Professor. Dr. Pogaku Ravindra Ms. Adriana Amaludin “Oil and Gas Engineering- Key to a Sunrise Industry in Sabah from an Academic Perspective” Professor. Dr. Pogaku Ravindra Ms. Adriana Amaludin Energizing Sustainable Future

Energizing Sustainable Future Flow of Thoughts Upstream, Midstream and Downstream Operations Recent Trends in Oil and Gas Sector in Malaysia NKRA in Oil and Gas – Sustain, Grow and Diversify UMS Education Programmes and Research Projects Collaboration with Stakeholders Energizing Sustainable Future

The Scope of Energy Oil & Gas gk Energizing Sustainable Future

Energizing Sustainable Future Upstream Activities : Exploration, Drilling, Completion & Production Exploration Seismic Exploratory Drilling Appraisal Appraisal Drilling Well Testing Field Development Dev. Drilling Reservoir Production Facilities Work over / EOR/EGR Energizing Sustainable Future

Refining/Processing/Treatments Petrol, diesel, kerosene, grease, Downstream Activities : Processing, Treatment & Marketing Refining/Processing/Treatments Petrol, diesel, kerosene, grease, bitumen Gases: ethane, propane, butane Petrochemicals Plastics, synthetic rubber, solvents Transmission/Distribution Marketing Consumer Products Manufacturing Services Others Energizing Sustainable Future

Recent Trends in Oil and Gas Sector in Malaysia Malaysia produces 2% of the world’s natural gas Accounts for about 13% of the world's Liquefied Natural Gas (LNG) exports Sold largely to Japan, South Korea and Taiwan Malaysia : 3rd largest in the Asia Pacific region (After China & India) As a net exporter of oil and gas, 40% of Malaysia’s total revenue derived from petroleum sources. Energizing Sustainable Future

Energizing Sustainable Future National Key Economic Areas(NKEA) Five major growth spots of Oil and Gas Regional oil storage and trading hub Innovative approaches in developing marginal fields Intensifying domestic exploration activities Enhanced Oil recovery (EOR) initiatives Refinery And Petrochemicals Integrated Development Project (RAPID) in Pengerang, Johor and several major downstream petroleum and petrochemical projects. Energizing Sustainable Future

Energizing Sustainable Future

NKEA OIL AND GAS SECTOR: SUSTAIN Energizing Sustainable Future

New Oil and Gas Discoveries Date Resource Quantity Location JV Jan 2013 Oil and Gas Initial flows: 440 bbl./d crude oil, 11.5 MM cf./d natural gas Adong Kecil West-1 well in Block SK333, onshore Sarawak JX Nippon Oil & Gas Exploration (Onshore Sarawak) Limited and PETRONAS Carigali Sdn Bhd. April 2013 Natural Gas 1.5-3 trillion cubic feet of gas (Est.) B-14 well, Block SK310, onshore Sarawak Newfield Exploration Company, Partners Diamond Energy Sarawak and Petronas Carigali Sdn Bhd. May 2013 Oil 200 million stock tank barrels (MMstb) Cendor Graben-2, Block PM304, Offshore Peninsular Malaysia Petrofac (Malaysia PM304) Ltd, Petronas Carigali Sdn Bhd, Kuwait Foreign Petroleum Exploration Company and Petro Vietnam Exploration Production Corporation Ltd. Nov 2013 Gas 247 metres of gas column Pegaga-1 well, Offshore of Block SK320, NW of Bintulu, Sarawak PETRONAS Carigali Sdn Bhd and Mubadala Petroleum Dec 2013 292 metres of gas column Sintok-1 well, Offshore of Block SK320, NW of Bintulu, Sarawak Energizing Sustainable Future

Marginal Oil Fields Development PETRONAS - Initiated Risk Sharing Contracts (RSC) for Marginal Oil Fields development Marginal Oil Fields Development – Aims to rejuvenate the oil and gas industry, since majority of Malaysian oil fields are entering the mature phase Mature phase: Declining oil and gas extraction, after 30 years of exploration and production (E&P) Malaysia has around 106 marginal fields, with approx. 580 million barrels of oil. Energizing Sustainable Future

Enhanced Oil Recovery (EOR) Source:drillinginfo.com Energizing Sustainable Future

