30 November 2011

Homegrown Expert on Oil Booms (Skimmers)

Dear Reader,

Have you heard of Oil Booms? Actually most people may have heard of the Oil Boom in Texas at the early part of last century. It provided jobs and was the foundation of wealth for oil tycoons like John D Rockefeller. Unfortunately that's not what I have in mind. Today I'd like to inform you about an invention known as the "oil boom spill containment device".

From an article in Wikipedia:

A containment boom is a "temporary floating barrier used to contain an oil spill. Booms are used to reduce the possibility of polluting shorelines and other resources, and to help make recovery easier. Booms help to concentrate oil in thicker surface layers so that skimmers, vacuums, or other collection methods can be used more effectively. They come in many shapes and sizes, with various levels of effectiveness in different types of water conditions." 
Often the first containment method to be used and the last equipment to be removed from the site of an oil spill, they are "the most commonly used and most environmentally acceptable response technique to cleanup oil spills in the United States." 
Booms used in oil spills can be seen as they rest on the surface of the water, but can have between 18 to 48 inches of material that hangs beneath the surface. They're effective in calm water, but as wave height increases oil or other contaminants can easily wash over the top of the boom and render them less useful.
(Ref: Wikipedia, "Boom (Containment)", URL: http://en.wikipedia.org/wiki/Boom_(containment))


Here is an example of a commercial manufacturer and vendor of such oil booms: Canadyne Technologies Inc. which sells four types of "oil spill containment booms": pressure inflatable, self-inflatable, foam filled, and specialty.

You may also note that some of the articles referenced in the Wikipedia article refer to a certain Kaufui Wong. He is a lecturer at the University of Miami's School of Engineering. (Ref: University of Miami QEP Faculty Learning Community, URL: http://library.miami.edu/uml/flc/um-qep-fellows/2009-fellows/kaufui-wong/) He earned his MS and PhD in Case Western Reserve University in the USA. He earned his B. E. (Hons) Mechanical Engineering from Universiti Malaya.

I was pleased to learn he was born in Malaysia. He wrote a book on "Thermodynamics for Engineers", available from Amazon. Below is an extract of the text of the website, "About The Author":
Kaufui Vincent Wong grew up in Malaysia and came to the United States in 1973. As a youngster, he wished to be an engineer because of his passion for mathematics, which was accomplished when he obtained the bachelor’s degree with honors in mechanical engineering at the University of Malaya, Kuala Lumpur, Malaysia, in 1973. He obtained his PhD at Case Western Reserve University, Cleveland, Ohio, in 1976. 
His wish to teach engineering students from all over the world came true when he became a faculty member at the University of Miami, Coral Gables, Florida, in 1979. In 2000, he published his first book for engineering students. In 2003, he published his second textbook for graduate engineers. He has authored and coauthored over 160 technical papers. In the past decade, he has broadened his teachings by using mass media, including YouTube. He accomplished his personal goal of visiting all seven continents in 2001 when he completed his trip to Antarctica. 
(Source: Amazon, "Thermodynamics for Engineers (Mechanical and Aerospace Engineering Series)". URL: http://www.amazon.com/Thermodynamics-Engineers-Mechanical-Aerospace-Engineering/dp/0849302323)

He is also an inventor and his invention is patented as US Patent No. 7056059.

Click to visit his personal website.

Malaysia boleh!

21 November 2011

Petronas CEO ... one and a half years on

Dear Reader,

Earlier this year The Star ran an article about the guy who took over Petronas CEO Hassan Merican's place. Actually, it was part of a larger article but there was a fair bit about the new Petronas CEO as well. His name is Datuk Shamsul Azhar Abbas, and below is the extracted text of the article that concerns him.


Datuk Shamsul Azhar Abbas
President and chief executive officer
Petroliam Nasional Bhd
 
Feb 10 of this year will mark Datuk Shamsul Azhar Abbas' first year anniversary as Petroliam Nasional Bhd's (Petronas) president and chief executive officer. 
Shamsul, who took over Tan Sri Mohd Hassan Marican's position as the Petronas' chief last year, is no rookie to the oil and gas industry having served with the Petronas group since 1974.

