Technologies Singapore – Douglas Moody, Sr. Vice President and General Manager, APAC & ME, Subsea Systems
Douglas Moody, Senior Vice President and General Manager, Asia Pacific & Middle East, Subsea Systems, discusses FMC Technologies’ innovative projects partnering with both the IOCs and the NOCs in APAC as a fully integrated EPC provider and the company’s pro-active response to increased regional deepwater exploration, as well as FMC Technologies’ focus on locking in value locally and investing in people in the region.
As a leading global provider of technology solutions for the energy industry, can you introduce FMC Technologies’ presence in the Singaporean context?
FMC Technologies has enjoyed a long standing presence in the region with our first offices established in Singapore in 1975, Indonesia in 1985 and Malaysia in the early 90s. Singapore has served as regional headquarters since the beginning and is the hub of our operations in the Region.
The Singapore branch was initially primarily established to serve the Surface Wellhead market, but quickly evolved into the Subsea market with our first Shallow Water trees deployed into the Indonesian and Malaysian markets in the late 1980s, followed by the first locally produced deep water projects in the 1990s.
Today, we have evolved into a regionally focused full EPC provider that leverages the strength of our global business.
Recently, having identified the growing needs of the Subsea market, we proactively doubled the size of our facilities in Singapore to handle the increased project activity. After expansions in 2006 to serve growing regional Subsea and Surface markets, we again expanded in Singapore in 2012 with a custom built fit-for-purpose Surface assembly and test facility at Benoi, which has allowed us to focus our Gul Circle on Subsea deliveries. The Benoi facility was designed to cater to growth stemming from the push for surface and platform-based natural gas production across the Asia Pacific (APAC) and Middle East markets. Now in 2014, we are moving much of our Subsea organization to expanded offices at the Creative Resources building, where a majority of our project teams for the large Subsea projects will be centered.
Our expansions in Singapore in 2006 were complemented by the expansion of our Malaysian operations in Nusajaya to accommodate the Shell’s Gumusut full EPC project. This project was a significant milestone for our Region as it demonstrated our capabilities across the breadth of an EPC project and it was produced entirely out of our Nusajaya, Malaysia facilities for local content reasons. This project has since served as a stepping stone for a variety of other more recent projects including the ConocoPhillips projects in Indonesia and Australia, Chevron’s Wheatstone, Shell’s Prelude and Woodside’s Greater Western Flank. Besides continuing to grow as a regional project operational site, Nusajaya has now evolved into a global supplier of standard FMC Technologies products.
What challenges have you encountered along this aggressive growth path?
The people aspect is fundamentally the most important element driving any organization’s growth. This is undoubtedly a challenge faced by the wider industry, especially in a region that is experiencing such a rapid expansion phase, and which lacks the same legacies that other regions like the Gulf of Mexico or the North Sea have.
Having said that, FMC Technologies has successfully doubled its population in Singapore and Malaysia through various strategic hiring and training practices designed to boost our talent pool. Tapping into our global network, we reinforced these efforts by bringing in experts to lead our teams and develop training and development programs.
FMC Technologies has been fortunate enough to have experienced growth on a global level across all regions. While that has been an achievement, it has also forced us to be very aggressive in our local hiring and development programs as the worldwide industry competes for a limited pool of experience. This creates a great opportunity for local technical, project management and other leaders to have an accelerated learning curve and exciting challenges.
With the shifting demand patterns from the west to east, how would you describe Asia’s importance to the group’s global operations?
The key importance of APAC is indeed the shift of the energy market in this direction. As such, we see a good deal of future growth, demand and customers in this part of the world. Similarly, the focus of many of the IOCs has shifted more towards the APAC market, to serve its energy needs. With our long history in the region, we are well positioned to capture the opportunities as they arise.
Going a step further, not only is APAC important for FMC Technologies from the region’s strong growth prospects, but also from the perspective of the operational legacy we have accumulated here and the operational excellence that has been our hallmark. This strong operational heritage will become more important as market growth continues in Asia and Africa. The production facilities we have in the region will increasing serve as an integral part of FMC Technologies’ global manufacturing portfolio.
Although the regional revenue streams are not the highest in FMC Technologies’ global operations, APAC is central to the future growth of the company as it is to the future support of the group’s global operations.
