PETRONAS ANNUAL REPORT PE 2011 51reimagining energy
» GLNG, QUEENSLAND, AUSTRALIA
Is a joint venture between PETRONAS (27.5%), Santos
(30%), Total (27.5%) and Kogas (15%).
The project includes the development of CBM
resources in the Bowen and Surat Basins in south-
east Queensland, construction of a 420-kilometre gas
transmission pipeline from the gas fields to Gladstone,
and two LNG processing trains with a combined
nameplate capacity of 7.8 mtpa.
Going beyond business as usual, the a 10.02MW of Feed-in-Tariff (FiT) quota shale gas to LNG in northeastern British
Group made its maiden entry into the from Sustainable Energy Development Columbia, Canada.
international power business with the Authority (SEDA) which will allow the
acquisition of a 30% stake in GESPL. development of PETRONAS’ first Solar As part of its European Energy business
Concurrently, the construction of the Independent Power Producer project in portfolio rationalisation, Star Energy
300MW Kimanis Power Plant project is the country. Group Limited was divested to IGas
also on track for completion by 2013 Energy plc whilst retaining the Humbly
to meet the increasing power needs in Since the Group’s venture into the GLNG Grove gas storage facilities. Business
Sabah. project in 2009, its unconventional growth will now be focused on enhancing
play expanded with a joint venture energy trading activities through
In growing its renewable energy with Canada-based Progress Energy PETRONAS Energy Trading Ltd.
business, the Group managed to secure Resources Corporation, to develop
52 PETRONAS ANNUAL REPORT PE 2011
GLOBAL LNG PLC Production Volume LNG Sales Volume
In million tonnes In million tonnes
During the review period, the
Group’s total LNG sales of 20.6 23.4 23.3 23.0 24.3 25.1 25.0 25.1 26.3
million tonnes was higher by 8% 17.7 22.5 1.6 19.1
compared to 19.1 million tonnes in 18.9 1.0 20.6
the previous corresponding period.
This was driven by higher PLC 22.3 1.8
volume and PETRONAS LNG Ltd 0.9
(PLL) trading volume.
22.8 1.9
LNG volume from PLC was mainly 0.4
exported to traditional customers in
Japan (59%), South Korea (15%), 23.9 2.0
Taiwan (13%) and China (6%). 0.4
The period saw PLC outperforming 17.2 1.6 0.3
its previous year’s success, with 18.3 1.4
another record production at 18.9 1.0
million tonnes for the nine month
period. The increased output in 08 09 10 11 9M PE11 08 09 10 11 9M PE11
PLC was attributed to improved
plant performance and completion PLC Egyptian LNG Traded Volume
of MLNG Dua’s debottlenecking (PETRONAS’ Equity)
coupled with various optimisation
efforts. PLC Sales Volume for PE 2011
PLL effectively played its role as a 7%
system balancer having handled 6%
1.01 million tonnes of excess
volumes from PLC. Over and above 13%
this, PLL managed to more than
double its trading volume compared 18.3 MT
to the previous corresponding
period. Moving forward, the Group 59%
aims to increase its trading positions
in Europe. 15%
Japan S Korea Taiwan
China Others
» PLC, BINTULU,
SARAWAK, MALAYSIA
Has sold more than
7,300 cargoes since its
establishment in 1983.
PLC remains one of the
world’s largest LNG
production facilities in
a single location with a
combined capacity of
about 25.7 mtpa
PETRONAS ANNUAL REPORT PE 2011 53reimagining energy
INFRASTRUCTURE, Delivery to the power sector was IN FOCUS
UTILITIES & POWER approximately 49% (927 mmscfd) of
the total volume delivered through THE PGU SYSTEM
On the domestic front, feedgas the PGU system. Non-power Is the longest pipeline in Malaysia.
supply to Peninsular Malaysia sector and exports to Singapore The 2,505 kilometres of pipeline
remains a challenge due to constituted the remaining 44% (831 connects the Kertih and Paka Gas
upstream issues from offshore mmscfd) and 6% (115 mmscfd) Processing Plants in Terengganu
Terengganu. During the period respectively. to power and non-power sectors in
under review, 2,304 million Peninsular Malaysia as well as power
standard cubic feet per day In addition to supply from offshore customers in Singapore.
