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Last Updated: December 6, 2017
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Anas Alam Faizli has recently joined UEM Edgenta Propel as Head, Performance Improvement. When he’s not working, he spends his time with his adorable and beautiful daughter.


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1. In 2014, you wrote a book which became a bestseller in Malaysia for a period of time and it’s called Rich Malaysia, Poor Malaysians. In it, you talked about how PETRONAS plays a significant role in contributing to the country’s economy. With the current times of unstable oil price, what can you advise fresh graduates who are passionate about the industry but are unsure about their futures? Should they still pursue their passions?


Thank you for your question. For your information, there is a new edition to the book. Recently published and launched in 2017 by Tan Sri Arshad Ayub, who is one of our eldest statesmen in the country. Actually, the oil and gas industry is normally very volatile. The oil price will go up and go down. The only difference is that it has been low for a period of 3 years and it’s giving a massive impact to the industry, in which we have seen layoffs and people becoming unemployed, cutting measures, etc. But to me personally, we are looking at the new normal where the price of oil is at $50 per barrel. The oil and gas industry has survived before at $20-30 per barrel. What happens is when it hit $100 per barrel, the amount of wastages and inefficiency in the industry grew. With the new normal, we can see the emergence of new technologies and a new way of doing things. For fresh graduates, my advice is they should continue pursuing their education in oil and gas because it is still the dominant industry with the highest standards for engineering, safety and quality, as well as professionalism. Professionals in oil and gas are very much sought after. So, please keep pursuing your passions because the future in energy industry is still bright.

2. How important has your professional network been, in getting you where you are today? Also, other than the workplace, where should one start building their professional network?


As a word of advice, for someone who is just starting up their career, one should not be working in limited silos. For example, if that person is working in Downstream business in a particular process plant, perhaps as a mechanical engineer, he should not be focusing on just mechanical. In fact, he should ingrain in himself a love for the industry, because the only way to improve himself is to understand the bigger picture by interacting with professionals from other disciplines. He needs to learn about the industry as a whole and extend the understanding to Upstream business. Like myself, I’ve always been exposed to Upstream activities but I’ve had the opportunity to complete the whole cycle of Upstream – from engineering, to procurement, to construction, to commissioning; and I have also had the exposure of working offshore and internationally. I think that young professionals should interact with people outside of their scope of work. They should build their professional network when they meet with their counterparts from subcontractors and clients. They should also join professional societies such as Society of Petroleum Engineers (SPE) and Malaysian Oil & Gas Services Council (MOGSC) – where they will have plenty of opportunity to network and expand their knowledge. In terms of online networks, there are various groups you can join such as Linkedin Groups, where you can connect with other professionals in the field.

3. Seeing as you came from an academic background, where both of your parents were lecturers at the Universiti Teknologi Malaysia (UTM), how important is education in shaping one’s career path? And do you think that fresh graduates today are well-equipped to navigate their way in their jobs?


When you’re in university, education is not just limited to the subjects you are taking. There are 2 aspects in education – 1) To teach you how to Learn. For example, in a semester you might be learning 4 different topics and skillsets. So you can easily adapt this to working life where you’re able to pick up learning about different things at once. 2) It teaches you how to Socialise. There are many associations, extracurricular activities, student body programs, which you can join and be a part of. You have to embrace it holistically and learn to make the most out of your university experience. I’ve always believed that education is the number one problem solver to all our social woes.

4. Do you feel that youths today have more opportunities given global connectivity?


I believe the youths today have the additional advantage because you are able to obtain information at your fingertips. Back in the day, you have to spend more on experiences. Now you can easily read up on things online and the transfer of knowledge has grown tremendously faster than ever before. The expectation on the youths is more and the competition has become fierce. The opportunity to expand one’s self is unlimited.

5. What challenges do you see forthcoming in the oil & gas industry?

The challenges would be for the smaller companies which provide oil & gas services, whether they can survive and adapt to these trying times. Companies have to make serious decisions when they are going into an oil and gas business. This is not the type of industry where you can simply go in for the easy money. It has become more challenging due to the new ‘normal’.

6. On a personal note, what challenges have you overcome in your career? And how did you do it? You spent 2 years working offshore between Malaysia-Vietnam borders – was this the toughest time for you?


One of my biggest challenges was when I was just starting work, I was a non-engineer and my degree was in Computer Science. I joined the industry because they needed someone with a computer science background to do the project planning. From there, I picked up project understanding, and then became a Project Engineer, and soon started managing projects. As a non-engineer who had to understand the engineering environment, there were definitely more challenges for me during the first formative years in my career.  The times when I worked offshore were also tough, but more so from a physical aspect.

