with S. Halim, Chairman, PT Dwisatu Mustika Bumi(DMB)
DMB was created in 1993, and has since grown to become a major marine-offshore construction company. For example, you have recently launched a project with Pertamina to build the $42 million Balongan oil terminal. Can you tell us about this project?
For this project, DMB is building two offloading offshore terminals, what we call single point moorings (SPMs), and a pipeline to the shore. Onshore, DMB is building a tankfarm with all associated equipment. Additionally, the project required a custody transfer facility, because from Balongan oil is transferred directly to Jakarta due to congestion cutting off intake points. As there is insufficient space in Jakarta, DMB built this facility in Balongan, where the oil is stored in the tankfarm prior to transfer.
When we interviewed Triharyo Indrawan Soesilo, President Director of Rekayasa, he was optimistic about the Indonesian EPC industry, saying that the sector is growing very rapidly and the market is very open to competition. What is your opinion on this positive outlook?
Since oil prices have increased there is much excitement, with many players trying to dig for more oil; even marginal fields are being developed. Now with prices reaching $100 a barrel, smaller amounts of oil become much more attractive, and I share this optimism for the ripple effect on the EPC industry.
With these high prices and development of marginal fields, what changes do you notice for DMB?
DMB has noticed many more opportunities in building oil field infrastructure, and not only in greenfield but renewal projects as well. For example, BP and CNOOC both have platforms in Java exceeding 20 years of age, and many were shut down five or six years ago. Now, with increased oil prices, many are being reactivated. DMB recently completed a contract with BP to reactivate nine platforms for $21 million, which we completed safely and on-time. This represents just some of the over $1 billion BP is spending on renewing infrastructure in the next few years.
With all of this renewed investment interest in Indonesia, what is the most important focus area for DMB?
DMB’s particular focus is on shallow-water offshore pipelines. Our competitive advantage is based on the fact that larger companies find it hard to compete with us, as a local company with small and specialized equipment for near-shore activities. It’s a great market for DMB.
You speak to this local expertise and specialized equipment that makes it difficult for others to compete. What are some of the other advantages that set you apart from your competitors?
DMB competes on efficiency, and by the expertise of our local content. Taking companies entering Indonesia from China, the world knows that they are competitive and aggressive, to the point that even countries like America are scared. However, such companies need to mobilize activities from China, and that cost is one important aspect amounting to millions of dollars. DMB is here in Indonesia, and can offer a much more focused perspective, particularly in North Java.
Regarding this local content you mention, part of DMB’s mission statement is to “create jobs for many people based on expertise of dedicated employees, productivity, leadership, and HSE stewardship.” Many companies face skills shortages, especially in technical fields like engineering. In creating these jobs for many people, what challenges does DMB face?
Education in Indonesia is OK, but there is little opportunity for students to gain practical experience during their studies. DMB is trying to help alleviate this concern, via cooperation with ITB, where every year we recruit 10-20 students on training internships. In this way, DMB helps to properly educate local talent in a practical way.
DMB recently received a commendation from Supramu Santosa of Star Energy, congratulating for 1 million man-hours accident-free. DMB also has ISO certification and is very proud of its HSE accomplishments; given all this, what is DMB’s safety philosophy?
Accidents mean costs, and that’s why DMB avoids them. Every time, before anyone starts working, we always stress to do everything safely. DMB’s motto is “Safety Is Our Priority,” and we take safety very seriously: DMB has achieved over 7.5 million man hours with no lost time.
Ari Soemarno and Pertamina are looking for partners to help develop the over $1 billion in planned spending for upstream activities in 2008. In light of these investment opportunities, what can we expect from DMB in the year ahead?
In 2008, DMB is trying to consolidate, due to rapid growth from limited financial resources. Therefore, 2008 growth targets are set at no higher than $30-40 million. DMB is not too big or too small, and prefers to remain a specialist in shallow water activities in pipeline installation, and also SPM units. In this latter category, DMB has a 95% market share, and is the authorized builder and installer of SPM branded equipment. There are few other players competing with us in this market.
DMB is a past participant in the IPA convention, whose theme for the April 2008 edition is “Meeting Energy Challenges Through Cooperation”. What will DMB focus on showcasing at this year’s convention?
DMB’s intention is to showcase the company to the world, to put its best foot forward in the hopes of securing international partnerships. This coincides with our ambitions of moving beyond regional player status and into international territory.
What is your final message to international investors and other readers of Oil & Gas Financial Journal?
Come to Indonesia, and work together with DMB. It is a win-win situation, the cake is big enough, we know how to play in the local field, and you will not be disappointed.