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Last Updated: November 15, 2017
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A practicing Professional Engineer and DOSH qualified 1st Grade Steam Engineer, Ir Mahmood Azmy holds the position of CEO at MECIP Global Engineers Sdn Bhd, and is an active member of IEM, MOGEC and MOGSC, and serves as a board member of SEAMOG Group Sdn Bhd.


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Ir Mahmood Azmy Muhd Shukri, MECIP CEO


  1. What has been your greatest achievement so far in MECIP?
    I have been with MECIP for a while now. The greatest achievement for MECIP is that we are able to establish ourselves strongly as equivalent to other international players in oil and gas business. Being local and positioned in Kerteh, Terengganu, it is quite difficult to be visible. But we manage to step out of our boundaries in becoming more prominent in the oil and gas community. It is an achievement for us in terms of the company’s branding, which helps us in marketing, gaining trust and becoming business partners of PETRONAS, Shell, other reputable oil and gas companies, as well as working closely with MATRADE to market our services overseas. This is in line with our company name – MECIP Global, where we want to position ourselves globally as an oil and gas engineering services provider.

  2. I understand that you previously worked in PETRONAS. And now as CEO of MECIP, do you think that the business connections you made back then has helped you in your business?
    I worked with PETRONAS for more than 12 years in oil refinery and petrochemical plant, and another 10 years in a US-based company, HUNTSMAN which gave me very good technical background in oil, gas, and petrochemical business. Being in PETRONAS for many years, coupled with international exposure with HUNTSMAN, I made quite a number of connections which enriched my technical and management experience. I started my career as a project engineer in Kerteh Refinery Reformer Project, then subsequently lead maintenance team in Kerteh Refinery and the Inspection team in Kerteh Ethylene Polyethylene plant. I made my career move outside of PETRONAS to lead Engineering team in HUNTSMAN to gain further knowledge, experience and exposure working with an international company. In managing projects, maintenance, inspection and engineering work, many technical matters were covered, and I had the opportunity to work with specialists and experts in various subject matters. It was expected of me to ensure all activities managed must be well planned, conducted in high safety standards, with great attention to detail, with target of zero defect and according to schedule. I was able understand the technical part of the business and management of engineering work much better through these experiences and business connections locally and overseas. All these experiences, knowledge, contact and business relationships, are very important for me and MECIP to deliver quality engineering service to our clients.

  3.  Are there challenges you faced over the years that you have overcome? How did you do so?
    Working in oil and gas means you may face multiple challenges over the years. One of the challenges we faced is related to people. We must hire good, competent, talented and well-committed people. Because they will become our assets. Getting the right people is a real challenge. For example, when you’re building a house, the foundation must be strong. Even if the house looks beautiful on the outside, if it doesn’t have a good foundation, it will crumble when a storm comes. That’s why it’s important to get the right people, with the right attitude and mindset. We’re looking for people who want to grow with the company. I would like to groom or nurture them to be like me! I want to develop them into becoming future leaders of our business. But sometimes it’s difficult to retain good talent, as they might resign as soon as there’s a better position somewhere else, and then we have to start the hiring process all over again. That’s why we introduced a loyalty programme for our staff. Those who stay for more than 5 years in our company, we reward them with vacation trips, and the longer they stay, the better the rewards. On top of this, we also have annual dinners to encourage a community-feel in our company. We do these little things because we want our people to be happy, enjoy working and stay loyal with MECIP.

  4. Has there been a new development in MECIP, perhaps a new way of doing things or a new technology, that has recently helped a project?
    Technology has been developing so rapidly worldwide, and we have to adjust ourselves. In terms of engineering software, it has changed the way we do things. In design work, we have evolved from using manual tools to computer software and programmes. It is an expensive investment, but we must do it in order to adapt and grow our business. We are always looking for ways to improve our work processes and efficiency. With technology, it will really help us to improve our work performance to serve our client better and this is in line with our passion to serve - “Do it right the first time, every time.”