7. Name the most memorable experience that happened in your career. How did it affect you and did it change you for the better?


One of my most memorable experience was to get an offer from Petronas Carigali. I was working all the way in Teluk Ramunia with Sime Darby Engineering, and I was wondering if I was ever going to get out of that remote location! Another memorable experience was when I was offered to work in Vietnam under Talisman, which was quite a transformative experience because I had to deal with international people on a global scale. Dealing with the Vietnamese people was also quite a challenging experience in the beginning because of the differences in culture. Furthermore, they were very inexperienced as they had never done fabrication engineering, or had a full-fledged procurement process. So, we had to teach them these things. Eventually we got their buy-in and the processes became smooth. It was very fulfilling in the end.

8. What would you like to see differently in the way things are operating in the energy, oil and gas industry in Malaysia?


I would want to see more local Malaysian players taking on global competition. I would also like to see service providers going global. As you know, we (the local oil & gas industry) has been around as long as Singapore and Korea. So, I want to see local players becoming as successful as Hyundai engineering, or Samsung Engineering, etc. I want to see that happening in the near future.

9. In today’s world, everything is going digital. Even learning. Digital learning in Oil & Gas is now possible with e-courses, webinars, and VR modules (which are also available on NrgEdge). How big do you think is the market for this type of learning in Malaysia? Should oil and gas companies consider digital learning to upskill their employees?


I think that learning and education is something you could never spend enough on. I believe that the ROI for upskilling employees is always very good. We have seen many cases where companies spend on human capital and seen tremendous rewards in terms of revenue and efficiency. I’m all for this.

10. You must lead a busy life, besides working, you have your active volunteer work and writing on the side – how do you manage the elusive ‘work life balance’? Is such a thing possible in today’s day and age of technology, where work can follow you on mobile?


I think that when work follows you on mobile, you become more efficient. When I was studying for my doctorate, I was also working and managing a few NGOs on the side, as well as managing the book. It all boils down to time management. Passion and dedication is also a contributing factor. In this day and age, it is possible to have a more balanced life. More companies are open to working from home thanks to connectivity. You can easily reply a work email or text on your mobile, instead of having to go into office to reply on your desktop. I think that having work done via mobile is not a negative thing – in fact things are more efficient now.

11. You’ve written a book, met incredible leaders, and led various organisations on top of your existing day job. So, what else is in store for you?


Interesting question but I’ll just have to keep this as a surprise! Something is coming soon, that’s all I can say.



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U.S. oil and natural gas production to fall in 2021, then rise in 2022

U.S. monthly crude oil and natural gas production

Source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO)

In its January 2020 Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) forecasts that annual U.S. crude oil production will average 11.1 million b/d in 2021, down 0.2 million b/d from 2020 as result of a decline in drilling activity related to low oil prices. A production decline in 2021 would mark the second consecutive year of production declines. Responses to the COVID-19 pandemic led to supply and demand disruptions. EIA expects crude oil production to increase in 2022 by 0.4 million b/d because of increased drilling as prices remain at or near $50 per barrel (b).

The United States set annual natural gas production records in 2018 and 2019, largely because of increased drilling in shale and tight oil formations. The increase in production led to higher volumes of natural gas in storage and a decrease in natural gas prices. In 2020, marketed natural gas production fell by 2% from 2019 levels amid responses to COVID-19. EIA estimates that annual U.S. marketed natural gas production will decline another 2% to average 95.9 billion cubic feet per day (Bcf/d) in 2021. The fall in production will reverse in 2022, when EIA estimates that natural gas production will rise by 2% to 97.6 Bcf/d.

U.S. monthly crude oil production

Source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO)

EIA’s forecast for crude oil production is separated into three regions: the Lower 48 states excluding the Federal Gulf of Mexico (GOM) (81% of 2019 crude oil production), the GOM (15%), and Alaska (4%). EIA expects crude oil production in the U.S. Lower 48 states to decline through the first quarter of 2021 and then increase through the rest of the forecast period. As more new wells come online later in 2021, new well production will exceed the decline in legacy wells, driving the increase in overall crude oil production after the first quarter of 2021.

Associated natural gas production from oil-directed wells in the Permian Basin will fall because of lower West Texas Intermediate crude oil prices and reduced drilling activity in the first quarter of 2021. Natural gas production from dry regions such as Appalachia depends on the Henry Hub price. EIA forecasts the Henry Hub price will increase from $2.00 per million British thermal units (MMBtu) in 2020 to $3.01/MMBtu in 2021 and to $3.27/MMBtu in 2022, which will likely prompt an increase in Appalachia's natural gas production. However, natural gas production in Appalachia may be limited by pipeline constraints in 2021 if the Mountain Valley Pipeline (MVP) is delayed. The MVP is scheduled to enter service in late 2021, delivering natural gas from producing regions in northwestern West Virginia to southern Virginia. Natural gas takeaway capacity in the region is quickly filling up since the Atlantic Coast Pipeline was canceled in mid-2020.

January, 15 2021
So, Why Is Saudi Arabia Doing This?

Just when it seems that the drama of early December, when the nations of the OPEC+ club squabbled over how to implement and ease their collective supply quotas in 2021, would be repeated, a concession came from the most unlikely quarter of all. Saudi Arabia. OPEC’s swing producer and, especially in recent times, vocal judge, announced that it would voluntarily slash 1 million barrels per day of supply. The move took the oil markets by surprise, sending crude prices soaring but was also very unusual in that it was not even necessary at all.

After a day’s extension to the negotiations, the OPEC+ club had actually already agreed on the path forward for their supply deal through the remainder of Q1 2021. The nations of OPEC+ agreed to ease their overall supply quotas by 75,000 b/d in February and 120,000 b/d in March, bringing the total easing over three months to 695,000 b/d after the UAE spearheaded a revised increase of 500,000 b/d for January. The increases are actually very narrow ones; there were no adjustments for quotas for all OPEC+ members with the exception of Russia and Kazakshtan, who will be able to pump 195,000 additional barrels per day between them. That the increases for February and March were not higher or wider is a reflection of reality: despite Covid-19 vaccinations being rolled out globally, a new and more infectious variant of the coronavirus has started spreading across the world. In fact, there may even be at least of these mutations currently spreading, throwing into question the efficacy of vaccines and triggering new lockdowns. The original schedule of the April 2020 supply deal would have seen OPEC+ adding 2 million b/d of production from January 2021 onwards; the new tranches are far more measured and cognisant of the challenging market.

Then Saudi Arabia decides to shock the market by declaring that the Kingdom would slash an additional million barrels of crude supply above its current quota over February and March post-OPEC+ announcement. Which means that while countries such as Russia, the UAE and Nigeria are working to incrementally increase output, Saudi Arabia is actually subsidising those planned increases by making a massive additional voluntary cut. For a member that threw its weight around last year by unleashing taps to trigger a crude price war with Russia and has been emphasising the need for strict compliant by all members before allowing any collective increases to take place, this is uncharacteristic. Saudi Arabia may be OPEC’s swing producer, but it is certainly not that benevolent. Not least because it is expected to record a massive US$79 billion budget deficit for 2020 as low crude prices eat into the Kingdom’s finances.

So, why is Saudi Arabia doing this?

The last time the Saudis did this was in July 2020, when the severity of the Covid-19 pandemic was at devastating levels and crude prices needed some additional propping up. It succeeded. In January 2021, however, global crude prices are already at the US$50/b level and the market had already cheered the resolution of OPEC+’s positions for the next two months. There was no real urgent need to make voluntary cuts, especially since no other OPEC member would suit especially not the UAE with whom there has been a falling out.

The likeliest reason is leadership. Having failed to convince the rest of the OPEC+ gang to avoid any easing of quotas, Saudi Arabia could be wanting to prove its position by providing a measure of supply security at a time of major price sensitivity due to the Covid-19 resurgence. It will also provide some political ammunition for future negotiations when the group meets in March to decide plans for Q2 2021, turning this magnanimous move into an implicit threat. It could also be the case that Saudi Arabia is planning to pair its voluntary cut with field maintenance works, which would be a nice parallel to the usual refinery maintenance season in Asia where crude demand typically falls by 10-20% as units shut for routine inspections.

It could also be a projection of soft power. After isolating Qatar physically and economically since 2017 over accusations of terrorism support and proximity to Iran, four Middle Eastern states – Saudi Arabia, Bahrain, the UAE and Egypt – have agreed to restore and normalise ties with the peninsula. While acknowledging that a ‘trust deficit’ still remained, the accord avoids the awkward workarounds put in place to deal with the boycott and provides for road for cooperation ahead of a change on guard in the White House. Perhaps Qatar is even thinking of re-joining OPEC? As Saudi Arabia flexes its geopolitical muscle, it does need to pick its battles and re-assert its position. Showcasing political leadership as the world’s crude swing producer is as good a way of demonstrating that as any, even if it is planning to claim dues in the future.

