15 May 2009

BHPetrol: British Petroleum in Malaysia

British Petroleum's green petrol stations were once upon a time all over Malaysia. Starting in February 2005, all of the green slowly became orange, and the august logo "BP" became replaced with a more modern looking "BHPetrol". If the old logo looked like a school badge, the new logo looked like a Web 2.0 logo. It was a rebranding process, to reflect the takeover of BP Malaysia Sdn Bhd. Thirty per cent of the company was held by Lembaga Tabung Angkatan Tentera, while the remaining seventy per cent was held by LTAT's subsidiary company, Boustead Holding Bhd. Thus, Boustead Holding Berhad came to change the name of BP Malaysia Sdn Bhd to Boustead Petroleum Marketing (M) Sdn Bhd. (Source: BHPetrol News and Media Archives. Boustead to rebrand BP Stations.)

The whole matter began in 2004 when BP Malaysia and LTAT concluded talks to sell BP's 70% stake in BP Malaysia Sdn Bhd to LTAT. (Ref: Gulf Oil and Gas, 3rd January 2004. LTAT To Purchase BP's Shareholding In Malaysian Fuels Business.) From the press release, we now know that this 70% was taken up by LTAT's subsidiary company, Boustead Holdings Berhad.

Boustead Holdings is an established conglomerate in Malaysia. From the Company Profile on its official website:

Boustead Holdings Berhad, one of Malaysia’s oldest diversified conglomerates, was founded in 1828. Listed on Bursa Malaysia in 1961, Boustead today has 133 subsidiaries of which 3 companies are listed and 16 associate companies of which one is listed and has total assets in excess of RM8 billion and more than 12,000 employees. The major shareholder of Boustead today is Lembaga Tabung Angkatan Tentera (LTAT)


The group chart of Boustead Holdings Berhad is impressive and can be found here. Other businesses in the group include banks, insurance, cargo freighting, paints, tertiary education, and many others. But it was only in 2005 when Boustead Holdings Berhad acquired its 70% stake in BP Malaysia Sdn Bhd, and began the ball rolling on its venture into the world of petrol retail. By August 2006 Boustead Holdings Berhad would announce, that its venture into petrol retailing was profitable, contributing "handsomely" to its coffers. It would also launch a new fuel, Infiniti. (Source: BHPetrol News and Media Archives, 10 August 2006. Boustead awaits SC nod for Islamic REIT listing.)

SAP, a leading provider of enterprise resource planning (ERP) software, provides some details of BHPetrol's success story. (Source: SAP website. Boustead Petroleum Marketing: Oil and gas firm handles expansion with SAP (R) application management.) BHPetrol has a revenue of US$450 million and employs 200 staff. It offers the following products and services: "Gasoline and diesel fuel, liquid petroleum gas, and engine lubricants". In another SAP report, "Success Story", it was reported that BHPetrol's yearly revenue hovers around the US$658 million mark. (Source: SAP. Boustead Petroleum Marketing: SAP (R) consulting helps oil and gas player pull off rapid implementation.) Apparently SAP's ERP solution paid off as one employee was quoted: "The SAP software is much more user-friendly than
our legacy solution".

BHPetrol also upgraded its pay-at-the-pump solution by subscribing to Verifone's Linux-based OP 4100. From a case study report at Verifone's website:

The OP 4100 is the first pay-at-the-pump device with an EMV-approved contactless solution, and as such was the first to follow and utilize the card association’s most stringent hardware specifications.

With VeriFone’s OP 4100 and PAYware EMS configuration, BHPetrol has created the unique customer payment experience it wanted to set it apart from the competition. The company is now able to deliver consumer messaging directly at the pump — via a central server to individual stations or system-wide. Operations can use the same system to deliver security and programming updates. Overall, the PCI PED approved OP 4100 system has proven to be exceptionally customizable and easily managed with in-house resources and,
most importantly, it has provided the control, security and image BHPetrol was after.