  5.  As I understand it, it is MECIP’s vision to provide local solutions with global expertise. Do you believe that the local talents are at par with overseas counterparts? 
    Overseas talents are more exposed to the global market and they might have more expertise and experience compared to Malaysian talents. Our local talents, normally having minimal overseas experience, will have limited opportunities to work overseas as they might not be familiar with the countries’ code and standards. I do believe that we have to expose ourselves more to overseas market, learn new standards and explore better ways of doing things. In terms of the local market opportunities, especially for various big local projects here in Malaysia, I do believe the local workforce are capable and competent enough to take bigger roles and responsibilities. In fact, I think we can even speed up to build our local strength if there is a policy that requires foreign players to work under local companies for mega projects in Malaysia. I strongly urge government policy to address this matter accordingly to ensure better development and growth of Malaysian local companies. “Malaysia Boleh” slogan should continue to roar.

  6. What can students or fresh graduates do to prepare themselves for a career in the oil and gas industry? 
    In general, this message is not just for students but also to young fresh graduates who are embarking their careers in oil and gas - you must prepare yourselves mentally in terms of technical know-how and communication. You must apply good analytical thinking and ask questions to enhance understanding. If you don’t ask, how will you learn? You may think it’s alright to just let things go and leave it up to your bosses to correct your work. This is not the right thinking process. You need to put in extra efforts to learn, even after office hours or during your free time on weekends. The learning curve for young graduates must be exponential and they must strive to be good in their respective technical knowledge, especially if they are engineers. If you come across something that you want to delve deeper at work, keep that as ‘homework’. Keep an inventory of things you want to learn in your pocket. I call this the ‘pocket list’. So, you will always occupy yourself with learning. Be proactive in whatever tasks and initiatives given to you. For engineers, I would encourage you to get additional certifications because a degree on its own may not be enough. Work hard towards becoming a Professional Engineer as the career objective. Join professional societies and become a member of Institute of Engineer Malaysia (IEM), Institute of Materials, Malaysia (IMM), etc. These will help you gain good connections and learn about new technologies in the industry.

  7. Having worked with various business partners all over the world, was there something from overseas that impressed you, that you have successfully adapted at MECIP?
    Working with a Japanese company like Chiyoda Corporation, was a very good experience. Being in Japan, you get to observe how Japanese people manage their time. They are very focused and the quality of work produced is extremely good. They are also very detail-oriented, even their handwriting is very neat. I enjoyed very much working with the Japanese and try to adopt similar mindset at MECIP – being result-oriented, attention to detail, work hard, and take things seriously. Sometimes you might have to stay back and work, but that’s what you have to do in order to achieve results. We will not allow substandard work to be produced. We also established a good quality culture in our office - we developed an engineering design process called interdisciplinary checks (IDC) where there are multiple checks to ensure our engineers produce quality work. And this is part of the ISO 9000 quality management system, which is basically derived from the Japanese culture. Our company is an ISO 9001-certified company, and we believe in delivering a good quality job, in a safe and timely manner. We also believe in continuous improvement or “Kaizen” – engineers must develop themselves in order to become senior engineers and so on. You can’t stay in one position forever. Punctuality is also one of the things I try to emphasize. The Japanese are very punctual with their timing. Most importantly, I value honesty at work. Japanese people are very transparent with their work – if they made a mistake, they will own up to it. For locals, saying sorry might be more difficult. But it’s important to keep that integrity.

  8. What is the company culture of MECIP?
    As I mentioned, we like to encourage continuous improvement in our company. We also encourage our engineers to practice their communications skills. For example, we have “English Day” in the office where staff will practice their presentation skills in English. Some might have broken English, but the important thing is they try and keep on improving themselves. We give awards to the “Best Speakers” in our annual dinners. We also like to reward those who give internal training and share their knowledge with others. Usually the juniors will nominate their seniors who they think are the best “coach” or “teacher”. We actually have a few excellent engineers who like to share their technical knowledge. In general, we want to improve through excellence in knowledge and we encourage everyone to learn from each other. We want our engineers to be passionate about their own expertise and share this passion with others.

