Offshore – Syed Abdul Rahim Syed Jaafar and Abdul Rahim Awang, CEO and CCO – Malaysia
Barakah Offshore’s Syed Abdul Rahim Syed Jaafar, CEO, and Abdul Rahim Awang, CCO, share that “For continued growth, we have the flexibility to adapt to business trends and needs. We are ready for new opportunities to augment our exemplary credentials.”
Barakah Offshore has evolved from an offshore pipeline services provider to become a premier, integrated solutions provider. Can you please explain to our international readers the vision behind this transformation?
Barakah Offshore has taken the necessary steps to enhance our capacities and core competencies, which are in the pipeline and pipeline-related works in the oil and gas sector. Five years ago, Barakah Offshore was a subcontractor, and today we have become a turnkey contractor to have better control of our own destiny. Now, our turnkey contractor role is in both upstream (development and production phase of offshore oil & gas segment) and downstream (onshore activities).
In short, we are not abandoning our current skills set in pipeline services, rather extending ourselves to add value to clients and to provide integrated solutions to them.
The following is to demonstrate how we have been striving to become a premier, integrated solutions provider. From servicing Petronas Carigali as a turnkey contractor in December 2013, we were awarded different jobs by other subsidiaries of Petronas– Petronas Gas and Petronas Dagangan. We were awarded a 90 million RM job (approximately $25 million) by Petronas Gas. Through our good commercial proposition and track record, we won another contract from Petronas Gas for the bigger Pengerang piping job worth 260 million RM (approximately $72 million) in 2014. Similarly in 2014, we secured 29 million RM (approximately $8 million) EPCC Bio-Diesel Facilities project from Petronas Dagangan We enhanced job scopes while executing existing projects with clients. We can realize the vision- to be a premier, integrated solutions provider- through impeccable and consistent track record, and offer of good commercial value to clients.
Mr. Syed Abdul Rahim Syed Jaafar, you became CEO of Barakah Offshore in July 2013 – can you tell us more about the mandate you were given upon arrival and how you intend to shape the company’s ongoing transformation?
PBJV Sdn Bhd, the main operating subsidiary of Barakah Offshore was launched in 2000 by Nik Hamdan Daud- our visionary founder and one of the an industry captains in Malaysia. We have progressed from our humble beginnings to our position today thanks to his investment of time and capital.
Upon assuming my role as CEO, I was charged with building up the visibility of Barakah Offshore locally and internationally. In the past, we have not yet devoted enough of our energy to this task, perhaps because Malaysian culture dictates that we are a bit shy and do not trumpet our winnings and capacities. Since 2013 listing, we are being scrutinized by the public on our delivery, and we need to showcase our capabilities to a larger audience. My team works with me to engage in open dialogue with clients and show the compelling value proposition we offer. We want our clients to know that Barakah Offshore is here to stay and can deliver. Overall, our goal is to grow and develop to compliment Malaysia’s future growth.
Mr. Abdul Rahim Awang, you also joined Barakah Offshore as CCO in 2013. Can you tell us more about how your background contributing to the creation a Malaysian international champion (SapuraKencana) has allowed you to help position Barakah Offshore to meet its ambitious goals?
I first became involved in oil and gas working with Kencana, where I had the opportunity to grow the company with the founder. Through the evolution of the company, I learned more about making a young Malaysian company competitive with larger players and how to strategize in the oil and gas business, a valuable experience that I can contribute to Barakah Offshore. As Kencana grew into SapuraKencana, I learned more about a corporate structure for governance, structured risk management and investor relations programs. Prior to being listed, our business plan was more in the heads of the management than on paper. I have thus worked to bring high standards and best industry practices from larger companies to Barakah, even while the company maintains commitment to our nimbleness and entrepreneurial spirit.
2013 saw the listing of Barakah Offshore on the Bursa Malaysia. How has this listing enhanced Barakah Offshore’s capacities and services to its clients?
Barakah Offshore Petroleum Berhad is the investment holding company of operating company PBJV Sdn Bhd, which still maintains its role as a contracting company for clients in Malaysia and overseas. Our listing in November 2013 was, in fact, a reverse takeover (RTO). Being in the equity market presents new opportunities to finance our expansion. However, any investment decision we will make with the funding raised would have to create value, and we are carefully evaluating possibilities now.
Barakah Offshore has been in the market for 15 years, and we have both established an exemplary track record and gained extensive knowledge of the industry. Clients like to associate themselves with Barakah, as we deliver on our promises – both in terms of high quality and timely delivery. At a moment when oil prices have dropped and cost is ever more essential, we also manage our costs well. We also have an effective tendering and contracting department that is continually looking for new areas in which we could service.
At Barakah Offshore, we constantly engage with clients, through official forums such as trade shows, but also informally to share industry outlook. From my over thirty years’ experience with PETRONAS, I am also well poised to understand the needs of PETRONAS, the regional NOCs and many of other clients.
How is Barakah Offshore looking to capitalize on the major infrastructure projects being undertaken locally, especially the PIPC development?
PIPC presents many opportunities for the development of Malaysian service companies. Barakah Offshore has established our footing in the downstream sector, and we have sent our track record and credentials to the PIPC. There are still a host of projects lined up in association with the complex, mainly in the petrochemical sector. Most of the facilities have associated themselves with international technology licensors, and these licensors are required to work with a local partner to form a consortium. As such, Barakah Offshore is looking to define new international principals to partner with for these petrochemical projects.
As of December 2014, Barakah Offshore hosted a very healthy order book at approximately 2 billion RM. How does your current order book look and where do you see the most opportunities for continued growth given the major changes in oil price over the last six months?
