additional softwares on offer. Our main focus is now still on flow assurances, that we provide to PETRONAS, ExxonMobil or Shell, as well as to engineering companies that do simulation on conceptual design and use OLGA for this. We also see emerging interest in reservoir optimization.

SPT is involved with most of the “big players”, but how would you assess the importance of smaller contractors to SPT’s business?

This is an investment for these companies, and smaller players need to justify the return on investment. Therefore instead of acquiring the software, they hire us as consultants. Their needs have increased as PETRONAS and its PSCs are now concentrating on deepwater development, where flow assurance is extremely important. SPT has, as a software provider, a preferred relationship with operators and help them build their competencies and establish flow assurance study centers. By using our tool OLGA, they also have the support of our experts working with them in their offices.

How easy is it for companies to integrate SPT’s software within their normal operations?

Deepwater and subsea developments are not like the ones in shallow water where one can manually calculate or use different league software. In deepwater or subsea development, the multiphase behavior of the fluid is becoming critical and the main concern is to transport that in an optimum manner as far as cost and safety are concerned. Without OLGA it would be extremely difficult to estimate how this would be transferred. Most of the deepwater and subsea development in Malaysia have been designed using OLGA.

SPT has developed its solutions at a moment when many markets become mature. Do you see your tools as a last resource for your clients, or something that should be used from day one?

It is something that they all the way from the planning stage, to the design stage and all the way through the operational stage. In the planning stage, companies do a lot of conceptual design to know what would be the optimal manner to transport the fluids from the reservoir to the surface. Once they develop this model, the can reuse it to operate the fields where a lot of constraints can be investigated using this tool. For example many fields in Malaysia face wax problems, and our tools can provide “insider information” on how to handle the wax. So our software can be used throughout all the lifecycle of the field. We like to be involved by giving input for the decision making process. Companies would decide not to do some investments because of OLGA results. In the positive way, OLGA results helped companies to put together the necessary investments. Our clients are then very grateful for our support in helping them save money or make the best investment possible. We like to be with the customer to actually show the value of our tool and capabilities. The value of our tools is not represented by its price but by its outcome.

How do you set the strategy for the Malaysian branch?

We have been doing business with Malaysian companies and especially PETRONAS for a while, and have seen a growing demand since we started. I joined in 2007 and it was very compelling for SPT to open an office at that time. Today the Malaysia office is covering not only Malaysia but also Indonesia and Brunei, and it will become the head office for Asia Pacific. This strategic move has several reasons: first the growing demand in the country; then the business environment with available resource and active partners; there are also a tremendous number of opportunities in Malaysia to develop our activities. There are few deepwater projects with location outside Malaysia but still in APAS, with design work done in Malaysia. Some projects are billion dollar investments, but the entire design work is being done in Kuala Lumpur, thanks to the facilities here that support the industry, as well as PETRONAS’ support and the one of the government. SPT is using it to provide expertise locally and regionally.

Many Norwegian companies are present in Malaysia and the community is developing strong tight with the local business sphere. How does SPT capitalize in this close business relationship?

I am impressed by the close relationships that INTSOK, the Norwegian embassy and PETRAD have with the Malaysian business community and especially PETRONAS. They are very active in promoting Norwegian technology, organizing events and showcases and these are great venues for SPT to demonstrate its capacities. We always participate in these initiatives and they always connect us to the right persons, creating fruitful cooperation.

You are a bridge between SPT’s headquarters and the Malaysian market. How do you translate the Norwegian business idea into Malaysian business language?

Companies like SPT are strong on technology, and in our case it has been developed and proven since the seventies. But technology in Malaysia will not penetrate unless the investment can be justified and explained clearly. That is why understanding how Malaysian work and approach business and knowing how to clarify the need for investment helped SPT. SPT has the technology and no doubt that a company like PETRONAS has the demand, but my role is to present it in a way that justifies the investment.

Service providers are the backbone of the industry. Who sets the trends in ML?

In flow assurance, it has to come from cooperation between all players. We could design state of the art tools like OLGA, but they would be useless if we cannot test them. That is why SPT has a strong joint industry program both within the company and collaborating with E&P companies such as PETRONAS, Shell and so on. For OLGA, we started a program in the nineties, and now launched OVIP (Olga Verification and Improvement Program) to describe the behavior of multiphase. Companies that take part in the program provide us with field data, and OLGA is being fine tuned that is if there is any discrepancy, then improvements will be done. In 2009 PETRONAS Carigali decided to participate in OVIP as well.

How does SPT convince companies in Malaysia that its solutions are the best?

We have the technology, they have the demand, and we have to convince them of the need to invest in our technology. There are few studies done by PETRONAS that explained that with the development of deepwater, flow assurance and reservoir management are crucial to the development of the industry. Moreover we are in able to provide them with a service right next door since we are located in Malaysia, and our clients appreciate that. In addition to software, we provide consultancy to optimize the utilization of the tool, and it that sense provide all the knowledge that we have on our tool. We train many engineers and transfer our knowledge so that they can fully utilize our software. To us, higher utilization will bring higher demand through new rounds of licensing, and we do not retain any information or hide knowledge. For the past two years, we have trained almost a hundred of PETRONAS’ engineers.

When will we see all PETRONAS’ engineers trained by SPT?

It is an ongoing process. In Malaysia we always have several training events, not only for Malaysia but for the entire region, and we are working on several courses with our customers. Training is one thing but what we especially want is for our customers to fully utilize the software and realize the full benefit of our tools.

If we were to come back here in five years time, what would we find?

From covering Malaysia, Indonesia and Brunei, we are planning to treat Kuala Lumpur as the Asia Pacific headquarters for SPT. We have many plans to increase the capacities of this office, and by 2015 I wouldn’t be surprised to see our office double or triple in terms of size.
What would be your final message to our readers on SPT’s ambitions within the Malaysian Oil & Gas industry?
We are committed to the local market, and already have established strong capabilities here in Malaysia, but we want to be part of the industry development and help the region become more successful especially in terms of deepwater.

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