To date, BHPetrol has retrofitted nearly 800 of its Dresser Wayne and Gilbarco pumps. And thanks to the ease and simplicity of the OP 4100 retrofit solution and re-installation of the data cable, the stations were upgraded at an amazing rate. Taking just 30-45 minutes to completely fit and configure two OP 4100 modules into a
dual-sided pump, BHPetrol was able to upgrade three stations per day. That’s 24 OP 4100 installs in one day, with the typical station having four dual-sided pump islands (eight OP 4100s per station).

With such an innovative approach, combined with VeriFone’s unique solution, BHPetrol has efficiently and successfully positioned itself
in Malaysia at the forefront of secure payment technology, customer service and marketing.


By May 2008, Boustead Holdings Berhad would state in its press release that its petrol business had contributed to a "marked increment in segmental contribution" to the group revenue. (Source: Boustead Holdings Bhd website. Boustead first quarter profits up 138%.) From the same press release:
Since its inception as a modest trading entity for more than 180 years, the Boustead Group has grown by leaps and bounds to comprise more than 80 subsidiary and associate companies, and has substantial interests in various sectors of the Malaysian economy. The Boustead Group's operations are focused in six key areas; plantation, finance & investment, property, manufacturing and services, trading and heavy industries. As at 31 December 2007, Boustead Holdings Berhad combined paid-up capital is RM315 million, while its shareholders’ funds stands at RM2.5 billion. Market capitalisation currently is in excess of RM3.3 billion.


BHPetrol also benefits from Boustead Holdings Bhd's ownership of Affin Bank. In November 2006, BHPetrol announced that it was working with AffinBank and MasterCard to introduce PayPass, a credit card utilizing a contactless payment system for purchases below RM110. (Source: Daily Express (Sabah), 9 Nov 2006. AffinBank and BHPetrol launch contactless fuel card.) The report also quoted BHPetrol managing director Tan Kim Thiam saying: "We are opening about 10 to 12 service stations a year."

In its 2008 Annual Report, Boustead Holdings Berhad also states: "BH Petrol is already exploring prospects tomake further inroads into the liquefied petroleum gas segment." (Source: ListedCompany.com. Boustead Holdings Berhad Chief Executive's Review: Extracted from Annual Report 2008.)

BHPetrol's loyalty points program utilizes GHL Systems Berhad's NetTransact PivotPoints Loyalty Solutions. GHL System Bhd lauds its work for BHPetrol as a success story. From the GHL website:
BHPetrol is one of the first companies in Malaysia to use GPRS as a method of communications to carry the transactions from the point of origin (the petrol station) to the heart of the communications network located within the BHPetrol headquarters in Menara Maxis. This opened up new vistas of opportunity especially in areas where physical phone lines (last mile) may be scarce. Additionally, BHPetrol was one of the first in the industry to utilize wireless credit card terminals in their forecourt.

PivotPoints Loyalty Solutions is built on GHL Systems' NetTransact platform, the most cost-effective integration and application platform available for building new, custom applications and integrating existing applications and infrastructure. NetTransact is specifically designed to reduce costs, enable growth, and jumpstart innovation. Over the years, newer or enhanced PivotPoint modules were added upon the existing BHPetrol's NetTransact platform from time-to-time, allowing BHPetrol to keep up with ever-changing business requirements.

(Source: GHL Systems Bhd. Nettransact Pivotpoints Loyalty Solutions Success Story: BP Malaysia's BHPetrol Ecard Loyalty Program.)

In light of its shareholding structure, being 30% by LTAT and 70% by Boustead Holdings Berhad, it can be said that BHPetrol is a 100% Malaysian-owned company. In September 2007, the Star reported that BHPetrol would not make race a criteria for applicants who wished to operate a BHPetrol petrol station. The announcement came about after Democratic Action Party Youth chief Nga Kor Ming "told reporters that he had received numerous complaints that non-bumiputras were not considered for a licence to operate a service station". (Source: The Star, 12 September 2007. All can apply to operate BHPetrol service stations now.)