(mmscfd) of gas was delivered to Terengganu, gas was also sourced
customers in Peninsular Malaysia, from Indonesia at 225 mmscfd and
Sabah and Sarawak, compared MTJDA at 348 mmscfd bringing it
to 2,563 mmscfd in the previous to a total of 573 mmscfd, higher by
corresponding period. Of that, 81% 5% than the previous corresponding
or an average of 1,873 mmscfd period of 544 mmscfd. The increase
was delivered through the PGU was contributed by the additional,
system, a decrease of 10% from temporary supply of gas from
the previous corresponding period MTJDA.
at 2,082 mmscfd. Sales gas
delivery to the power sector and The Group’s gas processing and
exports dropped by 17% and 19% transmission arm, PGB, sustained
respectively as a result of the supply world class performance with
shortfall in Peninsular Malaysia. reliability rates of 99.60% for its gas
processing plants and 99.98% for
its pipeline network.
Average Sales Gas Volume Delivery GPP and PGU System Reliability Rate
In mmscfd In percentage (%)
265 206 100 99.98
216 225 99.60
99
98
2,563 2,304
97
2,082 1,873 96
9M PE 2011 95 FY2011 PE2011
FY2008 FY2009 FY2010
Peninsular Malaysia
(PGU System) Sarawak Sabah and GPPs PGU System
Labuan
PGU System Supply Sources Average Sales Gas
In mmscfd Through the PGU System
In mmscfd
2,170 2,146 2,088 2,047 2,082 1,873 2,170 2,146 2,088 2,047 2,082
1,738 432 1,310 703 157 1,280 732 134 1,873
1,635 511 1,176 787 125 1,087 819 141 819 142
1,589 499 831
1,493 554
1,538 544 115
1,300 573
1,121
927
08 09 10 11 9M PE11 08 09 10 11 9M PE11
Offshore Peninsular Malaysia Indonesia Power Non-Power Export
& MTJDA
54 PETRONAS ANNUAL REPORT PE 2011
» PGU SYSTEM
In Malaysia, PETRONAS supplies natural gas largely through the
PGU system, which was developed to spearhead the use of natural
gas in Malaysia
OUTLOOK Final Investment Decision in
Australia last year. However,
Gas demand is growing in every Australia is expected to take a
region of the world. The share of breather due to rising costs and
natural gas in the global energy mix shortage of skilled labour. The next
is expected to increase from 21% wave of growth is expected to be
in 2011 to 25% in 2035, pushing from North America. Nonetheless,
the share of coal into decline and the uncertainty with government
overtaking it by 2030. policies and environmental issues
will determine the success of
Although currently LNG only North America’s LNG projects.
accounts for less than 10% of gas PETRONAS is strengthening its
traded, this is expected to increase LNG position in the medium-and-
in the future due to its abundance long-term by venturing into shale
and flexibility of supply. The global gas to LNG project in Canada,
LNG market will remain tight over tapping the opportunities of
the next two to three years due to abundant shale gas in North
the Fukushima incident in March America.
2011 and the uncertainty over
Japan’s nuclear policy. Gas pricing remains non-uniformed
based on geographical market
The world has seen an extraordinary dynamics, with gas contracts in
number of LNG projects reaching Asia and much of Europe to be
PETRONAS ANNUAL REPORT PE 2011 55reimagining energy
» PGB RGT
In 2012, PETRONAS
is poised to write
Malaysian history with
the completion of
Malaysia’s first LNG
regasification terminal
in Melaka, targeted
for August 2012. This
will facilitate the
importation of LNG
by PETRONAS and
third parties towards
ensuring security of gas
supply for the nation in
the future.
oil-indexed while North America On the domestic front, ensuring PETRONAS will continue to explore
and to some extent Europe hub the security of gas supply remains opportunities in the power and
prices will be heavily influenced our primary focus. LNG imports are renewable energy sectors whilst
by the regional price benchmark. inevitable in meeting rising demand enhancing its capabilities in the
This situation is expected to due to depleting offshore resources. solar power generation business.
remain in the foreseeable future. However the domestic gas demand
Hub prices will only take form will be affected by the Government’s
in the Asia Pacific region when gas pricing policy.
there are among others, sufficient
liquidity and appropriate enabling The demand for power generation is
regulation. Amidst this gas price expected to rise in emerging nations
fragmentation, PETRONAS will on the back of economic growth.
continue to leverage on the
long-term oil-indexed LNG supply The push for renewable energy
contracts supplying primarily to to generate power is gaining
traditional buyers in East Asia. momentum, driven by environmental
At the same time, PETRONAS and energy security considerations
strives to become a global LNG as more governments are promoting
player through trading activities, green policies.
diversification of supply sources
and market expansion. This
includes increasing its presence in
the Atlantic Basin.