Enhanced Oil Recovery (EOR) 50% of Malaysia’s producing oil fields have EOR potential (Estimated) Currently, more than 10 EOR projects in the pipeline at various maturation stages. Since Sept 2014, EOR implemented at Tapis oil field (Offshore Terengganu) This project, worth RM10 billion – boost declining production between 25,000 to 35,000 barrels per day (bbl./d) in 2016 and between 3,000 to. 4,000 bbl./d in 2017. Tapis is one of seven mature fields offshore Peninsular Malaysia, developed by ExxonMobil and PETRONAS via 25-years PSC Work is being carried out on seven fields: Seligi, Guntong, Tapis, Semangkok, Irong Barat, Tebu and Palas Energizing Sustainable Future

Energizing Sustainable Future EOR cont.’ Shell and PETRONAS agreed to invest $12 billion over 30 years in two EOR projects offshore Sarawak and Sabah (Baram Delta and North Sabah) covering nine fields. Expected to boost reserves by 750 million barrels and use the world’s first offshore, chemical injection process for resource recovery Energizing Sustainable Future

Energizing Sustainable Future Deepwater Projects Source: Frost and Sullivan Energizing Sustainable Future

Energizing Sustainable Future Deepwater Projects Location JV Status Remark Kikeh Oil Field Murphy Oil and Petronas Carigali In Operation Recoverable reserve base: 400 to 700 million barrels of oil. Production plateau: 120,000bpd for the first 8 years Gumusut / Kakap Shell (operator), ConocoPhillips, Petronas Carigali, Murphy Sabah Oil  1st deep water floating production system - 19 subsea wells. Came on stream : End of 2011, production of 25,000 bbl./d. Production will increase to 120,000 bbl./d after new floating production system is commissioned Natural gas produced along the oil is re-injected into the reservoir - improves oil recovery. Malikai, Offshore Sabah Shell and ConocoPhillips Under Development Holds a production capacity of 60,000 bbl./d. Tied into the Kebabangan Northern Hub development project (KBB) via a liquid and dry gas pipeline after first gas is drawn from KBB. Expected to come online in the 3rd Quarter of 2015. Ties together Gumusut/Kakap, Malikai and Kikeh oil fields. Energizing Sustainable Future

Energizing Sustainable Future Oil Pipelines Malaysia – Relatively limited oil pipeline network, relies on tankers and trucks to distribute products onshore. Malaysia’s main oil pipelines connect oil fields offshore Peninsular to onshore storage and terminal facilities. Peninsular Malaysia: 124-mile Tapis pipeline runs from Tapis oil field, ends at the Kerteh plant in Terengganu, as does the 145-mile Jerneh condensate pipeline. Energizing Sustainable Future

Energizing Sustainable Future Oil Pipelines Sabah: The oil pipeline connects offshore oil fields with the onshore Labuan oil terminal – this network will expand following the development of the Kebabangan cluster, Malikai, Gumusut / Kakap and Kikeh oil fields. Sarawak : Several other oil pipelines connecting offshore fields with the onshore Bintulu oil terminal Energizing Sustainable Future

Refining, Storage and Transit Malaysia – Plans to become a regional oil trading and storage hub by increasing the country’s refining and storage capacity – due to rising regional and domestic demand for crude oil and oil products. PETRONAS: Plans to build a RM60 billion Refinery And Petrochemicals Integrated Development (RAPID) complex in Pengerang, Johor (End of 2017). This project includes a 300,000 bbl./d refinery. Malaysia’s expansion of its oil terminal and storage capacity : To meet the growth of oil storage and trading within Asia. Energizing Sustainable Future

Refining, Storage and Transit Cont.’ Malaysia’s oil product and crude oil terminals: Located along the eastern coast of Peninsular Malaysia and offshore as floating storage and production facilities. MISC Berhad and Vitol Group: Plans to double the storage capacity at Johor Terminal (the country’s largest oil terminal) by mid-2014 Pengerang oil storage terminal: Comes online on 2017 Sabah Oil and Gas Terminal (SOGT), Kimanis: Receive oil and gas starting 2014 SOGT – Central hub for hydrocarbon development in offshore Sabah with a design capacity to process Crude Oil: 260,000 bbl./d, Condensates: 77,000 bbl./d Natural Gas: 1.3 billion cubic feet/day Energizing Sustainable Future