Finally, in its 2008 Annual Report, we find some recent news about BHPetrol. It remains profitable despite challenging times.

Boustead Petroleum Marketing Sdn Bhd (BH Petrol) posted a smaller profit as a result of substantial inventory holding losses. BH Petrol invested a total of RM38 million to strengthen its market position in the retail petroleum, liquefied petroleum gas (LPG) and lubricant businesses. A significant portion of this investment was for the acquisition and construction of twelve new service stations strategically located across Peninsular Malaysia.

Meanwhile, BH Petrol’s brand awareness and market acceptance continue to be enhanced via effective marketing programmes. Testament to this is the growing popularity of its Infiniti brand of petrol based on customer feedback and increase in customer usage.

We also remain committed to growing our non-fuel business, specifically the service station’s retail segment. In the LPG segment, BH Petrol completed the acquisition of the remaining 50% of the LPG bottling plant in Pasir Gudang.


(Source: Bursa Malaysia website. Boustead Holdings Bhd 2008 Annual Report, from Cover to page 34.)

10 May 2009

Petrol Stations: Venue for Crime

NST recently reported that a group of Turkish tourists have been caught for a spree of robberies at petrol stations. From the report:

KUANTAN: While other foreign tourists come to Pahang to spend money on shopping and sightseeing, a few Middle Eastern people have been making money by stealing and robbing petrol stations.

The robbers travelled in groups of three to five people, including women and children as young as 14, and had been going on a robbing spree since February.

Police have identified some of the Middle Eastern men and women involved.

They would walk into the stations under the pretext of changing money before grabbing the cash in the counter.

(Source: New Straits Times, 27th March 2009. Turkish Group Robs Petrol Stations.)

Why is it that petrol stations are targeted by criminals? Perhaps, it is the fact that the petrol station remains stationary, and is a convenient target. Criminals can plan when and where to attack -- at their convenience. They may be hiding in vehicles parked at the petrol station, simply waiting for the right moment (or the right person) to launch their attack.

Carjacking
The incident above -- grabbing money at the counter -- is only a petty one. More serious crimes have occurred. People have been robbed at petrol stations and human lives harmed. In 2007, a Singaporean man lost his car at a Johor Bahru petrol station, which was located next to a police station. His fingers were nearly severed. From the Malaysian Bar Council's website:

As Mr Wong was about to get into his Honda, a black car pulled up.

Out jumped a man with a chopper and another with a baseball bat. The chopper-wielding robber aimed his weapon at Mr Wong's head.

The blade sliced into the tendons of eight fingers and the third and fourth blows struck him on the neck, causing deep gashes.

Covered in blood, Mr Wong staggered backwards. The two robbers then jumped into his Honda and sped away, with the black car following.

(Source: The Malaysian Bar, 24th Aug 2007. S'porean slashed, carjacked at JB petrol station.)

Cashiers
The temptation to take money from the petrol station cashier is nothing new. In May 2008, for example, smartly dressed robbers descended from their Toyota Alphard upon two petrol stations in Simpang Ampat and Lubok Cina (Alor Gajah) and extracted a total of RM5,500 and various valuables. (Ref: New Straits Times, 8th May 2008. Gang strikes at two petrol stations.) In September 2007, a security guard was killed when three youths robbed a Shah Alam petrol station after midnight -- all for the sake of RM4,000. (Ref: The Star, 1st Sept. 2007. Petrol station robbed, security guard dies.) In the second incident, the foolishness of the cashier in opening the door may be pinpointed as the main factor for the robbery ever taking place.

