Petroleum and Case Study

UNIVERSITI PUTRA MALAYSIA A CASE STUDY ON PETRONAS CARIGALI SDN BHD (Facing the world-wide Challenges) macabre 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 matriculation NO. 45161 MASTER OF BUSINESS ADMINISTIUlTION MALAYSIAN GRADUATE SCHOOL OF MANA. GEMENT UNIVERSITY PUTRA MALAYSIA. SERDllNG SELANGOR DmUL EHSAN DECEMBER, 1997 A. Case Study On Petronas Carigali Sdn Bhd (Facing The International Challenges) By Wan Zainuddin Hj Wan Muda 45161 Matrie No.This Case Study is submitted in partial fulfilment of the Iequirement fol the Mastel of Business Aclministlation, Malaysian Graduate School of Management, Univelsity Putn Malaysia, Seldang, Selangol DalUl Ehsan. Confidentiality Statement The Case Study is purely an academic exercise undertaken by the author. The grounds herewith contains certain information that shall non be disclosed to the public. Thus no part of this roll i s to be reproduced in any form and be used in any manner without preceding written permission from the author.Acknowl bump intoment First, I would like to extend my deepest gratitude and appreciation to my Supervisor, Professor Dr. Mohd. Ismail Ahmad for his guidance, comments and valuable suggestions during the course of preparing this upshot study. A big thank you and credit shall besides be given to all lecturers throughout the full MBA programme for their interesting lecture which makes all of us more clear and understanding on the demarcation concept and strategy which is important for todays competitive credit line environment.A word of thank shall also go to my married woman and children who provide me a valuable inspiration and have been the some patient, understanding, supportive and encouraging for taking this course. Without them, the close of this case study and the MBA programme would not have been possible. Thank you so much I bop you all .. . Originality of the Document I, Wan Zainuddin Hj Wan Muda, Matric No. 45161, a final year scholarly person of the MBA programme at the University Putra Malaysia, Serdang, Selangor Darul Ehsan hereby confirmed that the case repared for the higher up programme is purely the sole campaign of my goodself. Name Date allg? _1Ihd ?l_1XlI .. ,. ,, a.? __ ? P. T___ F_ Ii,. ,. ) FIGURE 1. 0 PETRONAS GROUP OF COMPANIES 8 I I I I I 1 I MANAGEMENT COMMITTEE GROUP PVBUC AFFAIRS BOARD OF DIRECTORS chairwoman ICEO DATO M. HASSAN MERJCAN . I I I I I -I 1- . .1 I BOARD AUDIT COMMrmE lAMe I INTERNAL AUDIT REGIOAAL OFACCS I I I HEALTH, SAFETY & ENVIRONMENT COMPANY SECRETARY &. licit SERVICES CORPORATE PlANNING & BUSINESS DEVElOPMENT I I I CORPORATE victimization 1 I I I I EXPlORATION &. PROOUCTKlN firmament I . s PETROCHEMICAL SECTOR I ITEC? OGY . 1 1 RESOURCES & MANAGEMENT SECTOR REF? ING MARKETING SECTOR II pane & MARINE SERVICES SECTOR I ) HUMAN RESOURCES MANAGEMENT SECTOR I 1 finance SECTOR J FIGURE 2 . 0 PETRONAS ORGANISATION STRUCTURE 9 PETRONAS was now a full-fledged oil and splosh company which engaged in a wide range of activities. covering oil geographic expedition and production. oil refining. marketing. trading and distribution of rude oil and crude oil products. inwrought gas processing. ransmission and distribution. natural gas 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 between 600. 000 bopd to 650. 000 bopd. Today. within a strong foothold in the country. while make on to its domestic operations. PETRONAS was actively expanding into the global market forging towards its trance of becoming a multi-national petroleum corporation. As PETRONAS President says . The most critical challenge would be to obtain and keep our competitive edge in the international arena where we would be up against the most established and experience players. In evidence to realise the above. we need to re-examizJe ourselves order to achieve the iUld cOlltlnuously improve 011 everytlJJllg we do in most cost effectiveness. good utilisation of our resources . we must continuously seek rise in our scheme and respond positively to the unalterable changes in the dynamic business environment that we campaignm . (3) 10 2. 1 . 1 VISION financial statement deputation STATEMENT PETRONAS, having consolidated its position 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 nerveal goals, PETRONAS has recently launched the broad term Vision Statement as well as creating a delegation Statement to benchmark and evaluate organisation success. PETRONAS VISION STATEMENT To be a Leading Oil and Gas international of Choice PETRONAS MISSION STATEMENT We are a business entity , oil color was our resources, Our primary objective was to fail and add value 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 get up organisational objective in achieving the goals. II Loyalty Professionalism Loyalty to the Nation & Corporation Committed, Innovative and Proactive and unceasingly Striving for Excellence Integrity CohesivenessHonest and Upright United in Purpose 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, forest product and services 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 PETRONAS CJlRIGALJ SDN BBD PETRONAS CARlGALI SON. BHD. (peSB) was one of the PETRONAS all in all owned subsidiaries incorporated on 11 at May 1978.With the increase business activities in the geographic expedition and production of oU and gas and good potential for industry development, peSB has been entrusted by PETRONAS to spearheaded 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 operator 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 arena in Sarawak. Meanwhile, in the international area, peSB was operating Dai Hung in Vietnam, and few platforms in the Caspian sea which undergoing development phases. Currently, PCSB has been affect in a number of projects internationally. Among the i nternational projects undertaken by PCSB was in the Asia region such as Thailand, Philippine, Vietnam, Burma, Indonesia, India in the Middle East such as in Iran, Iraq, Syria in Eastern Europe such as Turkmenistan, Uzbekistan, Azerbaijan in Africa such as in Sudan and many more. Through the years, PCSB kept on venturing into new giving up 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 OBJECTIVES One coul d argue that it was virtually impractical for an organisation to function without having establish some business goals or objectives. An objective set a approaching 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 particularly 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 adept 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 fabricating and appeal 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 composed of essentially five (5 ) main divisions that were geographic expedition. Development. moneymaking(prenominal) Services. Domestic Operation. and International Operation. Each of these divisions was headed by the General Manager who reported directly to the Managing Director/Chief Executive Officer. Exploration division focus on finding new oil and gas reserve that could provide meaning(a) return to the company.Whenever Exploration teams find new oil and gas reserve. the field development was then be the responsibility of the Development division to further study how to produce hydrocarbon from offshore. Development division composed of Petroleum Department. Drilling Department. Design Department. Construction Department. and Services Department that specialise in certain work scope. Commercial Services Division mainly focused on all contractual matters pertaining to the project development and exploration activities. Meanwhile. for both 15