Rising costs and limited space in Singapore have led some in the industry to relocate their activities towards neighboring Malaysia and Indonesia. What is the rational for FMC Technologies’ continued commitment to the Little Red Dot?
Working with the Singaporean Economic Development Board (EDB), we continue to examine what the best options are in terms of conducting certain strategic activates within Singapore, while locating other activities in Malaysia and Indonesia and elsewhere. At the same time, in some cases, local market production advantages influence our investment decisions.
The cost factor is certainly a concern in Singapore but the local authorities are impressively proactive in their dialog with industry players and we’ve held a number of constructive conversations with the EDB on what parts of the value chain should be retained in Singapore in comparison to other areas. We believe Singapore still offers a large pool of important resources and attributes, including a stable and conducive business environment as well as a transparent and clear regulatory framework.
Thus far, our headcount focus in Singapore has leaned towards engineering and project management within the Subsea business. We are also committed to the Surface business in Singapore and the highly cost-effective and delivery-focused network of capabilities and suppliers that support our regional customers so well.
Since manpower is a significant contributor to that cost factor, we have worked hard on investing in future talent through our relationships with the local universities by sponsoring engineering scholars at National University of Singapore (NUS) and Nanyang Technological University (NTU).
In the same way we work closely with the EDB in Singapore we are also in close contact with the Malaysian Investment Development Authority (MIDA) to establish the right split between our operational strengths to unlock a synergistic effect between the two countries’ attributes.
In the face of stiff competition brought on by the OneSubsea Schlumberger and Cameron venture, for instance, how has FMC Technologies maintained its market leadership?
FMC Technologies sets itself apart by the numerous alliance and partnership agreements with major operators. Looking at OneSubsea and the recent relationship between Aker Solutions and Baker Hughes, you see that our competitors are partnering with service companies. In contrast, our philosophy is to partner with the operators. We believe that this is an effective combination which has paved the way for several of our technological developments. Subsea processing, for instance, is a result of such partnerships and we are the market leaders in that segment, having delivered all of the first five subsea separation projects.
In the Region, our long-term relationships with key IOCs and NOCs continue to also provide the benefits of lower risk and transactional costs to our customers. By positioning ourselves close to the operator and understanding the challenges they face, we believe we can deliver the most value to our customers and be at the cutting edge of the industry.
To what extent are you pursuing the next-step R&D challenges with operators in your region?
Since the industry is not as mature in our region, I wouldn’t say we are quite there yet. Although we have some exciting new technologies in place, the focus for operators is still on project execution and effective field development.
The way these technologies fit into the region is by supporting our clients through their life-of-field planning. For instance, HP/HT in APAC is not on par with the demand we are seeing in the Gulf of Mexico but we are developing those technologies and they will eventually be required in the region. Given our experience and developments globally, these advances can be incorporated into the life-of-field planning as we consult with the regional operators. We are continually conducting a variety of studies with operators to help them evaluate the options and solutions they have available through FMC Technologies.
In an increasingly demanding market going into more challenging environments, how does FMC Technologies commit itself to stringent field processes and safety and quality?
In 2009, although we were the global market leaders in most, if not all our business lines, we took the step to embark on a quality transformation program – Impact Quality. Taking a look back, we knew we were good at delivering projects and responding to customers, but we asked ourselves how we could take the company to the next level in quality.
The five absolutes of quality have been the basis for the quality transformation within our company: These absolutes are based on: conformance to requirements, prevention, a commitment to zero defects, measuring the price of nonconformance and creating customer success.
We started by training and developing our people to understand and appreciate these five absolutes, beginning from the top executive levels all the way down. This journey has really moved us as an organization, changing the daily vocabulary within the company, the relationships between internal and external customers and suppliers within our processes and has moved us towards our ultimate goal of customer success. At its core, we sought to achieve this by enabling and encouraging everyone to design their own zero defect processes whose outputs can be replicated time and time again.
What are your main aspirations for FMC Technologies in the region?
Our main goal is to be the most trusted supplier in the region. Although our global leadership, particularly in the Subsea, illustrates our success at earning our customers trust on a global level, we will continue to mature the organization while working with our global strengths to deliver the highest quality levels that our clients are used to here and around the world.
We have been able to establish solid relationships with the NOCs and IOCs in the region through our long history beginning with the Surface business. By leveraging our global capabilities and strengths and our local capacity and expertise we will continue to grow the region alongside our customers as they venture into more and more challenging environments.