Energizing Sustainable Future Source: Facts Global Energy, IHS Global Insight, OGJ, IEA, Petronas, Shell (2013) Energizing Sustainable Future

Outlook for the Oil and Gas Industry Oil and Gas Industry: Continues an important role in Malaysian economy PETRONAS: Has a 5-years RM300 billion capital expenditure (CAPEX) plan to reverse declining production There is much catch up to do after having spent only RM72 billion (24% of the amount) between 2011 and January 2013. Private Investment: RM189 billion Public Investment: RM106 billion Energizing Sustainable Future

Energizing Sustainable Future Outlook cont.’ PETRONAS started the year with a five-years umbrella contract awarded to four engineering services contractors Contract scope: Domestic upstream oil and gas engineering services (front end engineering design and detailed design works) Growth for oil production is set to outpace consumption due to positive demand for oil within the Asian region. Technip Consultant (M) Sdn Bhd, Perunding Ranhill Worley Sdn Bhd, RNZ Integrated (M) Sdn Bhd and MMC Oil & Gas Engineering Sdn Bhd. Energizing Sustainable Future

NKEA OIL AND GAS SECTOR: GROW Energizing Sustainable Future

GAS – THE RISING SUN OF ENERGY Globally, conventional recoverable gas resources: More than 120 years of current global consumption Total recoverable resources: Can sustain current production level (for more than 250 years) In the Southeast Asia Energy Outlook 2013 report: Gas production in SE Asia will rise from 203 to 260 billion m3 (from 2011 to 2035) Main Contributors: Indonesia, Malaysia and Myanmar. Energizing Sustainable Future

GAS – THE RISING SUN OF ENERGY (Contd.) Malaysian gas production (2011): 56 billion m3 (2nd largest in ASEAN region) Offshore Peninsular Malaysia Production: To satisfy domestic demand; Offshore Sarawak Production: 33 billion m3 feeds the Malaysia LNG (Bintulu) liquefaction terminal Strong prospects of continued exports of gas in the medium term: Backed by recent discoveries and new developments, the gas terminal will operate at full capacity (through at least 2018). The country’s gas production is projected: Will reach 70 billion m3 in 2020, before declining slightly to 65 billion m3 in 2035. Energizing Sustainable Future

Energizing Sustainable Future LNG Prospectus LNG : Meet the growing demand for efficient, cleaner and greener energy from environmentally conscious energy consumers in Asia. LNG currently contributes about 10% of the energy requirements in Asia and the share is expected to rise to 14% by 2035 (Source: IEA) The Oil & Gas industry: Responding to this new challenge by aiming to supply more LNG to energy hungry countries in Asia. Energizing Sustainable Future

Energizing Sustainable Future LNG Prospectus Cont. PETRONAS: Embarking on new projects to increase its LNG output in the coming years through project expansion and acquisition. The company will build new LNG production facilities including PETRONAS LNG 9 (Train 9) project within the PETRONAS LNG Complex in Bintulu; Floating LNG projects offshore Bintulu. Energizing Sustainable Future

Energizing Sustainable Future LNG Prospectus Cont. PETRONAS’ subsidiary company, Malaysia LNG Sdn Bhd. (MLNG) and which operates the PETRONAS LNG Complex: working on 8 new capital projects to increase the plant’s production capacity and reliability. These projects include MARLIN project (MLNG boil off gas re-liquefaction project) MLNG Boiler Rejuvenation project (MBR) MLNG Dua Rejuvenation project CO2 Removal Capacity Restoration project MLNG New Boiler project ROSE project and Industrial Effluent Treatment System Upgrade Energizing Sustainable Future

Energizing Sustainable Future LNG prospectus Cont. MLNG: Production of 29.8 Million Tonnes Per Annum (MTPA) of LNG by 2016 (increase of 4.1 MTPA - current production of 25.7 MTPA) Additional output: Train 9 (3.6 MTPA) and MARLIN project (0.5 MTPA), estimated completion in 2016. MLNG Dua Rejuvenation project: Ensuring continued safe operation and sustain the reliability and integrity of MLNG Dua plant for another 15 years, after 2015. MBR: Rejuvenation of 8 boilers after 30 yrs. of operation (To improve their reliability and restore their capacity of 380 tonnes each boiler) Energizing Sustainable Future

