ACKNOWLEDGEMENT

Assalamualaikum w.b.t. We would like to express the deepest appreciation to our

Principle of Managements lecturer, Sir Muhammad Najib Bin Noh who has shown the attitude
and substances of a genius and excitement in regard to teaching. Without his supervision and
consistent help this assignment would not have been possible.
We would like to thanks to our committee members, Nurul Husna, Siti Raihana, Shahira
and Zafri also to the colleagues of BBA in Islamic Finance, where work demonstrated to us that
concern to this assignment together with share the info and knowledge and also spend their time
by doing this assessment.
In addition, we would like to say thanks to Academic Management Department who
introduced and teaches us about this program. We thank the committee of University Kuala
Lumpur Business School for the opportunity that gift to us to be one of the student in this
college.
A million thanks to all who was involved in this Principle of Management assignment.

INTRODUCTION
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MMC Oil & Gas Engineering Sdn. Bhd (MMCOG) a subsidiary of MMC Corporation
Bhd was established in 1984 to provide engineering design services to oil and gas industry and
petrochemical. The services consists in particular the following areas:

Engineering design of oil and gas production and processing facilities offshore

Engineering design of facilities onshore receiving and loading terminals

The Main Office is located at Unit 1-1, Ground Floor of Menara Promenade in Kuala

Lumpur with the flexibility to develop and meet the needs of the project. They also have satellite
offices in Kerteh (Terengganu), Miri and Bintulu (Sarawak).
MMCOG has enjoyed a steady growth since its inception with a staff numbering more
than 550 people, consisting experienced engineers, draft persons and support staff. The company
was accredited with Quality Systems MS ISO 9001 since December 1993 and MS ISO
9001:2000 in 2002.
Multidisciplinary services that we are provide include:

Floating, production, storage and offloading (FPSO) topsides design

Civil, Marine ,Structural design and drafting

Technical Safety design

Pipeline & Subsea Engineering

Cost Estimate and Drafting

Cost control and Budget Planning

Possibility studies

Project and Construction Management Services including EPCM and PMC

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Approvals Authority

Document Control

Procurement Services Management

Design and Electronic Equipment and formulation

Coastal received a loading facility and terminal

Petrochemical plants and Refineries

Mechanical, drafting and Piping design

Their resources allow them to provide complete engineering services for large and small

sized projects from conceptual studies, budget preparation, planning, expound design in detail
and drafting of construction management and commissioning.
However, their company still facing the issue that still not complete yet. The major issue
for oil and gas is a political risk which is the type of risk faced by investors, companies, and
governments. It is a risk that can be understood and managed with foresight and investment
Casual. Geological risk also main issue for oil and gas. The companies exploring a challenging
environment, such as deep-sea platform in the middle of the ocean.

In addition, the issue for oil and gas are the demand and supply risk. Demand risk
associated with occurs or may occur in the flow of products, information, and cash which comes
from within the network, between the company and market focus. Then, Supply risk which risk
of upstream supply equivalent demand, it relates to the disruption occurred or may occur to the
product or information that caused the network, focused upstream company.
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OBJECTIVE
The objectives of the project are:
1. To train students being familiar with the challengers in applying the theory and principles
of Principle of Management to organization structure, operation, and admission.
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2. To gain experience in research and solving real statistical data analysis and to improve
soft and hard skills, communication, and management skills

ISSUE MMC OIL AND GAS

1. One of the major issue for oil and gas is political risk
As it is known that political issue can affect the oil and gas industry through its regulatory
enforcement. A typical oil and gas company generally is subjected to a range of regulations with
limitations which include where, when and how extraction is done. Nevertheless the law and
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regulations can differ from one state to another. Hence political risk generally would increase one
oil and companies on deposit abroad.
In a general situation an oil and gas company would prefer to invest in countries with
stable political system with history of granting and enforcing long term leases. However should
there be companies which opted to invest in countries which does not match their preference,
problems may arise such as sudden nationalization and /or shifting political winds. It is also to be
noted that the government in the country that the oil is being extracted may change its mind after
the capital is invested, in order to gain more benefit.
Political risk is obvious especially for developing countries with unstable dictatorship and
history of sudden nationalization for example enforcement of regulations that allow changes in
foreign ownership rules to guarantee that domestic corporations gain an interest. In order to
mitigate the risk, the oil and gas company is to ensure careful analysis and good sustainable
relationship with international oil and gas partners is carried out in order to remain in business in
the long run .

2. Geological risk also can be main issue for oil and gas
The oil and gas company has to face another important issue, which is geological issue
and its risk. They have to explore many places and new environment that are more challenging,
such as deep sea platforms in the middle of ocean or extracting oil from shale. This is because
the oil they used to drill and easily obtain is now gone. So, that is why they have to search for
new spot to get the oil.

Although, there is no doubt that geologist nowadays can make extremely accurate
prediction on how much oil is actually accessible in the reserves. But, the problem with less
conventional oil extraction method make it harder to assess how much oil is accessible in this
unpredictable geological environment.
In conclusion, geological risk and issue has cause a lot of trouble to the oil and gas
company. Whether they like it or not, they have to face it as it was natural disaster and must think
rationally and efficiently on how to solve the geological issue.

