Human Resource (HR) professionals play an important role for the company as an organization is not able to build a good team of working professionals without its own powerful human resources. Their key functions include recruiting people, training them, performance appraisals, motivating employees as well as ensuring workplace safety and etc. As the oil and gas industry is suffering, their decisions will eventually put an ink to one’s future in the company.
It’s a challenging time for all HR in Oil & Gas. The price per barrel is fluctuating, companies are going through re-structuring and people keep going out and rarely coming in. This is the current scenario in the world of oil. Realizing on this matter, the Malaysian Oil & Gas Services Council or known as MOGSC has organized a special and meaningful session of Oil & Gas HR Forum to discuss on how HR Professionals to step up and prepare their organizations for the turbulent journey ahead.
The session was beautifully engaged as they managed to have the honorable Ybhg. Dato’ Raiha Azni Abd Rahman, the Senior Vice President of Human Resource Management of PETRONAS on the 23rd of February 2017 in Impiana Hotel, Kuala Lumpur along with more than 150 attendees. Dato’ Raiha in her keynote speech highlighted that as the industry is now at its low, companies should focus on the training & development for the talent which should be a continuous investment as PETRONAS starts as soon as secondary school. She also mentioned that Malaysia has Top Talents around the world, and the industry should not lose it as they might be the right leaders in future. PRODIGY is one of the programs that PETRONAS did with the collaborations of service providers in Malaysia to train good graduates to cater expectation and demands from the industry, she added.
The session was then continued by the Vice President of MOGSC & also Mentor of Competency & Training Working Group (CTWG), Ir. Megat Zariman Abdul Rahim by giving an overview on how MOGSC’s progress on its 14 years serving the industry. MOGSC is the leading non-profit association and the most-proactive in the mission to promote the development of the Malaysian Oil & Gas Service Sector and also as a regional hub. This year, MOGSC introduced the Oil & Gas Competency Development ROADMAP with the objective to establish MOGSC as oil & gas center of reference for competency and training, and with the hope to fill up the skills gap of talents in Malaysia.
The highlight of this session was the Panel Session: Skills Shortage in Malaysia – A Myth or Reality, chaired by Ir. Megat Zariman Abdul Rahim. The line of impressive panels that we had the other day was Mdm. Shareen Shariza Dato’ Abdul Ghani, CEO, TalentCorp, Mdm. Kartina Abdul Latif, Senior Executive Director, PwC, Mdm. Nelly Francis, General Manager of Education & Learning, PETRONAS, Mr. Syed Azlan Syed Ibrahim, Senior Vice President, MPRC and Mdm. Sharifah Zaida Nurlisha, MOGSC President. It’s the most highlight topic as we encountered a lot of retrenched people and fresh graduates who struggle to find jobs, and surprisingly based on PwC, 350 000 jobs cut happened globally in the Oil & Gas industry as of end 2016.
Are they incompetent to the industry? Previously, Dato’ Raiha also highlighted that Asia has the younger workforce in Oil & Gas as compared to Europe & United States. Unfortunately, because of the skill gap and the downturn, many of the groups as mentioned above left the industry and only very low percentage of them returning. This is an alarming issue to the industry.
During the forum, the chair questioned each of the panels on the main question itself, is it a myth or reality? Mdm. Kartina was the first one to answer and she said it depends on the adaptability of the business. She highlighted that based on PwC research battle for talent –talents & skills shortage, they find out there is need to develop and attract STEM (science, technology, engineering, math) and vocational talent to support business demand. Businesses need to understand talent expectations of the talent segments which include both parties in order to build the talent pipeline. Her response was also supported by Mdm. Nelly Francis of PETRONAS and she advised that the industry first need to understand the supply and demand. Employers need to see on the specific details to do the assessment and reliability of their workforce skills. That is where organizations like PETRONAS Leadership Center & MOGSC could play an important role.
Mdm. Sharifah of MOGSC, however had different perspectives; she didn’t see the shortage of skills among Malaysian talents. We have many talents with impressive skills in the industry and there are many training providers and technical training centers which can cater to the industry needs, for example Institut Teknologi PETRONAS (INSTEP). Earlier, the CEO, Mr. Chandramohan also shared the capabilities of INSTEP on simulating the real plant scenarios in a safe environment and not to forget their strong partnerships, alliance with the industry and clients. Mdm. Sharifah also mentioned that, maybe because of the financial restriction of the company limits the skills learning these days. Mr. Syed Azlan from MPRC also claimed that there is no skills shortage in industry. Perhaps, in discussing this matter, he did clarify to put in-depth on what shortage you mean? Surprisingly, there is no one in Malaysia who has specific data on the skills shortage.