  9. What is next in the pipeline for MECIP?
    We are planning to secure some overseas projects. We have been to Brunei, Jakarta, Aberdeen, Houston. We’ll be going to Abu Dhabi in Middle East in mid-November. We have our partners in Abu Dhabi and the next step is to secure overseas jobs that can be done locally in Malaysia. In recent years, we have established a good partnership with a Norwegian company, Sharecat, and have formed a Malaysian joint-venture (JV) company with them to provides oil and gas services to the European market. In our plan, Norway will be like a big “storage tank”, and they will pipe down the work to us in Malaysia to execute. Due to the economic downturn, the market is a little slow. But we hope business will pick up soon once the market recovers. We are looking for more channels like these so we can hire more local engineers and nurture them to become future leaders. Our goal is to encourage more participation and involvement of our local engineers to serve the global market through MECIP. MECIP also seriously plans to expand and venture into new horizons through SEAMOG, a new company that was formed to do EPCC packages and major plant Turnaround. We believe in consolidation and having equal shares with other three strong companies in SEAMOG will make us grow bigger and faster. We want to transform MECIP for a better future.

  10. Finally, name things that are important to you – in life or in your career.
    Always have in mind, to do the right thing. Be thankful and grateful. Be honest, trust and grow people. Don’t get easily frustrated when things don’t go your way. When you do something, there should be no turning back. You must have a goal and know which direction you are heading. Have good and sincere intentions because it will most definitely be rewarded in the end.


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High Oil Prices and Indonesia’s Ban on Oil Palm Exports

Supply chains are currently in crisis. They have been for a long time now, ever since the start of the Covid-19 pandemic reshaped the way the world works. Stressed shipping networks and operational blockages – coupled with China’s insistence on a Covid-zero policy – means that cargo tanker rates are at an all-time high and that there just aren’t enough of them. McDonalds and KFCs in Asia are running out of French fries to sell, not because there aren’t enough potatoes in Idaho, but because there aren’t enough ships to deliver them to Japan or to Singapore from Los Angeles. The war in Ukraine has placed a particular emphasis on food supply chains by disrupting global wheat and sunflower oil supply chains and kicking off distressingly high levels of food price inflation across North Africa, the Middle East and Asia. It was against this backdrop that Indonesia announced a complete ban on palm oil exports. That nuclear option shocked the markets, set off a potential new supply chain crisis and has particular implications on future of crude oil pricing and biofuels in Asia.  

A brief recap. Like most of Asia, Indonesia has been grappling with food price inflation as consequence of Covid-19. Like most of Asia, Indonesia has been attempting to control this through a combination of shielding its most vulnerable citizens through continued subsidies while attempting to optimise supply chains. Like most of Asia, Indonesia hasn’t been to control the market at all, because uncoordinated attempts across a wide spectrum of countries to achieve a similar level of individual protectionism is self-defeating.

Cooking oil is a major product of sensitive importance in Indonesia, and one that it is self-sufficient in as a result of its status as the world’s largest palm oil producer. So large is Indonesia in that regard that its excess palm oil production has been directed to increasingly higher biodiesel mandates, with a B40 mandate – diesel containing 40% of palm material – originally schedule for full implementation this year. But as palm oil prices started rising to all-time highs at the beginning of January, cooking oil started becoming scarcer in Indonesia. The government blamed hoarding and – wary of the Ramadan period and domestic unrest – implemented a Domestic Market Obligation on palm oil refineries, directing them to devote 20% of projected exports for domestic use. Increasingly stricter terms for the DMO continued over February and March, only for an abrupt U-turn in mid-March that removed the DMO completely. But as the war in Ukraine drove prices even further, Indonesia shocked the market by announcing an total ban on palm oil exports in late April. Chaotically, the ban was first clarified to be palm olein only (straight refining cooking oil), but then flip-flopped into a total ban of crude palm oil as well. Markets went haywire, prices jumped to historical highs and Indonesia’s trading partners reacted with alarm.

