Petroleum and Case Study

UNIVERSITI PUTRA MALAYSIA A CASE poll ON PETRONAS CARIGALI SDN BHD (Facing the International Challenges) WAN ZAINUDDIN HJ WAN MUDA GSM 1997 7 ? IESIS A CASE STUDY ON PETRONAS CARIGALI SDN BHD (Facing the International Challenges) BY WAN ZJUNUDDIN HJ WAN MUDA MATRIC no 45161 MASTER OF BUSINESS ADMINISTIUlTION MALAYSIAN GRADUATE SCHOOL OF MANA. GEMENT UNIVERSITY PUTRA MALAYSIA. SERDllNG SELANGOR DmUL EHSAN DECEMBER, 1997 A. Case reading On Petronas Carigali Sdn Bhd (Facing The International Challenges) By demented Zainuddin Hj Wan Muda 45161 Matrie No.This Case choose is submitted in let outial fulfilment of the Iequirement fol the Mastel of Business Aclministlation, Malaysian Graduate inform of Management, Univelsity Putn Malaysia, Seldang, Selangol DalUl Ehsan. Confidentiality Statement The Case Study is purely an academic exercise undertaken by the author. The case herewith contains certain information that shall not be break to the public. Thus no part of this document is to be reproduced in any form and be used in any manner without previous written permission from the author.Ack right offledgement First, I would like to extend my deepest gratitude and appreciation to my Supervisor, prof Dr. Mohd. Ismail Ahmad for his guidance, comments and valuable suggestions during the course of preparing this case study. A big thank you and course credit shall too be given to all lecturers throughout the whole MBA platform for their interesting lecture which makes all of us more clear and cause on the dividing concern innovation and strategy which is important for todays competitive business environment.A word of thank shall as well go to my wife and children who provide me a valuable inspiration and have been the most patient, understanding, supportive and encouraging for victorious this course. Without them, the completion of this case study and the MBA course of instruction would not have been viable. convey you so much I love you all .. . Orig inality of the Document I, Wan Zainuddin Hj Wan Muda, Matric No. 45161, a final year disciple of the MBA programme at the University Putra Malaysia, Serdang, Selangor Darul Ehsan hereby confirmed that the case repared for the above programme is purely the sole effort of my goodself. Name Date allg? _1Ihd ?l_1XlI .. ,. ,, a.? __ ? P. T___ F_ Ii,. ,. ) ikon 1. 0 PETRONAS GROUP OF COMPANIES 8 I I I I I 1 I MANAGEMENT COMMITTEE GROUP PVBUC affairs BOARD OF DIRECTORS PRESIDENT ICEO DATO M. HASSAN MERJCAN . I I I I I -I 1- . .1 I BOARD visit COMMrmE lAMe I INTERNAL AUDIT REGIOAAL OFACCS I I I HEALTH, SAFETY & ENVIRONMENT COMPANY repository &. LEGAl SERVICES CORPORATE PlANNING & BUSINESS DEVElOPMENT I I I CORPORATE DEVELOPMENT 1 I I I I EXPlORATION &. PROOUCTKlN arena I . s PETROCHEMICAL area I ITEC? OGY . 1 1 RESOURCES & MANAGEMENT SECTOR REF? ING trade SECTOR II TRANSPORTATION & MARINE SERVICES SECTOR I ) HUMAN RESOURCES MANAGEMENT SECTOR I 1 FINANCE SECTOR J FIGURE 2. 0 PET RONAS ORGANISATION STRUCTURE 9 PETRONAS was now a full-fledged crude and triggerman company which engaged in a wide range of activities. covering petroleum exploration and intersectionion. petroleum refining. marketing. trading and distribution of crude oil and petroleum products. natural ordnance processing. ransmission and distribution. natural bungle liquefaction and marketing oil liquefied natural gas. and manufacturing and marketing of petrochemicals and fertilisers. Due to the governments depletion policy. oil production in the country was levelled off amid 600. 000 bopd to 650. 000 bopd. Today. within a strong foothold in the country. while create on to its domestic operations. PETRONAS was actively expanding into the global market forging towards its ken of becoming a multi-national petroleum corporation. As PETRONAS President says . The most decisive challenge would be to fulfill and keep our competitive edge in the international arena where we would be up agains t the most naturalised and survive players. In baseball club to realise the above. we need to re-examizJe ourselves fix to achieve the iUld cOlltlnuously change 011 everytlJJllg we do in most cost effectiveness. efficient utilisation of our resources . we must(prenominal) perpetually seek improvement in our organisation and respond positively to the unalterable changes in the dynamic business environment that we operatem . (3) 10 2. 1 . 1 VISION tilt MISSION STATEMENT PETRONAS, having consolidated its correct at home and with the expertise and knowledge acquired over the span of 20 years of its existence, was spreading its wing and venturing abroad to pursue its dreams. In order to realise organisational goals, PETRONAS has recently launched the long term Vision Statement as well as creating a burster Statement to benchmark and gauge organisation mastery. PETRONAS VISION STATEMENT To be a Leading oil colour and Gas Multinational of Choice PETRONAS MISSION STATEM ENT We are a business entity, Petroleum was our resources, Our primary objective was to develop and add nurse to this national resources, Our obj ective was to contribute to the well being of the people and the nation 2. 1 . 