PETRONAS Plays Up Technology, Efficiency Gains in Tough Times
A change of guard at Malaysia’s national oil company (NOC) PETRONAS amid unfavorable oil price movements spells the start of a tighter fiscal regime, but instead of outright cost cutting, its new CEO is paying more emphasis on continued investment in differentiating technologies and increasing operational efficiencies.
Wan Zulkiflee Wan Ariffin understands as the new captain at Petroliam Nasional Berhad (PETRONAS), he needs to steer the company through a “drastic downturn” with market conditions completely reversing those of the reign of his predecessor, Shamsul Azhar Abbas.
Wan Zul, as he is commonly known in Malaysia, acknowledged the tough market conditions during his opening speech at Asia Oil & Gas Conference 2015, flagging the 50 percent decline in Brent oil prices from over $100 a barrel a year ago to mid-$60s.
PETRONAS has already announced up to 15 percent and 25 percent cuts in its capital expenditure (CAPEX) and operating expenditure respectively, but Wan Zul indicated the focus is on “improving productivity and eliminating inefficiency”.
The new captain elected instead to flag an industry collaboration, CORAL 2.0, set up to streamline the cost structure across the value chain of domestic petroleum industry.
Twenty-five petroleum arrangement contractors in Malaysia including Royal Dutch Shell plc, Repsol S.A.’s subsidiary Talisman Energy Inc., Total S.A., Exxon Mobil Corp. and ConocoPhillips Co. have signed on to share best practices under CORAL 2.0.
The initiative is aligned with Wan Zul’s vast project management experience accumulated with PETRONAS, which suggests the new CEO could be well-placed to guide the NOC through the downturn, as one Malaysian veteran tells Rigzone.
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