Disclaimer on forward-looking statements: Forward-looking statements involve inherent risks and uncertainties. Should one or more of these or other uncertainties or risks materialise,
actual results may vary materially from those estimated, anticipated or projected. Specifically, but without limitation, capital costs could increase, projects could be delayed, and anticipated
improvements in capacity, performance or profit levels might not be fully realised. Although PETRONAS believes that the expectations of its management as reflected by such forward-looking
statements are reasonable based on information currently available to it, no assurances can be given that such expectations will prove to have been correct. Accordingly, you are cautioned not
to place undue reliance on the forward-looking statements, which speak only as of the date they are made. PETRONAS undertakes no obligation to update or revise any of them, whether as a
result of new information, future developments or otherwise.
56 PETRONAS ANNUAL REPORT PE 2011
98.4 %
98.4% overall reliability rate of
the domestic refineries.
59.5%
PDB retains its position as a market
leader for Commercial Business with
59.5% market share.
142.1million
barrels
Group’s petroleum product sales volume
grew by 12% against the same period last
year, testimony of the aggressive growth
and portfolio management of retail and
marketing arm operations domestically and
on international fronts.
PETRONAS ANNUAL REPORT PE 2011 57reimagining energy
strengthening
the building
blocks
58 PETRONAS ANNUAL REPORT PE 2011
DOWNSTREAM
targets. We will pay more attention to OVERVIEW
growth and operational performance
while talent management, governance and PETRONAS Downstream business plays
quality assets remain important elements a strategic role in enhancing the value of
to achieve our targets. In growing our Malaysia’s oil and gas resources through
business further, we will be securing its integrated operations in refining and
partners for the RAPID project and trading, marketing of crude oil and petroleum
expanding our lubricants business mainly products locally and internationally, as well
by pursuing acquisition opportunities. as through manufacturing and marketing of
petrochemicals products.
DATUK WAN ZULKIFLEE WAN ARIFFIN I would like to take this opportunity to thank
our dedicated teams in the Downstream PETRONAS owns and operates three
The period under review was indeed business for all their professionalism, refineries in Malaysia and one in South Africa.
another exciting period for Downstream determination and commitment in making Two of the Malaysian refineries are located
Business as our focus was on this period a significant success. I hope we in Melaka and comprises PETRONAS
strengthening our business foundation will continue to strive to be a merit-based Penapisan (Melaka) Sdn Bhd (PP(M)SB),
through preserving quality assets with high performing business. a 100% owned PETRONAS entity and
active portfolio management, strengthening Malaysian Refining Company Sdn Bhd
governance by improving hygiene factors HIGHLIGHTS (MRC), a joint venture refinery with Conoco
as well as compliance to process and Philips. The third refinery, PETRONAS
procedures. We also focused on talent Sub-Saharan Penapisan (Terengganu) Sdn Bhd (PP(T)SB)
management by placing the right people in Africa is located on the East Coast of Malaysia
the right job and conducted performance in Kertih. PETRONAS owns a refinery in
measurement through benchmarking with Establishment of PLAL in growing the Durban, South Africa through its majority
best practices. lubricant business in African countries. shareholding in Engen Petroleum Limited
(Engen). Through its wholly-owned global
For growth initiatives, we have completed SAMUR trading and marketing subsidiary PETRONAS
a Detailed Feasibility Study for a Refinery Trading Corporation Sdn Bhd (PETCO),
and Petrochemical Integrated Development PETRONAS Chemicals Fertiliser Sabah Sdn PETRONAS further enhances the value of its
(RAPID) project and awarded the Front-End Bhd through PETRONAS Chemicals Group own equity crude and petroleum products.
Engineering Design (FEED) contract amidst Berhad (PCG) formally awarded the BEPCC
a very tight schedule. The Sabah Ammonia Alliance contract for the SAMUR project. In Malaysia, PETRONAS Dagangan Berhad
Urea (SAMUR) project achieved a key (PDB) manages all domestic marketing
milestone with a Final Investment Decision and retailing activities of a wide range
and the award of the Basic and Detailed of petroleum products. PETRONAS
Engineering, Procurement, Construction also operates service stations in various
and Commissioning (BEPCC) contract. We international markets including Indonesia,
also incorporated PETRONAS Lubricant South Africa, Sudan and Thailand.