Energizing Sustainable Future LNG prospectus Cont. PETRONAS: Also embarking on a new LNG production facility called the Floating LNG (FLNG) offshore Bintulu – further monetization of small and stranded gas fields. PETRONAS FLNG1 project : Contribute additional 1.2 MTPA to the LNG production capacity when completed and commissioned in 2015. The second Floating LNG project (FLNG2) will come on stream in 2016, and will add another 1.5 MTPA. As of 2012, the largest importer of MLNG’s production: Japan (62%) Korea (17%) Taiwan (12%) China (9%) Energizing Sustainable Future

Oil and Gas Industry Shining in Sabah Kinabalu Non Associated Gas (KNNAG) ConocoPhillips Sipitang Oil and Gas Development Corporation Petronas Carigali Sdn. Bhd, Sabah Shell Berhad Talisman Energy Murphy Sabah Oil .Co.Ltd. Kebabangan Petroleum Operating Company Sdn Bhd (KPOC) PETRONAS Carigali Sdn Bhd ConocoPhillips, Sabah Gas Ltd Shell Energy Asia Ltd. M3NERGY Energizing Sustainable Future

NKEA OIL AND GAS SECTOR: DIVERSIFY Energizing Sustainable Future

Energizing Sustainable Future Biofuel Technology Renewable fuel sector such as ethanol and biomass based fuels can expand production activities Implementation of Green Technology for sustainable society To complement the conventional oil and gas resource supply Biodiesel production Energizing Sustainable Future

Challenges with Drop in Oil Prices Analysts forecast: Oil prices may not go up to 100 $ per barrel. Malaysian Oil and Gas sector: Major income generator for Malaysia. Resources, assets, projects should be managed effectively – reduce the unit production cost to be smaller than market price of crude oil for better profit margins Sanctioned projects – Need to be revisited for redesign, re-negotiated up to re-bid (if necessary) to save lot of unnecessary cost. However, we cannot compromise with items related to safety. Energizing Sustainable Future

Energizing Sustainable Future

Energizing Sustainable Future Upstream Challenges Management and Information Increasing the production of liquid fuels Sources of Crude Oil Operational Challenges Energy Demand and Supply Environmental Pollution Fluctuating Crude Prices Economic Uncertainty The People Shortage Marketing Energizing Sustainable Future

Energizing Sustainable Future Downstream Challenges Business Joint Ventures Global Refining Capacity Corporate communication Distribution Activities for Oil Products Crude Supply Mechanism Health, Safety and Environmental Security Manpower and Economy Refinery incapability and the Need for Expansion Pricing The cost of Services Energizing Sustainable Future

Energizing Sustainable Future Moving Forward Information Technology (IT) & automatic devices (includes robotics): Needed to solve challenges in the oil and gas industry. The latest technologies for data management, analysis, relaying and dissemination – ensuring effectiveness in the various value chains of the oil and gas industry. The text based format of XML as well as the structured format of DBMS – effective documentation of the processes to ensure appropriate data management. Energizing Sustainable Future

Energizing Sustainable Future Moving Forward Contd. NKRL (Narrative Knowledge Representation Language): Express information and set up knowledge base – e.g. monitoring gas leakages in processing plants by setting up alarm systems and notifications. Other IT state of the art technologies can be used to monitor rig activities at real time – ensure all round efficiency and overcome challenges. The good news: Many key players in the oil industry have begun leveraging the benefits of IT, but this is not enough. Integrated Oil and Gas Companies (IOCs) need to cooperate in upstream and the downstream sector to ensure efficiency in the entire processes.  Energizing Sustainable Future

Petroleum Data Integration, Information and Data Management IT industry in oil and gas industry: Developed by the World Wide Web Consortium (W3C) about a decade ago. This technology is called XML (Extensible Markup Language): It uses tags and unstructured patterns in developing requisite data for information dissemination Structured so that the information would be readable by both machines and humans XML is the most beneficial method information dissemination Energizing Sustainable Future

Energizing Sustainable Future UMS OIL AND GAS CORPORATION: EDUCATION PROGRAMMES AND RESEARCH COLLABORATIONS Energizing Sustainable Future

