Updates on policy in Malaysia

Capt Ahmad Imran Mohd Azmi

MOGSC EXCO

17th Sept 2019, Marina Bay Sands, Singapore

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1. Introduction MOGSC

2. Implementation of Integrated Logistics Control Tower (ILCT)

3. Vessel requirements for ongoing developments

4. Updates on policy in Malaysia

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 ABOUT MOGSC

1. The Malaysian Oil & Gas Services Council or

MOGSC was formed on 1st December 2003
2. An initiative to establish an association driven
and promoted by the services sector of the
Malaysian Oil & Gas Industry.
3. To promote the capabilities of Malaysian
service providers and showcase Malaysia as
the regional hub for the Oil and Gas Industry.
4. Membership of 500+ companies that
represent all sectors within the industry
5. A platform to contact and network with local
players
6. To address emerging issues through group
consultation

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Sharing of information and assisting the industry
Implementation of Integrated Logistics Control
Tower (ILCT)

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 INTEGRATED LOGISTICS CONTROL TOWER (ILCT)
• The Integrated Logistics Control Tower (ILCT) aims to enable
vessel sharing across 14 Malaysia producing Petroleum
Arrangement Contractors (PACs) to lower the logistics cost
across upstream operations in Malaysia.
• An initiative under Cost Reduction Alliance 2.0 or better known
as Coral 2.0. Driving cost optimization through 11 focus
initiatives
• In 2018, over 20 work packages under the Integrated Logistics
Control Tower (ILCT) contracts awarded, which encompass the
service of 124 offshore support vessels (OSVs) — more than a
third of total industry supply — up to 5 years basis.

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 IMPLEMENTATION OF ILCT

• Encountered multiple obstacles towards ILCT implementation

such as vessel priority, marine HSE standardization, vessels
technical specifications, joint coordination agreement, liabilities,
cost allocation, accumulative contract value re-distribution, and
governance matters.
• ILCT Committee comprises of PETRONAS and PACs members
with the key roles to control the overall allocation of vessels,
mediate any conflict, and improve ILCT performance.
• ILCT Manual was jointly developed by PETRONAS and PACs to
govern the implementation of ILCT and is regularly referred by
PACs as guiding principle in operating vessels.

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 RESULTS OF ILCT

• Synergy resulted in 12 vessels

reductions from 142 to 130 vessels
that equivalent to RM100 millions of
cost savings yearly.
• PETRONAS and PACs benefit from this
synergy mainly through optimized
traveling route, which results in lower
Daily Charter Rate and fuel cost.
• Supports PETRONAS’ agenda to
nurture capabilities of local vessel
owners to become regional vessel
operators.

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INTEGRATED LOGISTICS CONTROL TOWER (ILCT)

MOGSC MLWG visit to ILCT control center on 9th July 2019

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Vessel requirements for ongoing developments

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 PETRONAS ACTIVITY OUTLOOK 2019-2021

• In the latest activity outlook, it is expected to

roughly double the demand for jack-up rigs,
from 9-10 units in 2018 to approximately
16-18 in 2019, and 17-19 units in 2020-
2021.
• Increase in greenfield projects and brownfield
activities.
• 2019 projection for offshore installations has
been raised from 6–7 to 8–9, with 5-13 units
projected for 2021.
• First time PETRONAS is sharing the list of
major contracts in key categories and its
associated services
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MARINE VESSELS OUTLOOK
Ø Better outlook for marine vessels on the back of an
expected pickup in drilling activities
Ø A new Frame Agreement established to support Drilling
and Development requirements.
Ø Remaining requirements catered via spotchartered
contract or bundled in maincontractor scope.

38-44 vessels for AHTS >100MT

67-72 vessels for AHTS =<100MT
49-52 vessels for PSVs/SSVs
80-83 vessels for FCBs
MARINE VESSELS OUTLOOK

Ø Positive outlook can be expected for FCBs.

Ø Higher speed vessels (>30kn) or Catamaran design
vessel with lower operating cost are seen as good
alternatives to chopper.

Ø Positive outlook can be expected for PSVs/SSVs.

Ø Increase in Drilling activity will boost demand further
for PSVs/SSVs.

Ø Positive outlook is expected for AHTS to fulfil the

increase in Development activity, especially for drilling
and production.
DECOMMISSIONING OUTLOOK
Well Abandonment

- to prepare a well to be closed permanently

- insufficient hydrocarbon to make production activities
commercially viable, or after production operations have
drained the reservoir.

Upstream Facilities Decommissioning

- to permanently make safe the facilities such as WHP &

CPP and Subsea Tree, FPSO/FSO and Vent platforms at
t h e e n d o f p r o d u c t i o n l i f e c yc l e o r w h e n t h e r e i s
insufficient hydrocarbon
WELL ABANDONMENT

Well Abandonment planned, with different complexities

• 2019 ~50 Wells

• 2020 ~40 Wells
• 2021 ~60 Wells

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WELL ABANDONMENT

The following key services are required

• Drilling Rigs
• Hydraulic Workover Units (HWUs)
• Offshore Support Vessels (OSVs)
• Lifting Services
• T h i r d Pa r t y D r i l l i n g S e r v i c e s i n c l u d i n g S l i c k l i n e ,
Cementing, Fishing, Perforation-Wash-Cement etc.

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UPSTREAM FACILITIES DECOMMISSIONING

WHP & CPP (Topside & Jacket)

• 2019 ~800 metric tonnes

• 2020 ~15.5k metric tonnes
• 2021 ~27.7k metric tonnes

Subsea Tree, FSO and Vent Platform

• 2019 ~ 180 metric tonnes

• 2020 ~ 460 metric tonnes
• 2021 ~ relocation of FSO

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UPSTREAM FACILITIES DECOMMISSIONING

The following key services are required

• Engineering Services
• Decommissioning yard/facility
• Transport and Lifting Services
• Decommissioning cutting services e.g.: Diamond Wire
Cutting, Abrasive Water Jet Cutting, etc.
• Other Services such as Underwater, Decontamination,
Remediation, etc.

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Updates on Policy

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 LNG POWERED OSV

• Strategic intent for Malaysia to become the

regional LNG bunkering hub.
• PETRONAS advocating LNG as the preferred
marine fuel of choice.
• Migration of local (currently diesel-fueled) OSV
fleet to LNG, as the cleaner option.
• The first commercial LNG Bunkering is poised for
start-up by end 2019 from RGT2 (Pengerang,
Johor) and RGT1 (Sg Udang, Melaka), followed
by KSB (Kemaman, Terengganu) and ASB (W.P.
Labuan).
• Dual-fueled LNG-based engines are expected to
be the future solution.

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LNG POWERED OSV

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Thank You!

18 August 2016 17