He was the president and CEO of Petronas' Malaysian International Shipping Corp Bhd between 2004 and 2009. 
Within his first year as Petronas' chief, Shamsul has made changes to the national oil company's strategy by scaling back on exploration works overseas and beefing up domestic exploration instead. 
The domestic oil exploration will see Petronas drill deeper for oil and gas in the shallow waters of Malaysia and increase the amount of oil it pumps out from existing wells in the country. 
The group's new direction is also to acquire proven oil and gas reserves instead of drilling for them. The fruition of the change in strategy will not be evident immediately and can only be seen in the coming years under Shamsul stewardship. 
Aside from that, Petronas took the lead in the newly released tax incentives for the oil and gas sector announced under the Economic Transformation Programme (ETP). The incentives are aimed at boosting the development of oil and gas resources and to stimulate domestic production of petroleum resources to arrest the projected 1%-2% decline in domestic oil and gas production. 
Shamsul says that the new incentives could spur the production of 1.7 billion barrels of oil equivalents from 25 marginal fields over the next two decades. The incentives will make developing smaller or marginal fields more commercially viable due to the heavy investments needed. 
Petronas says that it will encourage new foreign and local companies to develop these marginal fields and not confine it to the big oil companies. 
The new year will put the spotlight on how the development of new marginal fields will be farmed out and who will be the beneficiaries as well as Petronas' proposed introduction of a new production regime. 
An idea that is being floated for development of marginal fields is the commissioning of risk service contracts, whereby the contractor who explores and drills the field will bear the investment risks.  
Another area of focus for Shamsul will be the review of the gas subsidy borne by Petronas, which stood at RM19bil for its financial year ended March 31, 2010. Petronas subsidises gas for both power and non-power sectors and is working with the Economic Council on how to set-up new gas prices. - By JEEVA ARULAMPALAM 
(Source: The Star Online, 1st January 2011. "Those who will count in 2011" URL: http://biz.thestar.com.my/news/story.asp?file=/2011/1/1/business/7575052&sec=business)

Thanks to this article, I learned that the new CEO has several ideas about the strategy and direction of Petronas. By going into proven oil and gas reserves, it seems that Petronas will reduce risk of drilling for duds. The logic may be, why waste good money on unproven oil fields? But this does not mean the end of exploratory works. Indeed, the shift is from overseas exploration to local exploration, and drilling deeper and producing more from Malaysia's oil reserves. The question that pops up is whether doing so is in line with the so-called reservoir management plan.

To strengthen its competencies and to enhance its businesses, we can see from the market news recently that:


  1. Petronas Learning Center (formerly known as PERMATA) is signing an MoU with UniRazak's Razak School of Government to enhance its portfolio of programmes (Ref: The Star Online, 11th November 2011. "Two learning institutions team up" URL: http://biz.thestar.com.my/news/story.asp?file=/2011/11/11/business/9881592&sec=business);
  2. "... Petronas' decision to set up an industrial training and learning center in Kimanis to provide training programs and courses for Sabahans so that they could easily fit into the many segments of the oil and gas and related industries." (Ref: Malaysian Digest, 13th October 2011. "Petronas Projects in Sabah, a "1Malaysia Gift", Say Ex-Servicemen" URL: http://www.malaysiandigest.com/news/33289-petronas-projects-in-sabah-a-q1malaysia-giftq-say-ex-servicemen.html)
  3. "Petroliam Nasional Bhd (Petronas) and Shell Malaysia have signed a heads of agreement for two 30-year production-sharing contracts (PSCs) for enhanced oil recovery (EOR) projects offshore Sarawak and Sabah." (Ref: The Star Online, 12th November 2011. "Petronas, Shell in production-sharing oil recovery deal" URL: http://biz.thestar.com.my/news/story.asp?file=/2011/11/12/business/9886917&sec=business)
  4. It is improving the management and the margins of its wholly-owned hospital Prince Court, and aims to be profitable by 2013. (Ref: The Star Online, 20th August 2011. "Finding a Cure for Prince Court." URL: http://biz.thestar.com.my/news/story.asp?file=/2011/8/20/business/9187538&sec=business)
  5. In June 2011, Petronas invested USD1.1 billion on Canadian shale gas. The deal closed in August 2011. (Ref: The Star Online, 7th June 2011. "Petronas' bet on shale gas" URL: http://biz.thestar.com.my/news/story.asp?file=/2011/6/7/business/8847044&sec=business) (Also refer to LNG World News, 3rd August 2011. "Canada: Progress Energy and PETRONAS close Montney Shale, LNG Deal" URL: http://www.lngworldnews.com/canada-progress-energy-and-petronas-close-montney-shale-lng-deal/)
  6. "Petronas will invest in a major RM60bil integrated refinery and petrochemical complex in Pengerang, Johor, touted to be its largest.... it is is expected to be commissioned by the end of 2016." (Ref: The Star Online, 14th May 2011. "RM60bil Petronas project will fuel massive spin-offs, says PM" URL: http://thestar.com.my/news/story.asp?file=/2011/5/14/nation/8685234&sec=nation)
  7. "PETRONAS... has entered into an agreement ... to acquire a 30% stake in GMR Energy Singapore Pte Ltd (GMRE). The proposed acquisition marks PETRONAS’ maiden venture into the international power market." (Ref: LNG World News, 29th September 2011. "Petronas enters deal to buy 30 percent stake in GMR Energy Singapore" URL: http://www.lngworldnews.com/petronas-enters-deal-to-buy-30-percent-stake-in-gmr-energy-singapore/)
  8. Petronas may have considered, but currently denies "a 1.71bil (GBP?) (RM8.49bil) cash bid to buy Heritage Oil Plc, an independent upstream exploration and production company listed on the London Stock Exchange (LSE)." (Source: The Star Online, 11th December 2010. "Petronas denies report on RM8b bid for UK firm" URL: http://biz.thestar.com.my/news/story.asp?file=/2010/12/11/business/7601818&sec=business)