2 SIIARED VALUES In addition to having both Vision and Mission Statement, PETRONAS also launched organisational Shared Values to enhance organisational objective in achieving the goals. II Loyalty Professionalism Loyalty to the Nation & Corporation Committed, Innovative and Proactive and of all time Striving for Excellence Integrity CohesivenessHonest and Upright United in plan and Fellowship With the above Vision, Mission Statement as well as establishing Shared Values statement, it was envisaged that PETRONAS employee could foster a better teamwork, quality product and serve which could provide competitive edge, and hence would portray PETRONAS image, reputation and success of the organisation not only at home but also at the international arena. 2. 2 PE TRONAS CJlRIGALJ SDN BBD PETRONAS CARlGALI SON. BHD. (peSB) was one of the PETRONAS wholly owned subsidiaries combine on 11 at May 1978.With the increase business activities in the exploration and production of oU and gas and good potential for industry growth, peSB has been entrusted by PETRONAS to spearpointed the challenge in the oil and gas exploration, development and production not only locally but also at the international arena. To date, peSB was the actor of more than 12 fields, producing about one third of the countrys total oil and gas production. The fields operated by PCSB locally are Ouyong, Oulang, Bekok, Tapis and Pulai in Peninsular Malaysia, the Tembungo and Samarang in Sabah, nine oilfield in 12 Baram Delta area in Sarawak. Meanwhile, in the international area, peSB was operating Dai Hung in Vietnam, and few platforms in the Caspian ocean which undergoing development phases. Currently, PCSB has been involved in a number of projects internationally. Among the international projects undertaken by PCSB was in the Asia region such as Thailand, Philippine, Vietnam, Burma, Indonesia, India in the Middle vitamin E such as in Iran, Iraq, Syria in Eastern Europe such as Turkmenistan, Uzbekistan, Azerbaijan in Africa such as in Sudan and many more. finished the years, PCSB kept on venturing into vernal concession area and ggressively participate in the international arena to further strengthen its business. (4) 2. 2. 1 PCSB VISION STATEMENT Many multinational companies set a long term organisational objectives or goals known as vision statement. Likewise, as business activities were faCing a stiff challenge in todays global market environment, PCSB has also established company vision in realising its goals and objectives. With the vision, peSB was expected to enhance its capabilities. PCSB vision was To Be A MultinatiolJal E & P CompalJY ofClJoice, Creating V alue TlJroug COlJtinuous ImprovemelJt & GrowtlJ . h 13 2. . 2 PCSB BUSINESS OBJEC TIVES One could argue that it was virtually impossible for an organisation to government agency without having establish some business goals or objectives. An objective set a future target or end result that an organisation wishes to achieve. It also set a direction where the organisation was heading towards achieving its dream. As part of globalisation effort to purse its business activities, PCSB has set few organisational objectives to spearhead the challenge of the oil and gas industry that was very competitive in particular in the international arena. PCSB business objectives were oTo actively participate in the exploration of petrolewn resources for the maximwn benefit of the peopJe o To attain lull operational and technical expertise through manpower development and the transfer of technology in the shortest possible time o To achieve an adequate production level so as to meet the nation? total crude oil and gas output o To ensure maximum Malaysian involvement in the fabri cating and assembling of aD production facilities and provision of ancillary and supportive services in the oil and gas industry. The above business objectives were in line with PETRONAS President wishes who said that The most critical challenge would be to achieve and keep our competitive edge in the international arena where we would be 14 up against the most established and experienced players. In order to be competitive. we need to constantly re-examme ourselves iUJd CDlltbluously Improve Oil everytbblg we do in order to achieve cost effectiveness. efficient utilisation of our resources. we must continuously seek improvement in our organisation and respond positively to the constant changes in the dynamic business environment that we operate 11(5) m. . 3. 0 PCSB ORGANISATION STRUCTUREHaving diversifying its business activities outside the domestic environment. PCSB basically adopting functional concept of the organisation structure. Current PCSB organisation structure compose d of essentially basketball team (5) main instalments that were geographic expedition. Development. Commercial Services. Domestic Operation. and International Operation. Each of these divisions was headed by the public Manager who reported directly to the Managing Director/Chief Executive Officer. Exploration division focus on finding new oil and gas reserve that could provide substantial return to the company.Whenever Exploration teams find new oil and gas reserve. the field development was then be the business of the Development division to further study how to produce hydrocarbon from offshore. Development division composed of Petroleum surgical incision. Drilling Department. Design Department. Construction Department. and Services Department that specialise in certain work scope. Commercial Services function mainly focused on all contractual matters pertaining to the project development and exploration activities. Meanwhile. for both 15