Malaysia has seen an in­flux of Nor­we­gian in­vest­ments. Sal­con Petroleum is ready to help.

Norway-Asia Business Review - - Contents - ANRIKE VISSER

Nor­way is the ninth largest in­vestor coun­try in Malaysia, with ap­prox­i­mately MYR 19 bil­lion in in­vest­ments, the em­bassy states.

One of the ar­eas of in­ter­est in the coun­try for for­eign in­vestors, is the oil and gas in­dus­try. OGA 17, the 16th Asian oil, gas and petro­chem­i­cal en­gi­neer­ing ex­hi­bi­tion, pro­vides an over­view of the sec­tor on its web­site. “South­east Asia has around 412 ac­tive off­shore fields with on­go­ing field de­vel­op­ment ac­tiv­i­ties and Malaysia has the max­i­mum off­shore projects and ac­counts for a large por­tion of the re­gional Cap­i­tal Ex­pen­di­ture (CAPEX).”

But there are also chal­lenges ac­cord­ing to OGA 17. “Faced with ma­tur­ing oil fields, de­clin­ing do­mes­tic pro­duc­tion and a fi­nite fuel source in the face of ac­cel­er­ated eco­nomic growth, the main chal­lenge for en­ergy sup­pli­ers is not just the avail­abil­ity of al­ter­na­tive en­ergy sup­ply but also the com­mer­cial po­ten­tial of these re­sources.”

OGA 17 con­tin­ues by look­ing at the past, “In the past decade, Malaysia’s Oil, Gas and En­ergy (OGE) in­dus­try has been con­tribut­ing about one-fifth to the na­tional GDP (Gross Do­mes­tic Prod­uct). As part of the Eco­nomic Trans­for­ma­tion Pro­gramme (ETP) that will pro­pel Malaysia for­ward into a truly de­vel­oped na­tion, the OGE sec­tor is tar­get­ing 5% an­nual growth un­til 2020.”

Ac­cord­ing to the ex­hi­bi­tion’s web­site there is a way to over­come the chal­lenges. “To sus­tain and in­crease oil & gas pro­duc­tion, the fo­cus is on deep wa­ter ex­plo­ration and EOR [en­hanced oil re­cov­ery] of ma­ture fields with Malaysia gen­er­at­ing big po­ten­tial as a re­gional EOR hub. Hence, it is cru­cial that Malaysia con­tin­ues to high­light its oil and gas po­ten­tial while stay­ing up-to-date with the lat­est in­no­va­tions and tech­nol­ogy to strengthen its po­si­tion.”

One of the com­pa­nies pro­vid­ing ser­vices to help tran­si­tion oil and gas com­pa­nies move into this new re­al­ity is Sal­con Petroleum Ser­vices (SPS). SPS was es­tab­lished in 2015 as a ser­vice provider and agent for rep­re­sent­ing over­seas oil and gas ser­vice com­pa­nies in Malaysia and the Asia Pa­cific. “SPS cov­ers the en­tire Asia Pa­cific re­gion and pro­vides sup­port and ser­vices wher­ever needed,”. The so­lu­tions show­cased range from lead­er­ship pro­grams, all the way to soft­ware, con­sul­tancy and oil spill de­tec­tion.

We talked with CEO Mr Thomas Alexan­der Sjøberg about found­ing SPS back in 2015. “Af­ter many years in Malaysia, work­ing with sev­eral lo­cal agents, we saw the need for a bit more proac­tive agent that is strong both tech­ni­cally and in sales. We there­fore de­cided to start SPS and to of­fer our ex­pe­ri­ence in sell­ing prod­ucts in Asia Pa­cific. Our three-year goal was to sign up five com­pa­nies to rep­re­sent. We got more than 15 com­pa­nies within the first year, so we got off to an ex­cep­tional start!”

“Our pri­mary of­fer­ing is to be a sales agent and to pro­vide lo­cal sup­port for our prin­ci­pals’ ser­vices. In Malaysia you are re­quired to use a lo­cal com­pany for con­duct­ing busi­ness in oil and gas, as there are PETRONAS re­quire­ments

in re­gards to lo­cal con­tent. SPS is reg­is­tered with PETRONAS and li­cenced to sell prod­ucts and carry out ser­vices in the oil and gas sec­tor in Malaysia. Hence, we help over­seas com­pa­nies to en­ter the oil and gas sec­tor here in Malaysia as well as in the Asia Pa­cific,” Mr Sjøberg states.

Nor­we­gian com­pa­nies are an im­por­tant part of the clients of SPS. “Out of all our prin­ci­pals that we rep­re­sent, about 50 per­cent of the com­pa­nies are from Nor­way. The other 50 per­cent are from all over the world in­clud­ing UK, US, Canada, Aus­tralia and Aus­tria. We are very pleased to have signed up 12 com­pa­nies from Nor­way so far. The list is con­stantly grow­ing, but cur­rently we have the fol­low­ing com­pa­nies signed up with us: AGR, VISSIM, MIROS, AnkoBluepix, eDrilling, Re­sop­tima, OTG, To­tal Safety, RAYVN, Promi­neo, Con­tiki and Safran,” Mr Sjøberg says.

