CRITICAL ISSUES IN DRILLING & COMPLETIONS
What’s important now is for Petronas,
together with our service partners, to set
the baselines and establish what we are
monitoring and controlling. This is a col-
laborative effort. Our combined focus will
be on driving long-term value creation
through responsible investment while
collectively reducing our environmental
impact and carbon emissions.
As we are still transitioning to new tech-
nologies, we will be working together with
our rig contractors on innovative features
to help us progressively adopt decarboniza-
tion and emissions reduction compliance.
How will operators approach cost
reductions in the next couple of years?
Petronas sees recruiting and maintaining a skilled workforce as one of the industry’s
biggest challenges , particularly as activity picks up. The operator is prioritizing
investment in training, like its All-Rounded Drilling program for new graduates.
with our efforts to be a low-carbon busi-
ness at Petronas Upstream.
As we aspire to achieve net-zero carbon
emissions by 2050, we are committed to
pursue profitable and scalable growth for
long-term value creation in cleaner energy
development. We will see investments in
new technologies to help with continu-
ous operational improvement. We are also
looking at innovative contracting strate-
gies to help provide a sufficient and stable
cash flow that will allow us to invest in
growth. Can you elaborate on those contract-
ing strategies?
We have stepped away from the tradi-
tional model of paying our business part-
ners based on unit price and managing the
operation ourselves. The current model
sees us bundling services together. We are
trying out concepts where we share the
risks with our business partners. We com-
pensate them on a consolidated basis. By
doing that, we are encouraging our busi-
ness partners to make their services more
efficient and cost-effective.
20 What are some challenges and ben-
efits you’ve seen to this approach?
By consolidating the contracts, the ser-
vice provider has a bigger volume, and it
eases our ability to manage our operations.
A bundled, integrated contract, or con-
solidated deal, also provides better value
for our business partners and us. Both par-
ties would also share mitigation respon-
sibilities. On the other hand, when we integrate
everything, the monetary value of each
contract is huge. Therefore, if there is any
performance issue with a business part-
ner, the impact will also be significant. We
continue to improve the industry’s health
and lucrativeness for as many players as
possible. This will allow everyone – be it
operators, partners and service providers –
to benefit from a robust ecosystem.
Going back to sustainability, what
would you like to see drilling contrac-
tors do in the next two years to help
Petronas reach its carbon reduction
goals? We really need to focus on improv-
ing our efficiency as a way to reduce
our costs. The focus areas will be on
digitalization, automation and remote
operations. That’s how we can improve
efficiency and reduce costs, and effec-
tively get better project economics. For
example, our Remote Operations Platform
– piloted at Resak, offshore Terengganu
– is expected to gain us a potential 30%
OPEX reduction.
Most of the potential cost reductions
and efficiency improvements for E&P
projects will probably be captured in the
design phase. Having said that, we can
also achieve improvements during the
drilling phase with the implementation of
digitalization and automation.
One thing that we learned from the
COVID-19 pandemic was that we don’t
need to be in an office setting to be effec-
tive. That’s become a good thing for our
business as we know we can operate our
business remotely and travel less, reduc-
ing our carbon footprint in the process.
How have supply chain and inflation
issues affected your drilling projects?
How can companies effectively deal
with these bottleneck and cost issues?
I think this is something that we can’t
really control. We know that the pace of
supply of equipment and materials is not
as fast as we want, so we have to prioritize
our projects.
Consolidation will help to stabilize
the price even when supplies are low.
JAN UARY/FEB RUARY 2023 • D R I LLI N G CO N T R ACTO R