2. The third issue for the oil and gas are the supply and demand risk
Another major problem for oil and Gas Company are the supply and demand risk.
Disastrous can happen if a companys operation and cash position was disrupted because of the
supplier shutdowns or key customer bankruptcies. These cases can effects throughout the value
chain. Therefore, it is difficult to understand portfolio and channel margins if the third party
providers face financial problem which cause operational performance and causing it to
slowdowns.
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As we all know, the oil and gas operation take a lot of capital and time to get going, and
they are not easy to control when prices go down, or ramp up when they increase in price. So,
that is why supply and demand shocks are a very real risk for oil and gas companies. In addition,
the main reason for the price of oil and gas so volatile is because the uneven nature of
production. Other than that, other economics factors also makes the price up and down due to the
financial crises and macroeconomics factor can dry up capital or otherwise affect the industry
independently of the usual price risk.
In conclusion, supply and demand risk are one of the issue that must be face by oil and
gas workers. They have to think smart and to control the price of oil so that it does not volatile
for a long term.

RECOMMENDATION
1. Dealing with politic violence
As we know, politic violence is a social phenomenon, which gives everyone and anyone
no good weather it is for perpetrators or its victim. In addition, it also will affect economic,
political, social cultural, educational and health services. Many individuals or group believes that
their political system will not respond to their political demands. So what they will do? They
believe that violence was only not justified but also necessary just to get what they want.
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The oil and gas leader and the politic parties should evolve as a mechanism of democratic
governance instead of servicing as an organized criminal enterprise used for seeking, gaining and
retaining power in order to rob public treasury. The solution to this political violence in any
society or company including oil and Gas Company is justice. Each one of them must stop
overzealous ambition, lost for power, selfishness, voluptuousness, pride, anger and revenge.
They should learn to have a passion of leadership no matter what will be our political need.
Dialogue should be allowed to prevail over the language of violence.
In conclusion, the oil and gas leader and the politic parties should negotiate properly and
must support each other to prevent political violence. A nation will thrive with the support from
other civilization and company.

2. Geological risk
The other issue or risk that oil and Gas Company has to face is geological risk.
Geological hazard or risk are basically been observed by educated and trained engineering
geologist who is expert in interpretation of landforms, earth-structure interaction, earth process
and in geologic hazard mitigation. Not only the engineering geologist provides recommendation
and design to mitigate for geological risk but trained hazard mitigation planners also try to help
by assist local communities to identify strategies for mitigating the effects of such hazards and
developing plans to implement these measures.

One of the steps to be taken in mitigation is that the stability of the sloping earth can be
improved by the construction retaining walls, which may use techniques such as slurry walls,
shear pin tiebacks, soil nails or soil anchor. Larger projects may use gabions and other forms of
earth buttress. Next, the manager of the oil and gas company can command their workers to build
revetments to protect shorelines and streams from scour and erosion. Other than that, they can
improve the soil and rock itself by improved by means such as dynamic compaction, injection of
grout or concrete, and mechanically stabilized earth. Last but not least, Additional mitigation
methods include deep foundation, tunnels, surface and sun drain systems, and other measures.
In conclusion, there are lot of methods that can be done if there is geological issue. The
leader of the oil and gas company must be fair and square in managing and distributing the work.
This is the point where leadership take place.

3. Demand and supply

Managers need to assess their performance from multiple perspectives in working with
suppliers and carriers including quality. Then, they must deliver things on time, check and
maintain the performance of their operations. Furthermore, they also need to focus on the
financial statements and cash position. The performance evaluation should result in an overall
rating provider or carriers and the company bears the risk by working with each organization.

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The last area of focus to increase market awareness and industry organizations current
power. It also allow a companies to have better visibility to stresses not only the within its
organization but also to suppliers and vendors. Elements such as competitiveness, trends,
emerging technologies, market characteristics, and the availability of substitutes provide an
understanding of the current suppliers / carriers compared to other players in the market.

In conclusion, as a managers, there are a lot of things that they need to consider. As
mention, they need check and maintain the performance of their operation and focus on final
statement and cash position. Thats indeed a lot of handworks but thats what a good leader do.

CONCLUSION
First of all, in Malaysia, MMC Oil and Gas Engineering Sdn Bhd (MMCOG) is one of
the biggest and established oil and gas companies. In complete engineering services are catered
from small to large size of project. Over the past quarter century not be sacrificed. We must come
to appreciate the importance of our environment. We must to realize that the good company have

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material goods and services. However, from the issue given such as politics risk, geological risk,
and supply and demand risk we know that the issue will affect the company.

Furthermore, from the politics risk we can say that the politics risk commonly increase
when oil and gas companies are working on deposits abroad and to reduce the risk that company
must prefer another country that have stable political system for long term. Then, for geological
risk the company must very excellent in their strategy. This is because, a very good strategy can
lead to the success such as they have every good location that can produce lots of oil to the
company. When the higher the company produces oil, the higher income to the company.

Next, the third issues are supply and demand risk. As we know the economic global
always change every time. We cannot predict what can happen. So, we must maintain our
production and give the good service to others. All in all, actually every problem have their own
solution. We must have capable to come out with the good solution. The good solution will lead
successful to the company.

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