On the other hand, the CEO of TalentCorp Malaysia, Mdm. Shareen Shariza coming strong as yes, there is skills shortage in Malaysia especially the high skilled ones. Most of the high-skilled individuals or baby boomers are leaving the industry because they are offered an early retirement package and unfortunately, the middle layers are left hanging as there are no transferring and retention of knowledge and skills. HR will need to understand the availability of talents and significant differences when planning for replacement hires and training requirements. This decisive group will need to understand the succession of business in five, ten, and fifteen years ahead. PwC also highlighted earlier that the most difficult skill to find in Oil & Gas Industry is leadership according to 71% of the CEO’s interviewed. Probably the industry’s top priorities now are the pipeline of leaders of tomorrow and workplace culture to nurture talents.
This alarming issue should be encountered by the HR Group as we go along the hardship journey of Oil & Gas Industry. HR plays a bigger role now more than ever. Organizations need to change their business strategies and modify their human capital strategy accordingly. The talents we have should not be wasted. These newer technologies and the new landscape are causing shifts in skills needed by companies. Perhaps an organization like MOGSC should address to this issues and be a pipeline through a round table and drives the plans with the Government, Industry and Academic Institution. Each of those bodies should understand the framework and demands of this exciting unstable industry of Oil & Gas. Plan ahead for crises and be ready to adapt when you need to.
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Headline crude prices for the week beginning 12 November 2018 – Brent: US$71/b; WTI: US$60/b
Headlines of the week
It seems to have been a topic that has been discussed for years, but a decision could finally be made. The Philippines has short-listed three different groups who are in the running to build the country’s first LNG import terminal, whittling them down from an initial 18 that submitted project proposals. The final three consist of the Philippines National Oil Company (PNOC), a joint venture between Tokyo Gas and domestic firm First Gen Corp and China’s CNOOC. The Philippines hopes to choose the final group by the end of November – an optimistic decision that belies that many, many complications that have come before.
First of all, the make-up of only one of the groups has been finalised. A local partner is a requirement for this project; CNOOC has yet to officially tie-up, although it has been talking to Manila-based Phoenix Petroleum, while state oil firm PNOC does not have a (deep-pocketed) partner yet. Firms including Chevron, Dubai’s Lloyds Energy Group and Japan’s JERA have reportedly contacted PNOC to express their interest, but a month before the Philippines wants to make a decision, its own home-grown hero hasn’t yet got its ducks lined up in a row.
And time is of essence. The once giant Malampaya gas field is running out of resources. Supplying piped natural gas to three power plants that feeds some 45% of Luzon’s electricity requirements, the Shell-operated field is expected to be completely depleted by 2024. With the country aiming to move away from burning coal or (imported) gasoil for power, gas is needed to replace gas. Even though the Philippines is pushing for a bilateral agreement with China to pave to way for joint exploration activities in disputed areas of the South China Sea – to the consternation of its citizens – any discovery in the Palawan basin or Scarborough Shoal will be years from commercialisation.
So LNG is the answer. And LNG has been the answer since 2008, when the need for an LNG import terminal was first identified. And it is not like no projects have been proposed – Australia’s Energy World Corp (EWC) has been wanting to build an LNG receiving terminal and power station in the Quezon province near Manila for years, but the project has been described as ‘trapped in a bureaucratic quagmire’ due to hurdles from various government agencies, or stymied by groups with competing interests.
PNOC itself has been wanting to build its own terminal in Batangas, within range of existing gas and power transmission facilities currently drawing Malampaya gas. But, just like Pertamina in Indonesia, it is cash-strapped and unable to drive the project on its own, hence the requirement for a partner/s. First Gen Corp and Phoenix Petroleum are both private players, with First Gen already operating four of the country’s five gas-fired plants while Phoenix Petroleum has close ties with CNOOC Gas.
Many announcements have been made and gone, but with this shortlist of three groups, it does finally look like the Philippines will be able to get its LNG ambitions of the ground. And it is thinking even bigger; wanting the terminal to become a LNG trading hub for the region – capitalising on the existing habit of ship-to-ship transfers of LNG cargoes into smaller parcels in the Philippine waters for delivery into southern China – challenging existing ambitions in Japan, South Korea and Singapore. But perhaps that is getting a bit ahead of themselves. Getting a project – any LNG project – off the ground is the first priority. And the rest can come after that.
Other Proposed LNG Projects In The Philippines: