Will Hassan leave SembMarine for Petronas?
S’pore firm had landed major EPC projects since he came aboard
SINGAPORE: With Tun Dr Mahathir Mohamad once again prime minister of Malaysia, there’s been much buzz about who will be the next chairman of Petronas, the highest ranking national oil company in Southeast Asia on the 2017 Fortune Global 500 list.
Malaysian media has speculated that Dr Mahathir has beckoned his close aide, Sembcorp Marine Ltd chairman Tan Sri Hassan Marican, to return to Petronas. This is hardly surprising – Hassan has had a successful career as the longest-reigning Petronas chief executive. Should talk become reality, the question for Singapore Inc is: what would become of Hassan’s two concurrent roles as chairman of SembMarine and Pavilion Energy?
Industry watchers say that should he relinquish his current responsibilities at Sembcorp Marine and Pavilion, that would spell a leadership transition for SembMarine, which is still working on riding out a prolonged industry downturn. Hassan has helmed SembMarine’s board as non-executive chairman since April 2014.
From the get-go, the seasoned oil and gas man boasting decades of experience in the energy sector has had to live up to high expectations.
Hassan is said be far more “handson” than his predecessors, with UOB Kay Hian’s equity analysts noting that he “is known to have been able to open doors to various countries” as someone “well-regarded” in the international oil and gas industry.
How far he has contributed to bolstering SembMarine’s standing in the international stage though, has never been clear. What is certain however, is that since he came on board, SembMarine has scaled the value chain to land and deliver major engineering, procurement and construction (EPC) projects.
At the corporate level, Hassan is said to have strongly advocated for SembMarine’s still ongoing “transformation”. About one year into his term as chairman, SembMarine undertook a major corporate rebranding and reorganisation.
To be clear, Hassan may not be the originator of this “transformation”. An industry veteran pointed out that in fact, the corporate rebranding was mooted years before Hassan’s appointment as SembMarine’s chairman. And it has called on strength in character not just from Hassan but also the senior management team led by SembMarine CEO Wong Weng Sun to deliver the job at hand.
Going by accounts from informed parties, the transformation journey has not been smoothsailing.
For a start, to bring a group of yard subsidiaries with recognised franchise under one single brand is far from a walk in the park. The three key subsidiaries, Jurong Shipyard, Sembawang Shipyard and SMOE, have accumulated goodwill with distinctive clients across the O&M value chain.
Yet, all subsidiaries would eventually co-exist under one roof at the mega Tuas Boulevard Yard being developed in stages. So the rebranding is an inevitable consequence, some argue.
The tough challenge at hand lies with reeducating clients and safeguarding the goodwill previously acquired while undertaking transformation in the midst of a multiyear downturn.
Not helping the efforts on the rebranding front is an overhang from the anticorruption probe linked to the rigbuilding contracts Sete Brasil awarded to SembMarine and Keppel O&M. UOB Kay Hian pointed out that the allegations in Brazil “seem at odds” with “the high level of corporate governance” Hassan is believed to have brought with him to SembMarine.
But the brokerage also qualified that the fact that the yard group has yet to be “fined... probably says something”.
Now that Petronas is believed to be eyeing Hassan’s return, one question is this who should be entrusted to lead the board and help guide SembMarine through the rest of its transformation and a scandal-ridden sectoral downturn
Commenting broadly on managing an EPCfocused O&M business, IHS Markit’s APAC head of research Ang Dingli said “prior industry experience will no doubt be a bonus”.
But more importantly, the management must have “strong appreciation” of the industry dynamics and “the determination to drive and implement the correct strategy”. — SBT