Banks
Another factor may be robbers which lie in wait at banks, watching people who make big withdrawals. But how often do robbers watch from within banks? It is possibly a collaboration between the robbers and the security guard. In September 2007, a 28 year old businessman was robbed at RM275,000 at a Petaling Jaya petrol station. The report mentions that he was with "a security guard that he had hired for the day". It was also reported, "As the armed robbers then ran towards their getaway car parked outside the station, the security guard fired two shots from his pump gun but missed." (Ref: The Star, 8th September 2007. Four men rob businessman of RM275,000 at petrol station.) How likely was it that the security guard would miss the robbers? The incident also appears suspicious in that the robbers were armed with parang while the security guard had a pump gun. (Found via Malaysia Crime Watch.) Perhaps, with two security guards (instead of only one), the incident could have been averted. In November 2006, a robber who robbed a petrol station at Cheras of RM50,000 was shot by one of two security guards. He died on the spot. (Ref: The Star, 30 Nov. 2006. Man shot dead after robbing petrol kiosk.)

Mat Rempit
Some of the blame may be fairly placed on Mat Rempit, who were recently reported as causing the death of two pregnant women. In June 2008, Mat Rempit at a Bangsar petrol station robbed five women (three sisters and two cousins travelling together) of RM3,000. (Ref: The Star, 4th June 2008. Cops to be ruthless on bikers who attacked, robbed women.)

Bloggers
The issue of security at petrol stations is not a new one. In August 2007, some members of the public blogged at the Star Online about petrol stations staying open at night. One particular user, "Ngguanhuah", wrote:
Good inhouse practices of keeping minimum cash for change, and keeping big amounts in a secured strongbox [which cannot be stolen] drastically reduce the incidence of robbery. Most petrol purchase transactions are by credit card, so the amount of hard cash at night is not too much.

(Source: The Star Online: Blog. 2nd Aug 2007. Can petrol stations be compelled to remain open 24 hours?)

Women
Due to carelessness, women have also been raped by robbers at petrol stations. In May 2007, a woman opened her car door for a robber at a Johor Bahru petrol station. Her husband had gone to the toilet and a robber had gestured outside her window with a parang. She opened the door because she feared for her three year old son. (Ref: The Star, 4th May 2007. Gang-raped in terror carjack.) She also lost her car that night. One month later, in June 2007, a 35 year old woman was raped when her 55 year old contractor friend was overpowered at a Johor Bahru petrol station. In this incident, the criminals left in another vehicle. (Ref: The Star, 14th June 2007. Another woman gang-raped.) (Found via Scott Thong's blog.)

Video
Finally, this video dated 6th Feb 2006 shows a robbery taking place at a Malaysian petrol station. It shows that robbers at a petrol station, late at night, would pretend to buy something so that the cashier will open the cash box.


I wonder which petrol station it was.

Family
Back to the story of the Turkish "family" -- using women and children is really a clever idea. In September 2008, newspapers in Hull, England, reported that an eight year old boy collaborated with an adult to steal "£150 from behind the counter at a petrol station in Sutton Road". (Ref: Yorkshire Post, 25 Sept. 2008. Caught on video: "Artful Dodger", 8, robs petrol station.)

Drive Thru
Robbing petrol stations, or robbing at petrol stations, is a terrible crime. It should be condemned and efforts should be made to upgrade security. One day, petrol stations will imitate fast food restaurants by having "drive through" counters. Petrol can be sold in containers and drivers can fill up in a secure area. Who knows? The petrol station of the future may have areas where an individual car can be isolated in a locked area for a few minutes. Petrol, purchased in cardboard cartons from a drive through dispensary, can be poured into the car. Once the car is filled, the driver can press a button and drive away safely.

If that day ever comes, the issue will shift from robberies at petrol stations, to: robberies after exiting petrol stations. But I doubt that it will come. Petrol station owners will not make extra income from newspapers, instant noodles, Fisherman's Friend, 100 Plus, etc.

09 May 2009

Watch: Oil Addiction (GOOD magazine)



Recently I came across this video. I thought that it was good when I first viewed it. I still do. It was obviously done up during the few weeks that culminated the peaking of oil at US$147 per barrel. While the panic causing events have passed, what is relevant is that oil is still being consumed and hybrid engine vehicles are still a rarity. Watching the video, I could not help noticing the matter-of-fact statement that 85% of the world's energy needs are provided by fossil fuels. Part of the underlying assumptions for this video is that population will always increase, leading to more and more demands for energy, food, etc.