Actually, acquisitions are a quick way to gain entry into a foreign market as well as to avoid repeating the learning process for competencies already possessed by the target acquisition. What matters is whether the competencies developed earlier by the target acquisition are relevant to the acquiring company, and whether the skills developed thereto can be transferred to the acquiring party. Maybe there should be a piece about mergers and acquisitions in the future.

Thank you for reading!

16 November 2011

Petronas Makes Major Discovery Offshore Sabah

Dear Reader,

After a long time of not putting up posts, I thought that it'd be nice to put up some content on this blog again. Here is a piece of news that caught my eye recently, from The Star Online.
Petronas Carigali Makes Major Oil Discovery Offshore Sabah 
PETALING JAYA: Petronas Carigali Sdn Bhd, the exploration and production arm of Petroliam Nasional Bhd (Petronas), has discovered oil 100km off the northwest coast of Kota Kinabalu.

.....

“Current preliminary estimation of the hydrocarbon-in-place from this discovery is 227 million barrels of oil equivalent, with expected upside potential,” it said.

The company added that there were plans to further appraise the discovery in the near future.

The 2011/2012 Economic Report released in early October estimates the country’s crude oil production to fall 6% to 600,000 barrels per day before picking up next year.

This is following the completion of the Reservoir Management Plan as well as the resumption of production in several oil fields in Sabah.

According to the report, as at Jan 1, there were an estimated 5.86 billion barrels of crude oil reserves with an expected lifespan of 25 years.

Meanwhile, gas reserves stood at 88.9 trillion standard cu ft, sufficient to last 39 years, it said.
(Source: The Star Online, 16th November 2011. "Petronas Carigali makes major oil discovery offshore Sabah" URL: http://biz.thestar.com.my/news/story.asp?file=/2011/11/16/business/9909344)



 So, dear Reader, after reading the above article, I concluded that it means that:
  1. Malaysia's estimated oil reserves have just received a boost;
  2. According to our nation's petroleum planning department's estimates, we should have about 25 more years of crude oil reserves (and this number should be revised upwards with this discovery);
  3. At first blush, the discovery may yield about 227 million barrels of oil, but this is only an initial estimate and may be revised upwards;
  4. Through this article I learned about Petronas's Reservoir Management Plan*, but it seems that it's old news, and you can see it in various articles on Petronas from 2009, 2010 and 2011; and
  5. I may be back to blogging and I hope that you will leave some comments for me!

On a side note, you may notice that the site looks slightly different now. This is not going to be one of those guessing games where you try to guess whether I got a haircut yesterday, but I made some changes to the CSS and in terms of website, it's a little like a haircut. It's just a little change that should make links look a little different.... if you are using Mozilla Firefox, or Google Chrome. For those of you stuck with Internet Explorer, I know it looks rather plain, I'm sorry about that. I'll try to learn a little bit more CSS.

Thank you for reading!
.................................
Notes
* It was also mentioned in Petronas's 2010 Sustainability Report at page 18, get it here.