It worked. It has successfully changed the market narrative from inter-OPEC+ squabbling to a more stabilised crude market. Saudi Arabia’s patience in prolonging this benevolent role is unknown, but for now, it has achieved what it wanted to achieve: return visibility to the Kingdom as the global oil leader, and having crude oil prices rise by nearly 10%.

Market Outlook:

  • Crude price trading range: Brent – US$55-57/b, WTI – US$51-53/b
  • Global crude oil benchmarks jumped several levels to a new higher range, as Saudi Arabia supplemented OPEC+’s decision to allow a minor increase in supply quotas for February and March with a massive 1 mmb/d voluntary cut over the same period
  • There are signs that the elevated level of crude pricing is tempting American drillers back to work, with Baker Hughes reporting a massive 67-site gain in active rigs over the first week of 2021; this will present another headache for OPEC+ when it comes time to debate the supply deal path forward for April and beyond
January, 14 2021
SHORT-TERM ENERGY OUTLOOK

Forecast Highlights

  • This edition of the Short-Term Energy Outlook (STEO) is the first to include forecasts for 2022.
  • The January STEO remains subject to heightened levels of uncertainty because responses to COVID-19 continue to evolve. Reduced economic activity and changes to consumer behavior in response to the COVID-19 pandemic caused energy demand and supply to decline in 2020. The ongoing pandemic and the success of vaccination programs will continue to affect energy use in the future.
  • Economic assumptions are among the most important drivers of the U.S. Energy Information Administration’s (EIA) forecasts. EIA’s U.S. macroeconomic assumptions are based on forecasts by IHS Markit and EIA’s global economic assumptions are based on forecasts from Oxford Economics. After falling by 3.5% in 2020, IHS Markit forecasts that U.S. real gross domestic product (GDP) will increase by 4.2% in 2021 and 3.8% in 2022. Rising GDP contributes to EIA’s forecast of rising total energy use in the United States during 2021 and 2022. After falling by 7.8% in 2020, EIA forecasts that total U.S. energy consumption will rise by 2.6% in 2021 and by 2.5% in 2022, reaching 97.3 quadrillion British thermal units (quads), 3.0 quads less than in 2019.
  • EIA forecasts Brent crude oil spot prices to average $53 per barrel (b) in both 2021 and 2022 compared with an average of $42/b in 2020.
  • EIA estimates that global consumption of petroleum and liquid fuels averaged 92.2 million barrels per day (b/d) for all of 2020, down by 9.0 million b/d from 2019. EIA expects global liquid fuels consumption will grow by 5.6 million b/d in 2021 and 3.3 million b/d in 2022.
  • EIA forecasts crude oil production from the Organization of the Petroleum Exporting Countries (OPEC) will average 27.2 million b/d in 2021, up from an estimated 25.6 million b/d in 2020. Forecast growth in output reflects OPEC’s announced increases to production targets and continuing rise in Libya’s production. On January 5, 2021, OPEC and partner countries (OPEC+) announced that they will maintain the previously agreed-upon January 2021 production increase of 0.5 million b/d. The latest OPEC+ agreement also calls for production increases from Russia and Kazakhstan in February and March. However, additional voluntary cuts by Saudi Arabia for February and March result in lower overall OPEC+ production in early 2021. EIA forecasts that OPEC crude oil production will rise by 1.1 million b/d in 2022.
  • EIA estimates global liquid fuels inventories rose at a rate of 6.5 million b/d in the first half of 2020 before declining at a rate of 2.4 million b/d in the second half of 2020. EIA forecasts global inventories will continue to fall in the forecast, declining at a rate of 0.6 million b/d in 2021 and 0.5 million b/d in 2022.
  • U.S. regular gasoline retail prices averaged $2.18 per gallon (gal) in 2020, compared with an average of $2.60/gal in 2019. EIA forecasts motor gasoline prices to average $2.40/gal in 2021 and $2.42/gal in 2022 U.S. diesel fuel prices averaged $2.55/gal in 2020, compared with $3.06/gal in 2019, and EIA forecasts them to average $2.71/gal in 2021 and $2.74/gal in 2022.
  • EIA estimates that U.S. crude oil production fell from the 2019 record level of 12.2 million b/d to 11.3 million b/d in 2020. EIA expects that annual average production will fall to 11.1 million b/d in 2021 before rising to 11.5 million b/d in 2022.
  • U.S. liquid fuels consumption in 2020 averaged 18.1 million b/d, down 2.5 million b/d (12%) from 2019 consumption. EIA forecasts U.S. liquid fuels consumption will rise to 19.5 million b/d in 2021 and then to 20.5 million b/d in 2022 (almost equal to the 2019 level).