Our order book stands at around 2 billion RM (approximately $550 million), which gives us earnings visibility for the next two to three years. As a service contractor, we focus on structural integrity, specifically the areas of operation maintenance and structures and facilities replacement, including pipelines and topside facilities. PETRONAS has announced capex cuts, but we believe many of our services are still required for ageing facilities that are covered within PETRONAS’s HSE policy. Much of the work in the areas of operational and facilities integrity will thus have to continue, and we will continue to bid for these projects.
Barakah Offshore aims to become the premier, integrated solutions provider to oil & gas industry. How does your internationalization strategy compliment this ambition and are there any specific regions you are targeting?
Barakah Offshore has created an international business outfit in last three to four years. Furthermore, we opened a country office in Saudi Arabia held by PBJV Gulf Private Limited, which is 85% owned by PBJV and 15% owned by a local entity. PBJV Gulf Private Limited presents avenue to participate in bidding activities in Saudi Arabia and other Gulf countries such as the UAE, Oman, and Qatar.
Barakah Offshore wants to grow the business internationally, but we will not ignore the regional scene. Malaysia and the ASEAN region present many opportunities. We have undertaken activities in Indonesia, and are looking for suitable partners in Myanmar and Vietnam, as having a local onboard would ease the nature of doing business in these markets.
To date, what project are you the most proud of and best represents Barakah Offshore at its full capacity?
The journey to construct our own pipe-laying barge, the Kota Laksamana 101 (KL 101 in short) represents our proudest moment. Construction commenced in 2009 and was completed in 2012 thanks to an engagement from our entire team. The barge was constructed 100% by a local yard in Perak, Malaysia, as we felt that it was part of our responsibility to engage with local contractors. The vessel is ABB-certified and can double up as accommodation barge for 300 pax.
Our founder, Nik Hamdan Daud, took the calculated risk to build the vessel, even with no contracts secured yet. Nik Hamdan Daud invested his personal funds in the project when he could have been contented with the company as he had grown over the past ten years. Instead, he wanted to take the company to the next level and owning such an asset was necessary. Bidders must have their own asset to participate in bidding rounds, and having the KL 101 means that we have been able to grow the company independently and better control our own destiny.
The vessel’s first job was under accommodation mode for PETRONAS Gas in Melaka, and its next subsequent job was in Indonesia, also under accommodation mode. Afterward, we marketed the vessel to NOCs, such as PETRONAS. We secured package A of the T&I umbrella pan-Malaysia contract in December 2013.
How is Barakah Offshore engaging with the larger community?
Barakah means blessed in bahasa, so we also feel the need to play our part in terms of corporate social responsibility. To this end, we have taken part in relief efforts for the December flooding in Malaysia with four teams on the ground to help meet the essential needs of flood victims. Annually, we dedicate a budget of 100,000 to 200,000 RM ($25,000 to $50,000) per year to a variety of CSR initiatives from soup kitchens, single mothers, cancer research and disabled people.
How has Barakah Offshore been able to recruit and maintain the right kind of people in such a competitive environment as the oil and gas space?
Human capital is our most important asset for continued growth. We thus contribute our resources to training, retraining and developing our staff, as well as retaining staff from moving to other companies. Not only do we offer competitive packages, Barakah Offshore also creates a conducive working environment and a good corporate culture. In particular, we hire and train new graduates, with 20 new graduate hires in 2014, 70% for technical and 30% for financial and other support functions. From our start with only eight personnel, we have now employed 530 staffs.
Our founder envisioned the company as a family business with typical family values. Overall, we aim to strengthen our employees, not only professionally but also personally. We want to instill values in them and help them in all walks of life. As such, we have an open door policy to create a direct line of contact between staffs and superiors. This means that problems are addressed immediately, rather than relying on hierarchy. This demands a mindset change on our part. From day one, we also have a career progression plan that lays out a clear path for each staff member over the years, which gives a sense of belonging and pride to strive for long-term goals.
The oil & gas industry plays a prominent role in the government’s Economic Transformation Program with the stated objective of making Malaysia into an oil and gas service hub. How do you see the role of Malaysian services providers, like Barakah Offshore, in the country’s path to become an oil and gas hub by 2020?
We fully support the country’s ambition to be an oil and gas hub. To be an oil and gas hub, local companies need to be able to export their expertise and to demonstrate a record of delivery. At Barakah Offshore, we will thus keep on demonstrating and offering our compelling value proposition. From Malaysia, we plan to have our expertise “exported” to other shores, such as the Middle East and Indonesia.
Barakah Offshore has grown a core business of pipeline services in 2000 into a one-stop shop service provider to the oil and gas industry in Malaysia fifteen years later. Where do you gentlemen hope to lead the company in the next five years?
Five years ago, Barakah Offshore was a subcontractor, and today we are now a main contractor for main offshore services. Our overall aim is to create a business entity that adds value. The single most important proposition we bring to the table is our resiliency to weather any storms. Our teamwork and family values strengthen us, and we will continue to enhance our capacities.
In this vein, we are currently looking for opportunities in M&A and in the E&P space. Any acquisitions will be done in a timely and meticulous manner, and the present may be timely since asset prices have gone down substantially. E&P is big business, but with asset prices gone down substantially which makes deal do-able for a smaller company such as Barakah Offshore. There are still many opportunities for assets with low extraction cost, and we would like to seize on one of these opportunities.
The single most differentiating factor we offer is our resiliency. It is team-work, family values and culture that makes our organization strong. We are committed to make our staff better – work-wise and as a person, harness their inner strengths to ensure they perform 120%.
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