Joko Widodo has said that the ban will be indefinite until domestic cooking oil prices ‘moderate’. With the global situation as it is, ‘moderate’ is unlikely to be achieved until the end of 2022 at least, if ‘moderate’ is taken to be the previous level of palm oil prices – roughly half of current pricing. Logistically, Indonesia cannot hold out on the ban for more than two months. Only a third of Indonesia’s monthly palm oil production is consumed domestically; the rest is exported. An indefinite ban means that not only fill storage tanks up beyond capacity and estates forced to let fruit rot, but Indonesia will be missing out on crucial revenue from its crude palm oil export tax. Which is used to fund its biodiesel subsidies.

And that’s where the implications on oil come in. Indonesia’s ham-fisted attempt at protectionism has dire implications on biofuels policies in Asia. Palm oil prices within Indonesia might sink as long as surplus volumes can’t make it beyond the borders, but international palm oil prices will remain high as consuming countries pivot to producers like Malaysia, Thailand, Papua New Guinea, West Africa and Latin America. That in turn, threatens the biodiesel mandates in Thailand and Malaysia. The Thai government has already expressed concern over palm-led food price inflation and associated pressure on its (subsidised) biodiesel programme, launching efforts to mitigate the worst effects. Malaysia – which has a more direct approach to subsidised fuels – is also feeling the pinch. Thailand’s move to B10 and Malaysia’s move to B20 is now in jeopardy; in fact, Thailand has regressed its national mandate from B7 to B5. And the reason is that the differential between the bio- and the diesel portion of the biodiesel is now so disparate that subsidy regimes break down. It would be far cheaper – for the government, the tax-payers and consumers – to use straight diesel instead of biodiesel, as evidenced by Thailand’s reversal in mandates.

That, in turn, has implications on crude pricing. While OPEC+ is stubbornly sticking to its gentle approach to managing global crude supply, the stunning rebound in Asian demand has already kept the consumption side tight to match that supply. Crude prices above US$100/b are a recipe for demand destruction, and Asian economies have been preparing for this by looking at alternatives; biofuels for example. In the past four years, Indonesia has converted some of its oil refineries into biodiesel plants; in China, stricter crude import quotas are paving the way for China to clamp down on its status of a fuels exporter in favour of self-sustainability. But what happens when crude prices are high, but the prices of alternatives are higher? That is the case for palm oil now, where the gasoil-palm spread is now triple the previous average.

Part of this situation is due to market dynamics. Part of it is due to geopolitical effects. But part of it is also due to Indonesia’s knee-jerk reaction. Supply disruption at the level of a blanket ban is always seismic and kicks off a chain of unintended consequences; see the OPEC oil shocks of the 70s. Indonesia’s palm oil export ban is almost at that level. ‘Indefinite’ is a vague term and offers no consolation to markets looking for direction. Damage will be done, even if the ban lasts a month. But the longer it lasts – Indonesian general elections are due in February 2024 – the more serious the consequences could be. And the more the oil and refining industry in Asia will have to think about their preconceived notions of the future of oil in the region.

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Market Outlook:

  • Crude price trading range: Brent – US$110-1113/b, WTI – US$105-110/b
  • As the war in Ukraine becomes increasingly entrenched, the pressure on global crude prices as Russian energy exports remain curtailed; OPEC+ is offering little hope to consumers of displaced Russian crude, with no indication that it is ready to drastically increase supply beyond its current gentle approach
  • In the US, the so-called NOPEC bill is moving ahead, paving the way for the US to sue the OPEC+ group under antitrust rules for market manipulation, setting up a tense next few months as international geopolitics and trade relations are re-evaluated

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