He said: “rise early, work hard, strike oil.” Just as bankers know beyond any doubt that they will be around as long as the sun rises in the east and sets in the west, oilmen like Petronas president and group chief executive Datuk Wan Zulkiflee Wan Ariffin whom this newspaper spoke to last week, knew that for as long as the world’s insatiable demand for energy continues, the company has a future.
The challenge is in managing it properly. From his 81st floor office at the Petronas Twin Towers, Wan Zul has a bird’s-eye view of just about all components making up the company’s customers, from the snaking lines of vehicles powered by internal combustion engines criss-crossing the Kuala Lumpur streets below to the electrical power keeping every building around him habitable.
The Petronas floating Liquefied Natural Gas regasification terminal, at Sungai Udang, Malacca. Like any other organisation, Petronas is also in a constant race with technology. |
More so for Petronas, one of the few state-owned oil companies which included Saudi Aramco, Russia’s Gazprom, China National Petroleum Corp, National Iranian Oil Co, Petroleos de Venezuela and Brazil’s Petrobras, as its role far extends that of just making profits for its shareholders.
Apart from being an important contributor to the government’s coffers, Petronas is also the de facto guardian of the Malaysian oil and gas industry.
But that part of the quote from Getty which says, “rise early, work hard”, cannot be further from the truth, even for a company like Petronas.
Even as they look at the world below them, Wan Zul and his men and women at Petronas know they cannot rest on their laurels. A huge portion of his daylight is spent in the office as he ponders over challenges which probably include increasingly further offshore and in deeper waters oil and gas fields, and increasingly high pressured wells, all of which translates into more money needed to haul the products to the refineries and eventually to the consumers.
Then, the market iself is not always friendly. The days of crude oil being priced at more than US$100 (RM421) a barrel is gone and the depressed price environment, around half than what it was in the glory days, is expected to prevail at least for the medium term.
Which means, Wan Zul has to alternate between being the technical person that he is and being the scrooge accountant. And so, as Petronas continues to pump out oil and gas and pours out investments for even more revenue, it is also cutting unnecessary spending to make sure that there is always a healthy margin between what it spends and what it earns.
So far, it has been able to do so. And like any other organisation, Petronas is also in a constant race with technology. Finding oil and gas resources today is nothing close to that superstitious way of using a forked stick simply pointed to the ground, the method of 18th century French folklore.
It is a billion dollar endeavour that may easily turn into a costly misadventure these days. Now oil companies have geologists who do nothing but study rocks and the earth in their relentless search for new wells and wealth.
The derricks and pumpjacks of old have been gradually replaced by offshore platforms as more new resources were discovered under the seabed, and these, too, are slowly being taken over by highly sophisticated semi-submersible rigs to pump the commodity out of even more difficult and deeper waters.
The investments needed in monetary terms, as well as the risk factors, have increased significantly. Then there is always that question of how long more will oil be what it is now to mankind, as vital as water itself. While it remains far in the distant horizon before any new and viable alternative fuel are discovered and before the world really moves to turn concerns over climate change and greenhouse gas from talk shop agenda into real actions, the possibility does exist.
For now, however, fossil fuel looks set to be the preferred choice for a long time to come. So yes, it is nice to be housed on the 81st floor, in an office with a view, like the proverbial king of the hill, running the only Fortune 500 company in Malaysia.
But, Wan Zul spoke of tradeoffs and he probably has to make plenty of that. It is never easy to run a billion-dollar company, with 51,000 people working for it and some 30 million more depending on its continued well-being. It must be more a call of duty than just a fat pay cheque.