Petronas: ‘Plenty of jobs in O&M phase’

Published: 2013/10/16

By Roziana Hamsawi, Business Times

RECURRING INCOME: Bumi firms urged to focus on operation and maintenance segment of Petronas projects

Bumiputra oil and gas companies should tap opportunities present
at the operation and maintenance (0&M) phase of any Petroliam
Nasional Bhd (Petronas) projects, said its chief operating officer Datuk Wan Zulkiflee Wan Ariffin.

Analysts estimate that Petronas allocates between 10 and 20 per cent of its capital expenditure (capex) on the 0&M of its assets.

The national oil and gas company has set aside RM300 billion for capex over a five-year period, starting from 2011.

O&M-related works, which come into play at the post-commissioning stage, are more longterm in nature. Hence, O&M jobs are normally seen as recurring income-based contracts.

With this in mind, Wan Zulkiflee urged Bumiputera companies to look at opportunities at the post-commissioning phase, including
participating in the O&M side of the business.

On the RM60 billion Refinery and Petrochemical Integrated Development (Rapid) project, Wan Zulkiflee said O&M related jobs will make up 20 per cent of its construction cost.

Post-2019, the value for O&M related jobs could run up to as high as RM20 billion, he added.

Wan Zulkiflee said Bumiputera participation at O&M stage is expected to reach 70 per cent at the Rapid post-commissioning phase, with the remaining coming from foreign firms.

Maybank Investment Bhd in a June report said oil and gas companies such as SapuraKencana Petroleum Bhd, Malaysia Marine and Heavy Engineering Holdings Bhd and Petronas Gas Bhd are among the top names vying for operating exposures to Rapid projects.

He noted that the current trend shows that Bumiputera companies prefer to bid for construction contracts which have a certain
amount of high risk attached to it.

“Many new companies tend to focus on construction contracts, where you either make or break,” he said, adding that “post-commissioning contracts are more long-term and sustainable”.

On the progress of the Petronas vendor development programme for Bumiputeras, Wan Zulkiflee said over the last 12 years, 76
vendors have been assisted.

He added that less than 10 per cent of those assisted ceased operations after the end of the five-year period, when Petronas no longer “protects” the vendors.

Read more: ‘Plenty of jobs in O&M phase’ http://www.btimes.com.my/articles/20131015231550/Article/#ixzz2nLEF81ls

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About artidj

I started working as a field engineer in Oil & Gas industry back in 1996. I do this news clipping of the industry and the geography I am interested in, mainly for my own information. I'm glad you find it useful.
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