VOICES FROM ENERGY AND GREEN ECONOMY SECTOR
How do you assess the current shape of Malaysia's oil and gas sector?
In the four years after the oil crash in 2H2014, times had never been tougher in this industry. The number of rigs in Malaysian waters fell from over 20 to just three, and countless people lost their jobs. The mode of business has transformed from growth to survival. We only saw real signs of recovery in the sector in 1H2018. Prices picked up to above USD70 in April and have mostly stayed in the range of USD70-80 since. We can now start to plan for growth again rather than survival. If the oil price holds anywhere between USD70 and USD80, it will be an extremely interesting year for oil and gas service players.
How are you positioning Deleum to take advantage of a continued up-cycle in oil and gas?
Deleum is an integrated service provider that runs contracts on a long-term basis; therefore, 85-90% of our business is production or operational driven. Still, Petronas views the future in line with oil prospects, and still needs to produce and treat and maintain its wells. We are in a position to provide it and other production companies with relevant services.
How did the establishment of Reach Energy and the acquisition of the maiden asset in Kazakhstan come about?
Reach Energy Berhad was a special purpose acquisition company that was listed on the Main Market of Bursa Malaysia in 2014, when the oil price had just started declining. In 2016, when it reached rock-bottom, we acquired a majority interest in our first asset, Emir-Oil LLP in Kazakhstan. Since the criteria for acquisitions was rather prescriptive and stringent, we had to venture out further geographically and eventually acquire Emir-Oil, which fulfilled all the acquisition criteria. A number of mergers and acquisitions in the oil industry took place at that time, and it was an opportune time to enter the E&P business. I am now wearing two hats, serving as the CEO of Reach Energy Berhad as well as General Director of Emir-Oil LLP. My focus has been mainly on improving productivity, efficiency, and the bottom line of the business.
What will be the next milestones in the development of the block?
We currently hold production contracts for four fields (Kariman, Dolinoe, Aksaz, and Emir) and have obtained the authorities' approval to commence trial production of the North Kariman field.
How does Global Business Services (GBS) Asia generate value for BP, and how are you aiming to unlock greater value going forward?
GBS Asia is set up slightly differently compared to most of the other GBS organizations. The core of what we do is not the typical back office work, such as report process, accounting, and collections of receivables and payables, but what we call the accounting, reporting, and controls (ARC). Therefore, our work is more about analyses and reviews. All the initial recordings of transactions and invoices of BP globally are outsourced to Accenture, and GBS manages Accenture on behalf of BP. This ensures that issues and challenges are easily understood and solved, and we can plan strategically in terms of value delivery.
Could you tell us more about your downstream activities in Malaysia?
The downstream business faces a challenging environment with tight margins and high competition, even among premium brands. We have been here for more than five decades, and our presence is well known. Our brand Castrol is one of the world's leading lubricants and among the more premium brands in the market. Castrol Malaysia has a lubricants blending plant located at Port Klang and a strong distribution network with over 14,000 customers.
Do you see opportunities to participate in renewable energy projects in Malaysia?
As a group, we have reiterated our commitment toward the dual challenge of meeting increasing global demand for energy while reducing our carbon emissions. Malaysia is keen to become more sustainable and develop its renewable energy generation capacity, which is close to what BP is pursuing as one of its strategic objectives. In 2018, BP acquired Lightsource Renewable Energy, which is one of the most advanced and largest solar companies in Europe and has now been rebranded as Lightsource BP.
VOICES FROM ENERGY AND GREEN ECONOMY SECTOR
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Interview
Dato’ Khairussaleh Ramli, Group Managing Director & CEO, RHB Banking Group
RHB has exposure to all of the key sectors in Malaysia and a presence in nine ASEAN countries. The bank's latest five-year roadmap aims to build on that and propel it to become a leading financial services player.
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