No Match Found
Given that PwC is the world’s second largest professional services firm measured by 2014 revenues, what is the scope of your Malaysian based services and specifically for the energy sector?
PwC offers the same services in Malaysia as we do in other locations in the PwC global network - assurance, consulting, deals and tax services.
We service the oil and gas sector with a full suite of services. For both E&P companies and service providers, we work either as auditors or in an advisory role.
We provide various advisory services including strategy development, operational improvements (managing construction delays and cost overruns), governance (supervision and control) issues, leadership and talent development, and M&A advice.
How will changing dynamics at PETRONAS, especially the arrival of Datuk Wan Zulkiflee Bin Wan Ariffin as CEO in April, impact the local oil and gas eco-system?
It is too early to say. I will not speculate on what changes the new CEO will make at PETRONAS. Generally new CEOs come in looking to make a change. Datuk Wan Zulkiflee has had extensive experience in PETRONAS, having held several key positions in PETRONAS downstream over the years.
If you look at other recently appointed CEOs who are downstream specialists, like Ben van Beurden at Shell Global, it is observed that the tone of the business is usually shaped by a focus on cost and operational improvements.
What will be the impact of the PETRONAS FLNG facilities expected to enter operations later this year?
I do not think the PFLNG project will have a huge impact on the industry, at least not in the short term. The amounts of LNG created through facilities such as PFLNG, Prelude in Western Australia, and other FLNG projects, will be much smaller than any land-based production, and the PFLNG1 is much better suited for marginal and stranded fields for which normal production would be un-economical.
Overall, the technology and production will not have a huge impact compared to natural gas demand globally. The bigger challenge will be when Australia brings online its unconventional resources via the multiple coal seam gas to LNG projects in Queensland in the next one and a half years.
Looking into Malaysia’s burgeoning downstream sector, what do you see as the impact of the PIPC development and RAPID project on Malaysia’s oil and gas future?
Malaysia has had quite a focus on LNG for decades, and, in this sense, the expansion on the current refinery and LNG capacity does not represent a fundamentally different way of doing things.
Last year, discussions within the industry indicate that Malaysia accounted for five to ten of the top fifty gas finds globally from the exploration side. In this sort of environment, it makes sense to put these resources to use through expansion of LNG facilities or petrochemicals.
Interview with Matthew McKee, Executive Director, PwC's South East Asian Consulting services
(Oil & Gas practice)
Malaysia aims to be the oil and gas hub for the region. How would you compare Malaysia’s positioning in this sense to its ASEAN neighbors?
Kuala Lumpur was recently recognised as a World Energy City by the World Energy Cities Partnership (WECP). If you compare Malaysia to Singapore, Singapore is more widely known as a trading hub.
Malaysia has been producing oil and gas for over a hundred years and is thus in an advantaged position in terms of the technical side of the business from engineering to upstream design. Indonesia is growing rapidly but it is a different market altogether. It is hard to compare Indonesia, Malaysia, and Singapore, as all have different strengths and weaknesses.
Malaysian service providers have been integrating and internationalizing at an accelerated pace in the past years. How do you see this trend developing in the next five years?
In a challenged oil price environment, if history has any insights to offer, oilfield services take the brunt of the oil price reductions through cancelled or changed contracts, reduced margins and lower rig rates. Some companies will thrive in this environment and some will struggle.
As for Malaysian companies looking to expand internationally, they will be challenged by the fact that their international competition is well established and will often have deeper pockets to weather the storm in an international market. It will be difficult to entrench true expansion unless these Malaysian companies can compete on the cost side of the equation, which will be a challenge.
If Malaysian companies can continue with their level of service at a competitive price, however, they do have a chance to expand globally.
Furthermore, there are definitely some world firsts in Malaysia. It may not be home grown innovations, but new technologies are coming out and being used first in Malaysia. Malaysian oil and gas companies on the service side are innovating but mainly for Malaysian waters.
However, if you look at Malaysian oil and gas further and further offshore, there are geographic anomalies that may not be replicable outside Malaysia.
How far do you think Malaysia is from achieving its projected goal of being an oil and gas hub by 2020 as per the Economic Transformation Program?
Malaysia still has room to grow but is definitely coming along. Most major oil and gas companies and large service providers, as well as mid-tier and third-tier companies, are located in Kuala Lumpur. Nowhere else in the region boasts such a confluence of companies.
Generally, only Malaysia, the North Sea, the Gulf of Mexico and the Middle East can account for this concentration of companies. Furthermore, the industry is growing and professionalizing at a rapid rate.
What are PwC’s ambitions for growth and development of Malaysian operations within ASEAN and Asia Pacific over the next five years?
We are generally looking to expand our presence with many of the companies here, as well as expand our reach regionally.
This is in line with the growth of our consulting capabilities in South East Asia. Besides serving oil and gas companies, we have expanded our client base to include SPACs, RSCs, and sustainability related companies and services.
This interview is published with permission from Focus Reports.
Senior Manager, Marketing & Communications, PwC Malaysia
Tel: +60 (3) 2173 0226