Africa Ltd (PLAL) to spearhead our lubricant PETRONAS is the leading marketer of
business expansion in Africa. petroleum products in Malaysia with a
total market share of 41.6% and is the
Moving forward for 2012 we will continue leading retailer and marketer of petroleum
to focus on key areas to achieve our products in Southern Africa through Engen.
PETRONAS Lubricants International Sdn
Bhd (PLI) is the global lubricants arm of
PETRONAS ANNUAL REPORT PE 2011 59reimagining energy
REFINING & TRADING Utilisation Rate
for Group’s Refineries
PETRONAS owns and operates four In percentage (%)
refineries with a total refining capacity
of about 500,000 barrels a day. The 96.7 97.3
Group’s crude oil and petroleum products
marketing and trading activities span the 91.6 91.0
globe and our crude oil portfolio includes
a range of grades from various regions. 86.2
CRUDE OIL REFINING 85.7 82.4 84.2
80.8 79.3
The Group’s domestic refineries continue
to play a strategic role in adding value to 08 09 10 11 PE11
the nation’s petroleum resources, as well
as enhancing the security of its energy Domestic Refineries Total Refineries
supplies. In the period under review, the
Group’s domestic refineries collectively Refining Throughput
recorded a lower throughput volume of In million barrels
76.8 million barrels as compared to the
total throughput volume during the same 150.9 158.4
period last year of 80.3 million barrels. 115.8 35.1 138.0
This is due to planned maintenance 126.8 31.6 134.4
shutdowns at both MRC and PP(T)SB 103.6 99.0
and is reflected in the lower utilisation rate 103.9 34.1
of 84.2%. 107.6 26.8
80.3 23.3
76.8 22.2
The overall reliability rate of the domestic 08 09 10 11 9M PE11
refineries increased to 98.4%, testimony
PETRONAS with a presence in more than 20 to the Group’s continued commitment Domestic Refineries
countries encompassing manufacturing and to operational excellence. The strong Overseas Refineries
marketing infrastructure. The PLI product emphasis on safe operations was
range includes lubricants and functional fluids recognised with both PP(M)SB and
for the automotive and industrial markets as PP(T)SB winning major awards in the
well as a range of car care products. oil and gas sector namely the Chemical
Industries Council of Malaysia (CICM)
PCG is the leading petrochemicals producer Award 2010, the Prime Minister’s
in Malaysia and one of the largest producers Hibiscus Award 2010/11. PP(M)SB was
in South East Asia. It primarily manufactures, also recognised in the Malaysian Society
markets and sells a diversified range of of Occupational Safety & Health (MSOSH)
petrochemical products which include olefins, Awards 2010 and the Royal Society for
polymers, fertilisers, methanol and other basic the Prevention of Accidents (RoSPA)
chemicals and derivative products. PCG has Award 2011.
over 25 years of combined experience in the
petrochemicals industry.
60 PETRONAS ANNUAL REPORT PE 2011
Marketing Volumes Trading Volumes
In million barrels In million barrels
190.4
206.7 172.0 85.6 162.6
136.3
188.5 75.2 83.5 118.3
94.6 62.2 49.9
76.4 60.3 51.8166.8 170.9 116.9 73.5
58.8 55.6 52.4 131.1 54.9
69.6 51.4 49.9 60.5
51.4 38.3 41.4 116.6 96.8 104.8
46.5 35.4 34.7
79.1 62.8
63.4
56.4
08 09 10 11 9M PE11 08 09 10 11 9M PE11
Crude Oil
Malaysian Crude Oil Exports Petroleum Products
Petroleum Products Exports
Sales of Foreign Equity Crude Oil
(FEC)
CRUDE OIL & PETROLEUM CRUDE OIL & PETROLEUM
PRODUCTS MARKETING PRODUCTS TRADING
The Group’s crude oil and petroleum products The Group’s crude oil and petroleum products
marketing activities decreased for the period trading activities for the period under review
under review at 116.6 million barrels against decreased by 13.2% to 118.3 million barrels.
the total volume for the same period last year
of 131.1 million barrels attributable to lower The total volume of crude oil traded during
production of Malaysian Crude Oil (MCO). the year increased to 63.4 million barrels
PETRONAS MCO entitlement reduced by 9.5% resulting from higher third party trades to cover
to 46.5 million barrels from 51.4 million barrels for the shortfall of equity marketing volumes
during the period due to production challenges. and increased opportunistic trading due to
the volatile crude oil market. However, the
The Group’s sales of Foreign Equity Crude total volume of petroleum products traded
Oil (FEC) decreased by 16.2% to 34.7 million decreased to 54.9 million barrels mainly due
barrels from 41.4 million barrels during the same to lower trading risk appetite as a result of
period last year reflecting lower entitlements global macroeconomics and financial exposure
from the Group’s International Operations amid concerns. This was further aggravated by
higher global crude oil prices. geopolitical events that affected global supply
and demand.