  • Henry Hub natural gas spot prices averaged $2.03 per million British thermal units (MMBtu) in 2020. EIA expects Henry Hub prices will rise to an annual average of $3.01/MMBtu in 2021, limiting natural gas use for power generation amid reduced natural gas production. EIA forecasts Henry Hub prices will rise to an average of $3.27/MMBtu in 2022.
  • U.S. working natural gas in storage ended October at more than 3.9 trillion cubic feet (Tcf), 5% more than the five-year (2015–19) average and the fourth-highest end-of-October level on record. EIA forecasts that declines in U.S. natural gas production this winter compared with last winter will more than offset the declines in natural gas consumption, which will contribute to inventory withdrawals outpacing the five-year average during the remainder of the winter, which ends in March. Forecast natural gas inventories end March 2021 at 1.6 Tcf, 12% lower than the 2016–20 average.
  • EIA estimates that U.S. natural gas consumption averaged 83.1 billion cubic feet per day (Bcf/d) in 2020, down 2.5% from 2019. EIA expects that natural gas consumption will decline by 2.8% in 2021 and by 2.1% in 2022. Most of the decline in natural gas consumption is the result of less natural gas use in the power sector, which EIA forecasts to decline because of rising natural gas prices. These declines are partly offset by rising natural gas use in other sectors.
  • EIA estimates that 2020 dry natural gas production averaged 90.8 Bcf/d, down 2.5% from 2019. EIA expects U.S. dry natural gas production to average 88.2 Bcf/d in 2021, down by 2.8% from 2020, and then rise to 89.7 Bcf/d in 2022.
  • EIA forecasts that total consumption of electricity in the United States will increase by 1.5% in 2021 after falling by 4.0% in 2020. The pandemic significantly affected electricity consumption in the commercial and industrial sectors in 2020. EIA estimates retail sales of electricity to the two sectors fell by 6.0% and 7.9%, respectively. EIA expects commercial electricity use in 2021 to rise by 0.9% and industrial electricity use to rise by 1.2%. Social distancing guidelines have caused people to spend more time at home, resulting in increased residential electricity use. In 2020, retail sales of electricity to the residential sector were 1.3% higher despite a mild winter earlier in the year. EIA expects residential electricity use will rise by 2.4% in 2021 as colder winter weather leads to more heating demand. Total forecast electricity consumption in 2022 will rise by 1.7%.
  • EIA expects the share of U.S. electric power sector generation from natural gas will decline from 39% in 2020 to 36% in 2021 and 34% in 2022 in response to significantly higher natural gas fuel costs and increased generation from renewable energy sources. Coal’s forecast share of electricity generation will rise from 20% in 2020 to 22% in 2021 and 24% in 2022, which is close to its share in 2019. Electricity generation from renewable energy sources will rise from 20% in 2020 to 21% in 2021 and 23% in 2022. The nuclear share of U.S. generation will decline from 21% in 2020 to 20% in 2021 and 19% in 2022.
  • During the next two years, EIA expects electricity generation capacity from renewable energy sources to continue growing. Although EIA expects both wind and solar capacity growth, solar capacity grows at a faster rate in the forecast. Based on EIA survey data, large-scale solar capacity growth in gigawatts (GW) will exceed wind growth for the first time in 2021.
  • EIA estimates that total U.S. coal production decreased by 24% to 537 million short tons (MMst) in 2020. This decline largely reflected lower demand for coal from the electric power sector and the coal export market. Lower natural gas prices made coal less competitive for power generation. In 2021, EIA expects coal production to increase by 12% to 603 MMst because of a forecast 41% increase in natural gas prices for electricity generators, making coal more competitive in the electric power sector. EIA forecasts coal production will rise to 628 MMst in 2022.
  • After declining by 11.1% in 2020, EIA forecasts that total energy-related carbon dioxide (CO2) emissions will increase by 4.7% in 2021 and by 3.2% in 2022. Even with growth over the next two years, forecast CO2 emissions in 2022 remain 3.9% lower than 2019 levels. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, energy prices, and fuel mix.


World liquid fuels production and consumption balance

U.S. natural gas prices


U.S. residential electricity price

January, 14 2021