Malaysia Petroleum Resources Corporation (939448-V)

A Perspective on Digitalisation in the Oil and Gas Industry

Datuk Shahrol Halmi, President/Chief Executive Officer

2017 HUAWEI Asia-Pacific Innovation Day9 November 2017Grand Hyatt, Kuala Lumpur

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Regulator

Operators (32)

GeophysicalServicesFieldDevelopment

ServicesReservoirMngmt

Services

EngineeringConsultancyGeomatic Services

PlatformFabricatorsOffshoreConstructions

FPSOSubsea

DrillingRigs/ServicesWellServices/Completions

Supply Chain (3,528)

MaintenanceFabrication&RepairUnderwaterServices

AssetIntegrityServicesHSE&Security

MarineVesselServices

The Malaysian O&G industry is matured and has a well-established services supply chain

SubseasystemsDrillingequipment

ElectricalHVAC

ICTInstrumentation

MechanicalRotatingequipment

Safety

Dec

om

Developmentsoverthelast40years:

§ 105PSCsand4RSCs

§ 603kboedliquidproduction

§ 6,120mmscfdnaturalgasproduction

§ 23.2bilboediscoveredresources

§ 8,467kmpipeline§ 332platforms

Source: Petronas, Global Data

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However, the global O&G industry today is facing a new normal of ‘lower for longer’ oil prices

• CompetitionfromshaleoilproductionintheUS• Alternativefuelsourcessuchasrenewablesgainingmore

traction• Policy-makingpivotsbysomeGovernmentstoencouragethe

useofcleanerenergysources• Thedriveforenergyefficientvehiclesamongautomakers

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In adjusting to the era of lower oil prices, the industry has to rethink their operating models

www.infield.comwww.statistica.com

0

20

40

60

80

100

120

0

1,000

2,000

3,000

4,000

5,000

CAPEX of Operators

Capex US$M Avg Oil Price

US Bn US

201720162015201420132012

+28% -12% -12% -20% -8%

3.06

3.93

3.46

3.072.48 2.28

Impactfromlowoilprices

§ OperatorsCAPEXarereduced,productionfromexistingbrownfieldassetscontinue,downstreaminvestmentscontinue

§ Service providersmustadjusttothisreprioritisationofprojects

§ Cost competitivenessisthenameofthegameacrossthevaluechain

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BigDataAnalytics

Artificial Intelligence

Internet-of-Things

§ PredictiveMaintenance− BDAenableshighaccuracypredictionthroughphysicsbasedmodeling+

machinelearning− Eliminateproductionlostduetounplannedshutdownofrotatingequipment

(pumps,motors,turbines)

ExampleofapplicationinOil&GasTechnology

§ UnmannedOperations/MinimumIntervention− AIenablesself-awareplatformse.g.roboticsmanipulationsbasedon

weatherconditions− ReducecostandHSErisksforsendingpersonneltoremoteplatforms

§ InspectionandSurveying− Dronesforflare-tipinspectionsreplacesmanualinspection− Reduceshutdowntimeandsafetyriskse.g.scaffolding

Digital technology can be game-changing to help O&G companies improve competitiveness and cost efficiency

§ Wells,reservoirsandfacilitymanagement− Providesearlyandactionablewarningsofimpendingequipmentandprocess

problems− Fasterandreal-timedecisionmaking

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Data Infrastructure People

Challenges impeding digital technology adoption..

§ Complexity- Datapoolistoovast,storedinafragmentedsystems,(varioussystems- variousformats,variousdatabase)

§ IntegrityandSecurity– reliabilityofdata

§ Remoteconnectivity–platformsupto150kmsfromshore

§ Buy-in– willingnesstoinvestindigitaltechnology

§ Talent– datascientists,digitaldomainexperts

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Exploration Development Production

Decom

50 600 950 100

§ Seismicsurvey§ Fielddevelopment§ Reservoirmngmt

§ Operationsandmaintenanceservices

§ Engineeringandprojectmanagement

§ Equipmentmaintenance

§ Underwaterservices

§ AssetIntegrityservices

§ HSEandsecurity§ Transportation

services

§ Decommissioningcontractors

§ Wellplugging§ Structure§ Machinery&

equipment

§ Transportationservices

§ Warehousingandstorage

§ Marinevesselservices

§ Cargotankers§ Environmental&

wastedisposal

ValueChainofUpstreamOil&Gas(RM50bnturnover– 2015)

Products

Digital players can partner with O&G service providers to achieve synergies in providing end-to-end solutions

700companies

§ Subseasystems§ Drillingequipment§ Electrical§ HVAC§ ICT§ Instrumentation§ Mechanical§ Rotatingequipment§ Safety

• EngineeringConsultancy• Geomatic Services• PlatformFabricators• OffshoreConstructions• FPSO• Subsea• DrillingRigs/Services• Well

Services/Completions

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The Government has introduced pro-innovation policies and initiatives to encourage adoption of digital technologies

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Key takeaways§ O&Gdownturnopensopportunitiesfornewways

andapplications.

§ OpportunityfordigitalandICTplayerstopartnerandleverageOGSEplayersindustryknow-howtodevelopdigitallyenabledinnovationprojectstoaddressindustrychallenges

§ Visithttp://mprc.gov.my tofindoutmoreaboutourinnovationandtechnologyinitiativesandlinkupwithMalaysianOGSEplayers

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Thank You