The Group also exported lower volumes of
petroleum products of 35.4 million barrels
against the total volume for the same period
last year of 38.3 million barrels mainly due to
lower products available for export as a result of
planned maintenance shutdowns at domestic
refineries coupled with higher domestic
consumption.
PETRONAS ANNUAL REPORT PE 2011 61reimagining energy
» ENGEN SERVICE STATION Retail Stations 1590
Engen has re-positioned its retail No. of stations
destination beyond the typical
petrol station outlets by introducing 1572
“driving & shopping” experiences
under one roof concept. In South 1429 1473 1489 955 968
Africa, the convenience stores 912 925
continues to deliver incomparable
“Service Excellence” by offering 892
more value to the customers by the
continuous upgrading of selected 08 09 10 11 PE11
stores to the Engen 1-Plus Store
model; a model that offers “all in
one basket” convenient shopping
experience from groceries to movies
to fast foods and to a cup of coffee.
PDB ENGEN across the African continent
DOWNSTREAM RETAIL BUSINESS superior power, better acceleration and
MARKETING savings for customers. On top of that,
Petroleum products are marketed to PDB also became the first fuel operator
Downstream Marketing oversees the the consumer through a network of in the country to introduce the mobile fuel
retail and marketing activities for the over 2,558 retail stations in Indonesia, dispenser launched and operated at the
full range of petroleum products which Malaysia, South Africa, Sudan, Thailand Sepang International Circuit in November
include diesel, Jet A1, lubricants and and across Sub-Saharan African 2011. This is for the convenience of
motor gasoline as well as Liquefied countries as well as to the various customers to fuel up with PETRONAS’
Petroleum Gas (LPG) for home and industrial and commercial markets. high-powered PRIMAX fuels at the
commercial use. circuit.
PDB is the domestic retail arm while
In the period under review, the Group’s internationally the business is managed PDB also increased its retail station
petroleum products’ sales volume grew by Engen, PETRONAS Marketing Sudan network to 968 and has the largest
by 12% to 142.1 million barrels against Limited (PMSL), PT PETRONAS Niaga network of convenience stores at retail
the same period last year. This was Indonesia (PTPNI) and PETRONAS Retail stations in Malaysia with 630 Kedai
testimony to the aggressive growth and Thailand Co Ltd (PRTCL). Mesra convenience stores.
portfolio management of the retail and
marketing arm operations domestically For the period under review, PDB Taking customer service to the next
and on international fronts. registered 31% retail market share. level, PDB introduced its car spa
outlets offering premium car washing
IN FOCUS Active involvement and years of strategic and detailing services complete with
Expansion of LPG partnership with the Formula 1 team comfortable waiting rooms. The pilot
Terminals from allowed PDB to build a strong capability phase was rolled out at selected
four to five with the in fuel technology. This experience PETRONAS stations in Kuala Lumpur
construction of a has enabled the R&D team to develop and Johor. As part of PDB’s efforts to
new terminal in Cebu the PETRONAS Fluid Technology go “All The Way” for its customers, PDB
further strengthens the Solutions™ which benefits everyday will launch the PETRONAS Durance and
downstream marketing customers. Arexons, a range of high quality car care
portfolio products and air fresheners developed
PDB successfully launched PRIMAX 95 by its Italy based sister company, PLI.
Xtra in April 2011, a new fuel inspired
by F1TM technology, proven to deliver
62 PETRONAS ANNUAL REPORT PE 2011
Engen continues on its journey towards COMMERCIAL In South Africa and Sub-Sahara, Engen
becoming a Champion in South Africa and BUSINESS continues to accelerate the growth
Sub-Saharan Africa with a retail network journey in transportation, mining,
of 1,590 retail stations. This includes 714 The commercial business covers the agriculture and other industries through
convenience stores and in excess of 300 marketing and sales of petroleum sealing of contracts with several new
fast food outlets and corner bakeries. products in bulk to the various customers.
industrial and commercial sectors.
