2014 – Sofiyan Yahya, Chairman of the Organizing Committee – Malaysia
The chairman of the MOGSEC 2014 organizing commitee and outgoing chairman of MOCSC discusses the opportunities available for oil and gas service companies in Malaysia, and why he believes the country to be the oil and gas hub of APAC.
Petronas has committed to spending around USD 18.29 billion per year in 2012-2016, especially in developing new fields and enhancing recovery from old fields. Has this increase in economic activity translated in more companies setting up operations in Malaysia?
Yes, today we see more local service providers, as well as a wider scope of services, being offered here in Malaysia.
It is important that as a country, we promote ourselves overseas and make ourselves exportable. But to do this we must be sustainable and integrate locally as well.
One analogy I like to use is to see Malaysian service providers as a cup of coffee. To make a complete cup of coffee you need a spoon, a cup and the coffee. Here in Malaysia a company can exist successfully as just a spoon or just the cup. However, when we look to export services to the Middle East and elsewhere, they like to see a whole cup of coffee and don’t want to know about just the spoon or just the cup.
MOGSEC is a great platform to see what others in the country are doing. It allows local companies to potentially integrate into bigger companies. Sapurakencana is a classic case of a local company becoming a world-class player by integrating their services. It is important that MOGSEC helps facilitate matchmaking and integration on a local level: everyone knows it is important to matchmake between international and local companies, but often matchmaking between local companies is overlooked and deprioritized.
Malaysia is making a name for itself in the industry: last week, Malaysian oil and gas firms secured USD 160 million in sales in Norway. Which are the best performing segments in the Malaysian service sector today?
Industry segments such as fabrication and marine vessels are performing well, but where we would like to see growth is in the knowledge-based sector. We want to be growing and exporting is in areas such as engineering services and process design. The biggest challenge in these areas, though, is manpower. However, I don’t see this as a big problem for Malaysia: when you go overseas, you want many of your staff to be local anyway. We need to emphasis the message that we can’t think in terms of Malaysia going overseas and the workforce being 100 percent composed of Malaysians: we need to start to change our mindset and think of businesses going overseas, rather than the workforce. This is the next stage in promoting Malaysia as the leading export base in the region.
In what way does MOGSEC stand out as a way to establish Malaysia as a regional oil and gas hub?
MOGSEC is a truly unique event. It is unlike the other exhibitions and events that happen here in Malaysia, which tend to be open and run by international companies. MOGSEC is an all-Malaysian event to promote Malaysia as the regional hub. You must be doing business here in order to be an exhibitor and this way, we guarantee the event promotes Malaysia as the regional hub.
The second differentiating factor is our innovation center. This is where working groups made up of local companies, such as the drilling group, come together to lead a discussion about technology and innovation in this country. We also encourage local companies to talk about how to mitigate and deal with local issues.
It is these three points that makes MOGSEC stand out as an event that truly promotes Malaysia as the regional oil and gas hub.
MOGSEC is relatively young and MOGSEC 2014 will be only the second iteration of the conference. Can you elaborate on the conference growth path and any lessons you leant from the inaugural year?
In 2012, due to the unexpected support we had from all the Malaysian players, we faced an organizational challenge. This year we increased the circle of institutions involved: we invited government agencies as well as companies, and a number of prominent universities attended the exhibition. We are keen to keep the momentum of MOGSEC going: next time there will be even more players and even more companies based in Malaysia attending and exhibiting. There will always be more we can do to showcase our technology and promote Malaysia as the hub for oil and gas.
How competitive is Malaysia in attracting talent? Is this an area where MOGSEC could play a role?
At MOGSEC, we are encouraging universities to exhibit at the show. It is more important now than ever before to promote the opportunities and career possibilities there are in oil and gas to young people,. We want to expose to them to all the companies and all the possibilities available to them. You would be surprised at how many students today have an old-fashioned view of the oil and gas industry, and it is up to us to change that and promote the exciting career opportunities to them.
Skill shortage is a global issue: countries all over the world, in a variety of different economic situations, are facing situations very similar to Malaysia today. As well as this, experienced people are more highly sought than ever before, ‘easy oil’ is over and as a result, companies are looking for more experienced people to take on these new technical challenges.
You are a member of InvestKL’s industry advisory group for oil and gas, as well as chairman of the MOGSEC 2014 taskforce; in both roles you have a similar objective: to promote and develop Malaysia as an oil and gas hub. What do you see as the biggest challenge for Malaysia to establish itself as an internationally-recognized oil and gas hub?
The biggest challenge that Malaysia faces today is to find their added value in order to be relevant elsewhere. One of the easiest ways to do this, the ‘low hanging fruit’, is for each company, particularly the smaller companies, to increase their capabilities and integrate their services.
For example, in project management, why can’t project managers integrate with engineering designers as they develop a project? Or why can’t process design companies integrate with fabrication companies to work with them and come up with new innovative approaches to equipment?
At the same time, Singapore is also positioning itself as an oil and gas hub in the region. Do you see Malaysia more as complementary or competitive with its neighbors?
It has to be complementary: in Johor and Pengerang, we are creating massive petrochemical complexes which we hope will turn us into the next Rotterdam. In order to turn this vision into a reality, we need to complement Singapore’s existing infrastructure and companies. Some companies are indeed beginning to make the shift from Singapore to Malaysia, but this is a strategic choice on their part based on the opportunities we can offer here, rather than a deliberate poaching of companies. Malaysia will be better for some companies in the long-run; Singapore will be better for others.
What do you think is the image of Malaysia outside of the country, and how does this match with the reality in the country today?
In the Middle East, Malaysian engineers are very popular. When I take delegations out to the Middle East, I am often informed that they are in need of a greater number of Malaysian engineers.
I believe the image of the Malaysian oil and gas players is very popular; there just aren’t enough of them. As president of MOGSEC, I go on a lot of delegation events and many oversees trips to promote Malaysia and the feedback is always the same: where are they? We don’t have enough! They want to see a greater level of participation.
That means that there is a very positive image of Malaysian oil and gas players in the larger industry, but there simply aren’t enough of us. That’s why we need to look at integrating more services and developing more training in-house to expand capabilities.
What is the best way to establish more businesses in Malaysia? Through spinoffs from Petronas, or new entrants to the market?
Petronas is obviously going to be the base business; it is the key business base for all small companies in the oil and gas sector. What I advise these businesses is not to rest in their comfort zones: whatever projects they have now are actually just the initial building blocks for their businesses. Perhaps in the past, these companies have been too secure in these first stages, and have not been tempted to use the experience acquired with Petronas to expand overseas: the experience is relevant everywhere there is an NOC to work with around the world, and even further.
If you were given the opportunity to lecture here in Malaysia, what would be the message you would like to pass on to young graduates about the oil and gas company?
In Malaysia there is a stigma about the industry and I believe the parents tend to be over-protective. They believe that going into oil and gas is dangerous. My message to them is that oil and gas offers a very challenging and interesting career that allows you to do many things. I would try to the best of my ability to persuade them to consider the oil and gas industry as a career, and hopefully then we will see more talent enter the market. All those experienced people will retire and disappear as time goes on and we need them to be replaced urgently. We need a stable workforce: this is vital if Malaysia is to continue being the region’s oil and gas hub.
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