Malaysia – Tuan Hai Ewe, Country Manager & Director of Innovation Norway, Malaysia
Intsok’s country manager in Malaysia and the director of Innovation Norway, Malaysia speaks about Norwegian oil and gas companies active in Malaysia and elaborates on their strength, in particular Norway’s international offshore technology.
Your role is to introduce unique technologies from Norway into Malaysia: what does that say about the balance between both countries?
We have always been trying to get companies from Norway to come in to work with local Malaysian companies. But if they can jointly develop technology to suit certain areas, that would be a positive development. I believe the market is growing; the pie is expanding. The challenge here is to come up with new technologies and more efficient ways to extract oil and gas.
It is imperative for Malaysia and Petronas to increase production rates and improve recovery factors at mature oil fields. The current recovery rate, between 30 and 35 per cent, is rather low. It will be more cost effective to extract more oil from the same well than to try to find oil in a new oil field. Imagine if you increase the recovery rate by one percent; that would translate into billions in revenue. And that is what we, as Intsok, try to achieve; bringing technology from Norway that would increase the recovery in Malaysia.
Could you elaborate more in how Intsok is helping its partners to understand these technologies that are available?
One of the things we do is arranged meetings with clients (workshops and seminars), during which we bring companies in areas that Malaysia, or Petronas for example, might be interested in. Then we bring the partners together to share experiences. This has been ongoing over the years in different topics. Some of the topics that were covered include deepwater technology; brownfield technology; pipeline integrity management; corrosion management; and integrated project management.
Malaysia is the second biggest exporter of LNG while Norway is starting to develop LNG projects. What can Norway learn from Malaysia?
There is much to learn. That field which you are talking about is actually going to be a subsea development. So there is no structure or floating facilities over the field. Malaysia has gone much further when it comes to LNG development. Learning is a two way street. While we want to bring technology from Norway to Malaysia, once the companies are here, they can also learn a lot from Malaysia as well.
I spoke to some Norwegian companies which were very impressed with Malaysia’s ways of adapting technology, which they think they might be able to apply in Norway as well. It’s a learning experience for both sides. I don’t think one is superior to the other, because you have to adapt the technology to the environment.
Scandinavian culture is very different from Malaysian culture. How would you describe both cultures working together and what are the main challenges?
I think Norwegians are very straight forward and speak their minds. Malaysians are more indirect. It takes more time to sell an idea to the Malaysian side.
In order to successfully conduct business in Malaysia it is important to understand the Malaysian business culture. A trust needs to be developed before companies can work well together. We tell people that it takes time to reach a deal; it’s not going to be accomplished through one or two meetings. They need to be present in the market, socialize and network.
I always tell Norwegian companies that they need to be in the market for at least a year in order to see any success.
What is the first piece of advice you would give to a Norwegian company that want to access Malaysia?
I would first need to understand what it is that they are planning to do and to understand their market entry strategy. It is also important to know if they have done their homework. Is there something they think the Malaysian market would need to have? They need to know the procurement process of Petronas and the licensing requirements of Petronas. Sometimes it’s hard for Norwegian companies to understand that they have to go through all these steps in order to do business in Malaysia.
Industry voices are saying that it is not commercially viable to develop marginal fields in Malaysia?
Yes, marginal fields are challenging. As I understand it, the risk and reward are capped at certain levels under the Risk Services Contract for the operators or contractors of the fields.
Launched on 25 September, 2010, the Economic Transformation Programme (ETP) was formulated as part of Malaysia’s National Transformation Programme. O&G is one of the 12 National Key Economic Areas. 13 Entry Point Project’s (EPPs). How has the economy changed through these policies and how was business affected?
It has. For example, the government has created the MPRC (Malaysian Petroleum Resources Corporation). One of the key roles of this corporation is to promote the services sector in the country and to attract more companies to establish locally. They are looking into ways to open up the sector for more participation from international oil companies. This has definitely been a positive development for the industry.
The objective is for Malaysia to become a leading oil and gas services hub in Asia by 2017.
Is this feasible?
I know the government has been aggressively promoting Malaysia to establish it as a hub. And with such strong support from the government I believe it will succeed.
Do you see Malaysia more as complementary to Singapore or is it more competitive?
The major difference is that Malaysia has oil & gas resources. Therefore, I cannot see what advantage it would represent for a company to establish itself in Singapore and then try to get into Malaysia, unless it is using Singapore as a regional hub. My advice for Norwegian services companies is to set up operations in Malaysia directly if they are targeting the Malaysian market.
I would also say that Singapore complements Malaysia in some ways. It’s a small country (city-state), so perhaps that’s also their advantage. They have regulations/ processes that make it easier and faster for companies to bring in foreign workers. On the hand, the Malaysian government is aware of the challenge or problem and is working to reduce the time it takes to approve work permits to foreign workers.
What do you think should be the key priorities for Intsok in the years to come?
Our key goal is to bring in more companies from Norway to establish in Malaysia. To do this, we will need to inform Norwegian companies on the opportunities in the oil & gas sector in Malaysia and to organize business delegations to Malaysia so that the companies have first-hand knowledge of the market. We will provide advisory services to these companies like entry market strategy, market intelligence and other practical supports in helping them to establish in the country.
Furthermore, we will work in capacity building seminars/ workshops with Petronas; introducing different/relevant technologies and bringing speakers to share experiences. Actually, we plan to have such seminar or workshop at least once a year, with Petronas playing host. This year we had over 130 participants at such a workshop. It’s a great place to share experiences and network.
How do you think your personal experience helps you build links through this network?
I spent six years in New Zealand as a student. Thanks to that I understand the mentality of the people. Due to my extensive experience working with Norwegians and travelling to the country I understand better how Norwegians think. Being Malaysian, I naturally understand my people’s culture, and therefore I act as a bridge trying to get people to work together. At times it’s very important for me to sit at meetings and be there to improve the verbal and non-verbal communication and understanding between all parties.
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