KEY NOTE ADDRESS. Yang Mulia Awang Haji Zolkiflee bin Hj Abd Karim, Director of Petroleum Unit at The Prime Minister s Office

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1 KEY NOTE ADDRESS REVITALISATION THROUGH INTEGRATION, INNOVATION AND STANDARDISATION YANG MULIA DAYANG HAJAH ROSMAWATTY BINTI HAJI ABDUL MUMIN ASSET DIRECTOR BRUNEI SHELL PETROLEUM COMPANY SENDIRIAN BERHAD At the Society of Petroleum Engineers (SPE) Brunei Section 9 March 2010 The Empire Hotel and Country Club. Opening Bismillahir Rahmanir Rahim, Yang Berhormat Pehin Orang Kaya Seri Dewa Major General (Rtd) Dato Seri Pahlawan Awang Haji Mohammad bin Haji Daud, Minister of Energy at the Prime Minister s Office. Yang Mulia Awang Haji Zolkiflee bin Hj Abd Karim, Director of Petroleum Unit at The Prime Minister s Office Yang Mulia Awang Yap Sin Fah, Chairman of the Brunei SPE Section Yang Mulia Awang Haji Jaafar bin Hj Bakar, Regional Director SPE Asia Pacific Yang Mulia Awang Aidiradiman bin Hj Johan, Chairman of this SPE ATW Senior government officials Leaders of the oil & gas industries Distinguished keynote speakers Members of the organizing committees Workshop participants, ladies and gentlemen. 1

2 Assalamu alaikum, welcome and Good Morning, I am very honoured to speak to you today, and privileged to make a keynote address for the Society of Petroleum Engineers, because all of you here today, are the future of global energy. In my address today, I d like to share with you some insights on our recent efforts in reviving mature assets in Brunei Shell Petroleum. The lessons learnt from our experiences in finding opportunities for cost effective and efficient solutions. I hope to touch on 3 central themes of Revitalisation: 1. Integration 2. Innovation 3. Standardization Revitalisation through Integration BRUNEI SHELL PETROLEUM s main activity is the exploration and production of crude oil and natural gas. It is one of the biggest energy companies in Asia. It supplies around 350,000 barrels of oil and gas equivalent every day to countries such as Japan, Korea, Indonesia and Australia to name a few. 2

3 Moreover, the gas is also supplied to Brunei Darussalam for electricity generation and domestic fuel to Brunei LNG for liquefaction and export to Korea and Japan. Very soon, Brunei Shell Petroleum will play another significant role in supplying the most important feedstock to the local methanol industry. Brunei Shell Petroleum is the supplier of natural gas to Brunei Methanol Company. This critical responsibility strongly demonstrates Brunei Shell Petroleum s support to the economic diversification of Brunei Darussalam. This also illustrates Brunei Shell Petroleum, an 80-year old company, is still very much relevant and indeed a backbone of Brunei Darussalam s economy. Similar to the global energy outlook, the world s energy demand is surging because the world s economic growth and energy demands continue to grow. And that s the hard truth. It is growing, it is increasing and inevitably it is intensifying pressure for energy companies to produce more. Unfortunately, the scenario today is very different from the past decades, where oil reservoirs today are found to be at challenging and complex subsurfaces. We have entered a new era, the non-easy oil era. But in every crisis, is an opportunity! We can turn this to our advantage, by pushing ourselves to be more integrated, more innovative and more strategic in our delivery. 3

4 For example, the Seria North Flank at the oldest field in Brunei, the Seria field. We have pushed the frontiers and introduced leading edge technologies such as the integrated fish hook drilling and Smart Field technology. In the past, it was not feasible and economical to explore and produce oil from the shallow waters of the Seria North Flank. However, today, you can see the T-201, winner of the prestigious 2009 Rig of The Year award, drilling offshore oil from onshore safely! With the successful integration of the Smart Field technology, we now have young local professionals, who control the wells directly from the comfort of the BSP Head Office! Citing another example, 10 to 20 years ago, Enhanced Oil Recovery technology was considered categorically impossible in Seria. Yet today, it is now, a feasible project. Clearly, the integration of new technologies helps change the rules of the game, and level the playing field. Keep in mind also that we would not have considered the integration of these new technologies and reaped its successes, were it not for the surge in global energy demands. If there s a will, there s a way. When there s a need, we will find a way. 4

5 Revitalisation Through Innovation This brings me to my second observation, the need for the right people, with the right competencies and the right innovative attitude. Certainly, the technology we need exists. But with great leaps in developing technology, so much greater the leaps must be in developing our people s ability to innovate. Once again, consider the technology in the Seria North Flank, SNF. I showed you the picture of some of our young engineers who manage the SNF wells. To operate that technology, they have to acquire a certain set of skills, they must be able to analyse the real-time data and make decisions that are quick, effective and, more often than not, innovative. Their job is what you may call a real-life hot seat! The point here is along with new technologies, comes new requirements of knowledge, skills and human innovation without compromising our safety. Several years back, the oil wells in Seria were becoming increasingly difficult and costly to extract. But by developing the innovative Gecko Wells technology, we saved more than six times on well costs than with conventional drill wells. So, Always Challenge the Conventional. Innovation is key. Innovation comes from a professional sensitivity to other disciplines related with the oil industry, such as contractual issues, volatile oil prices, high operations cost, human resources and the impact to the society. 5

6 So, there is a real need to develop our people into flexible, real-world, inter-disciplined engineers, who can create these innovative solutions for Revitalisation. Revitalisation through Standardization This is the buzzword in Brunei Shell Petroleum today. As our Assets mature, so do its infrastructures and facilities. Many are nearing the end of its useful life. So we face before us a cost efficiency dilemma: to invest in newer infrastructure OR extend infrastructure life. Every decision, every action has an impact on the dollars and cents. And this leads into my final thought, Revitalisation through Standardization. Standardization saves many projects from wasting any time, energy and money in planning, and implementation. And when it comes to the costly Revitalisation of mature assets, keeping an eye on those dollars and cents are absolutely critical. It s interesting that as we ventured into newer technologies, we unlocked even more exciting possibilities for cost efficient solutions, mainly Standardization. As part of its business improvement programmes five years ago, Brunei Shell Petroleum has standardized its offshore platforms designs following the success of the Champion West platform. They say, if it ain t broke, don t fix it. So, when your doing something that works, just keep doing it 6

7 again. And we did. With further enhancements, we replicated the Champion West designs to our more recent Mampak and Bugan platforms. And with remarkable success. This approach not only shortened our whole development project time, but also cut down costs significantly. Soon, the Selangkir Iron Duke platform will follow the same successful model of Standardization. Summary To sum everything up, I invite you to keep three things in mind: Integration, Innovation and Standardization. I strongly believe, only by practicing cost-efficiency, via these strategies, can we march on into the future of global energy. It is these that will make us more sustainable in the long run. To conclude, I leave you with one final message: See Opportunities when others see Difficulties. Whether it is was the wheel or the computer, the progress of the human race has always relied on one eternal principle; that Necessity is Mother of Invention. To our international delegates, please take your time to explore the other wonders of Brunei Darussalam. The green Shahbandar Hills is just in the neck of the woods or you can take a relaxing walk along the beautiful beach just outside this hotel. I wish you a pleasant stay in Brunei Darussalam. Thank you. 7