SPS is not only fo­cused on the oil and gas sec­tor Mr Sjøberg men­tions. “Most of these com­pa­nies are spe­cific to the oil and gas in­dus­try only. How­ever, some of the prod­ucts has their main clients in oil and gas, but is also ap­pli­ca­ble out­side the oil and gas sec­tor. This is of course pos­i­tive when the oil mar­ket is down, so that we have a di­ver­si­fied marked to of­fer to. In ad­di­tion to the com­pa­nies above, we also rep­re­sent a few Nor­we­gian com­pa­nies that are not oil and gas re­lated. These are O.B. Wiik which pro­duces large tents for stor­age, and AquaFence, a flood bar­rier pro­tec­tion sys­tem. Our network in gen­eral in Asia ex­pands far out­side the Oil & Gas and we are there­fore happy to also rep­re­sent com­pa­nies that has prod­ucts that are pos­si­ble to mar­ket in Asia.”

Why are Nor­we­gian com­pa­nies in­vest­ing so mas­sively in Malaysia? Mr Sjøberg pro­vides his vi­sion on this ques­tion. “For the oil and gas sec­tor, I be­lieve the main rea­son for in­vest­ing in Malaysia is due to PETRONAS who al­ways have had a good re­la­tion­ship with Nor­way and Nor­we­gian com­pa­nies. PETRONAS is a very ac­tive na­tional oil com­pany, with lots of ex­plo­ration, pro­duc­tion and re­search on­go­ing. They are al­ways wel­com­ing re­search and de­vel­op­ment op­por­tu­ni­ties and new tech­nolo­gies. In ad­di­tion to PETRONAS a lot of in­ter­na­tional oil com­pa­nies are present in Malaysia, like Hess, Mur­phy, To­tal, Exxon and Shell. This cre­ates a lot of op­por­tu­ni­ties in oil and gas ser­vices in Malaysia, so it is nat­u­ral to in­vest here if you are in oil and gas. We also see more and more com­pa­nies es­tab­lish­ing a re­gional head­quar­ter in Malaysia, due to lower cost than sur­round­ing coun­tries, as well as be­ing cen­trally lo­cated in South­east Asia with easy con­nec­tions to all coun­tries in the Asia Pa­cific.”

For the next five to ten years, Mr Sjøberg sees op­por­tu­ni­ties for the oil and gas in­dus­try in the Asia Pa­cific in plug and aban­don­ment, en­hanced oil re­cov­ery and de­com­mis­sion­ing on a large scale. “There is also a dig­i­tal trans­for­ma­tion on­go­ing and sys­tems for Big Data, In­ter­net of Things and Ro­botic Process Au­toma­tion seems to be some­thing the ex­plo­ration and pro­duc­tion play­ers are look­ing into.”

Mr Sjøberg next ex­plains the chal­lenges he sees in the in­dus­try. “Asia Pa­cific seems to be one year be­hind the west­ern world in the re­cov­ery from the USD 40 oil price we had over the past few years. Hence, Asia Pa­cific seems to be still in re­cov­ery mode and lack­ing the big in­vest­ments. I think this will cre­ate some is­sues in the com­ing years, as the ex­plo­ration and pro­duc­tion com­pa­nies have re­duced their spend­ing on ex­plo­ration and very few dis­cov­er­ies have been made. With­out dis­cov­er­ies you don’t have new de­vel­op­ments and the big­ger projects will there­fore only ma­te­ri­alise sev­eral years from now. Right now, I be­lieve any­thing that con­trib­utes to cost-cut­ting is of in­ter­est to the ex­plo­ration and pro­duc­tion com­pa­nies here in Asia. And again, the dig­i­tal trans­for­ma­tion process is tak­ing place and hence good prod­ucts in this space is cer­tainly in­ter­est­ing.”

For in­ter­na­tional com­pa­nies there are some new op­por­tu­ni­ties in Malaysia specif­i­cally Mr Sjøberg states. “I be­lieve that innovation has al­ways been very im­por­tant and this is where Nor­way in par­tic­u­lar have been very strong! How­ever, what we see now is that the gov­ern­ment and PETRONAS here in Malaysia is en­cour­ag­ing more and more lo­cal play­ers to fo­cus on R&D and innovation. A lot of new grants, tax ben­e­fits and free of­fice space are be­ing given if you try to de­velop new prod­ucts and ser­vices in Malaysia. This could in fact also be in­ter­na­tional com­pa­nies that set up a base her in Malaysia and grow their busi­ness from here. This is very ex­cit­ing and a lot of plat­forms for innovation lo­cally is be­ing de­vel­oped.”

In the up­com­ing years SPS is look­ing to grow­ing their ser­vice of­fer­ings, rather than ex­pand­ing on prod­uct of­fer­ings. In ad­di­tion, SPS is con­sid­er­ing in­vest­ments to be­come a more di­ver­si­fied player in the off­shore ser­vice sec­tor by merger or ac­qui­si­tion of ex­ist­ing ser­vice com­pa­nies. “We are al­ways on the look­out for new tech­nol­ogy and ser­vices that has po­ten­tial,” says Mr Sjøberg.


Malaysia has seen an in­flux of Nor­we­gian in­vest­ments of the last cou­ple of years, ac­cord­ing to the Royal Nor­we­gian Em­bassy in Kuala Lumpur.


Above left: Part of the Sal­con Petroleum Ser­vices man­age­ment team with CEO Thomas A. Sjøberg, Head of Tech­ni­cal Ser­vices, Sven Tier­ney and Re­gional Sales Man­ager, Ter­ence Yong. Above: Thomas and Sven are joined by P Caine Tan, Head of Sales.

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