Obviously, our dependency on oil as a source of energy will not change drastically -- not in the near future. Population needs will however increase, thanks to population increase. Many years ago the philosopher Malthus imagined that one day man would fail to obtain an adequate supply of food due to the constantly increasing population. But to date that has not been the case. (Perhaps Malthus' theory in relation to petrol had best be explored in another article). If we were to one day fail to find an alternative source of energy to replace fossil fuels, the solution would present itself simply: Go without electricity.

But that should not be the case. One day the oil wells will trickle dry. The oil wells which have been producing less and less oil will produce no oil. As peak oil comes closer and closer to realisation, it is likely that more and more people will turn to alternative sources of energy. Increasing demand for alternative energy, would mean economies of scale. In the end, it would mean economies of scale for one or more sources of alternative energy. The question is what source of alter energy? Casual observation would yield the conclusion that wind speeds in Malaysia do not reach the required velocities to generate the energy needed for our population. Even our best candidate of alternative energy for Malaysia (to date) is at great cost to Mother Nature -- surely, you have heard of the Bakun Dam.

The obvious solution is to tap into our abundant supply of sunshine and rainwater. Solar power and hydrogen extraction would be good solutions for the long term if the government backs it in a big way. Often left unsaid, is the environmental cost of solar power panels compared to burning fossil fuels. The fact is that production of solar power panels releases less air pollutants than conventional fossil fuel technologies. (Ref: ScienceDaily, 26th Feb 2008. Easing Concerns About Pollution From Manufacture of Solar Cells.) A recent discovery by Chinese / Japanese scientists may also lead to increased energy conversion in solar cells. (Ref: ScienceDaily, 5th Feb 2009. Natural Solar Collectors On Butterfly Wings Inspire More Powerful Solar Cells.)

Unfortunately, solar energy as a source of energy is not fully exploited in Malaysia -- despite our abundant sunshine. From a 2005 report by the Australian Business Council for Sustainable Energy:

The solar radiation in Malaysia is high by world standards. Even in Kuala Lumpur, a PV system receives 30% more energy than an equivalent system in Germany. Solar radiation varies from its lowest in the Klang Valley (Kuala Lumpur, Petaling Jaya) to Penang (Georgetown, northwest coast) and Kota Kinabalu (East Malaysia), where the highest values have been measured. Subject to location, a typical PV installation in Malaysia would produce about 900–1400 kWh/kWp. An installation in Kuala Lumpur would yield around 1000–1200 kWh/kWp per year.

Despite the abundant resource, solar PV applications in Malaysia are limited to mainly standalone PV systems, especially for rural electrification where the systems receive a significant subsidy. Other minor applications include telecommunication, street and garden lighting, and autonomous energy for parking ticket dispensing machines.

(Source: BCSE, August 2005. Renewable Energy in Asia: The Malaysia Report.)


Do we really want to wait for peak oil to become a reality before we start taking action? Well, let's look at the price of crude oil. As of today, OPEC's price basket for crude oil is USD$56.05 per barrel. The movement of the price basket shows an upward trend in the past week.

In fact, the following two graphs further show that the price of crude oil has been experiencing an upward trend on a week-to-week basis and also on a month-to-month basis.


(Source: OPEC's price basket)

A report dated 8th May, 2008, from Bloomberg confirms that the upward trend is likely to continue. (Ref: Bloomberg, 8th May 2008. Oil set to break resistance point, PVM says: Technical Analysis.) From the report:

Crude oil is set to reach $62.65 a barrel “in the near future” and rally to $78 within six months as prices retrace the surge that started in 1998, according to technical analysis by PVM Oil Associates Ltd.


It looks like commodity traders are due for another "bull run". For those in the oil and gas industry, it looks like good times will be back. But for the rest of the population, it is time to start weaning off our dependence on fossil fuels for 85% of our energy needs. It's time to start looking elsewhere.