Education Programs UMS Oil and Gas Corporation offers a whole range of Oil and Gas Engineering Programmes: Master of Engineering in Oil and Gas Engineering Master of Science in Safety, Health, Environment and Quality Technology Bachelor of Engineering Oil and Gas Engineering Diploma in Oil and Gas Engineering (Instruments) Diploma in Oil and Gas Engineering (Mechanical) Diploma in Oil and Gas Engineering (Process) Diploma in Oil and Gas Engineering (Utility Management) Executive Bachelor Degree and Diploma Programme Professional / Competency courses for the Oil and Gas Industry Seminars, conference, workshops Energizing Sustainable Future

UMS COLLABORATION WITH OIL AND GAS INDUSTRY Sabah State Government Malaysian Public Works Department Policymakers Herriot -Watt University, Scotland Riam Institute of Technology Universidae Nacioal Timor Lorosa’e (UNTL) Meta Skills Training Service Academic Collaborators Talisman Malaysia Limited (TML) Kudat Offshore Oil and Gas Sdn. Bhd. PETRONAS Chemicals Methanol Labuan Yayasan Sabah Tokyo Econet Limited Company (TELC) Centro Ecotech Energy Technology (Dongguan) Co.Ltd Forever Sabah MIMOS Bhd. UMS Link-Silver Kris Sdn.Bhd. Labuan Financial Service Authority Oil and Gas Industry Collaborators Energizing Sustainable Future

COLLABORATION PROPOSED Faculty of Engineering UMS is actively doing research in oil and gas and biofuel technology. UMS offers collaborations in the following niche areas: Oil and Gas Engineering Deepwater Engineering Safety and Environment Integration studies of Pipelines Enhanced Oil and Gas Recovery Downstream Processing Energizing Sustainable Future

Energizing Sustainable Future EOR Projects at UMS Comparative and hybrid methods study between different methods of EOR by using Prototype EOR model and simulation. Experimental studies to optimize the CO2 injection mobility for increasing the volumetric sweep efficiency percentage of oil recovery. RSM, Minitab, Matlab, Hysis, Super Pro, LCA software shall be used for modeling and simulation of EOR projects. Energizing Sustainable Future

Energizing Sustainable Future MEOR Projects at UMS RSM, Minitab, Matlab, Hysis, Super Pro, LCA software shall be used for modeling and simulation of MEOR projects. Laboratory investigation of pH, electrical conductivity, and temperature relationships in Sabah shallow and deep water Energizing Sustainable Future

Energizing Sustainable Future MEOR advantages Highly economical, Low toxicity, biodegradability and biocompatibility, selectivity and specificity . MEOR therefore, offers good alternative in improving the recovery of crude oil from reservoir utilizing microorganisms and their metabolic products Energizing Sustainable Future

Energizing Sustainable Future MEOR Schematic Figure: Schematic of MEOR (www.netl.doe.gov). Energizing Sustainable Future

Energizing Sustainable Future MEOR Schematic Figure: Schematic of Microbial flooding recovery. (www.netl.doe.gov). Energizing Sustainable Future

Natural Gas Projects at UMS contd. REMOVAL OF CARBON DIOXIDE FROM NATURAL GAS FOR LNG PRODUCTION RSM, Minitab, Matlab, Hysis, Super Pro, LCA software shall be used for modeling and simulation of MEOR projects. Energizing Sustainable Future

Collaboration can be proposed through: Industry attachment to the students Employment opportunities for the graduates and post graduates of UMS Research Collaboration with Industry Consultancy in Upstream and Downstream-Based Industries Tailor-made Academic and Training Courses relevant to Industry Incubation Centre for Technology Development with Industry Energizing Sustainable Future

New Discoveries of Oil and Gas Reserves (Offshore and Onshore) Final Thoughts Sun shining future in Malaysia for Oil and Gas Operations UMS: A premier human resource development destination for generating the quality human capital with the involvement of all the stakeholders for sustainable society. Sustain – New Discoveries of Oil and Gas Reserves (Offshore and Onshore) Enhanced Oil Recovery (Increasing Efficiency of Oil Production from Mature Wells) Grow – Information Technology Development (Overcome Upstream and Downstream Challenges) Diversify – Developing Biofuel Technology to Complement Conventional Oil and Gas Resources

Thanks for your kind attention Sabah is Shining Keep Smiling Thanks for your kind attention Energizing Sustainable Future