In the period under review, Engen PETRONAS through its domestic and PMSL maintained its position as the
successfully completed the acquisition international marketing arms, continues preferred supplier in the market it
of Chevron’s downstream business in to strengthen its market leadership operates in. The company made great
seven countries including Mozambique through personalised and differentiated strides by securing new contracts with
and Zimbabwe. Engen also completed the services while persistently securing new several new international airlines. PMSL’s
re-branding of 66 selected former Chevron contracts. outstanding performance in delivering the
service stations. UN-African Union Mission peacekeeping
PDB currently is the market leader in force in Darfur (UNAMID) contract by
PETRONAS continues to strengthen its the commercial business with 59.5% providing quality and reliable product
position in the LPG market under the brand market share and its commercial supply at stringent HSE standards
name of “Gas PETRONAS” in Malaysia, presence is prominent in the aviation and resulted in the contract being extended
Philippines and Vietnam. Regionally, bitumen sectors with 73% market share to December 2012.
PETRONAS LPG marketing companies respectively. In the period under review,
include PETRONAS Energy Philippines Inc. PDB successfully secured new aviation PETRONAS also has commercial
(PEPI) and PETRONAS (Vietnam) Co Ltd contracts with prominent customers and business presence in Indonesia
(PVL). Both business units have extended improved their market share with Arab and Thailand which is managed by
their nationwide logistics and distribution Air Carriers Organisation (AACO) namely PTPNI and PRTCL respectively. Both
system for seamless supply of products to Gulf Air, Jordan Aviation Company, companies continued their path of
the customers. Oman Air & Yemen Airways from 30% to growth by improving their nationwide
39%. PDB bitumen sales increased by logistics and distribution capability for
22.2% compared to the same period last seamless supply of products to their
year as a result of aggressive commercial customers.
strategies capturing demand from the
10th Malaysia Plan and the Economic
Transformation Programme (ETP).
PETRONAS ANNUAL REPORT PE 2011 63reimagining energy
» PETRONAS IS THE
OFFICIAL LUBRICANTS
PARTNER FOR LOTUS
MOTORSPORT CARS
PETRONAS was
announced as Lotus’
official lubricants partner
for GT Motosport. The
newly forged partnership
will work on many levels
including a comprehensive
technical and business
collaboration agreement
with PLI and Lotus
Motorsport.
LUBRICANTS PETRONAS also became the first technical and
title sponsor to Industrial Vehicle Corporation
PETRONAS’ lubricants business through PLI S.p.A (Iveco) in Dakar and will be the supplier for
formulates, manufactures and sells a wide range of functional fluids and lubricants namely, Paraflu,
lubricants for the automotive, industrial and marine Tutela and Urania, for all its competitions.
industries. Its lubricants are marketed under various
brands which include Selenia, Syntium and Urania.
To strengthen its market leadership, PLI is
committed to its role as a company that offers Fluid
Technology Solutions™ which entails a structured
and focused approach to design, develop and
deliver the right fluid to the right user to realise
better value from PETRONAS Group’s product
offerings.
IN FOCUS In the period under review, PLI signed a multi-year
premium partnership agreement as Lotus’ official
PETRONAS LUBRICANTS lubricants partner for GT Motorsport. PETRONAS
INTERNATIONAL is the official lubricants partner for Lotus Motorsport
Is set to invest Euro 50 million to cars competing in various high profile GT categories
build a state-of-the-art Research and will also collaborate with Lotus to become
& Development centre in Turin, the official and exclusive supplier of lubricants for
Italy which will be Europe’s aftermarket servicing worldwide.
biggest centre scheduled to
be completed in 2015. This is Another achievement is a sponsorship and supply,
amidst efforts to enhance its technical and commercial collaboration agreement
technical and product capability with OTK KART Group for five years based in
in providing branded quality fluid Brescia, Italy. OTK is one of the most prominent
solutions. karting companies in the world, that manufactures
and distributes karts and engines. It is also active in
motorsport competitions.
64 PETRONAS ANNUAL REPORT PE 2011
PETROCHEMICAL BUSINESS impressive gains of about 40% due to Overall, plant utilisation rate for the period
increasing demand and major plant under review was lower at 78.6% compared
The period under review saw the global outages in Japan, Singapore and Taiwan. to 79.7% due to heavy plant maintenance
economy growing more slowly at 3.9% activities carried out in various plants and
compared to 5.3% in 2010. The European The Fertiliser and Methanol (F&M) constrained gas supply availability.
economies particularly Greece, Portugal, Business Segment saw strong market
Spain and Ireland continued to falter, while the prices throughout the period, averaging Production Volumes 6.0
United States showed marginal growth. Asian higher than 2010 by about 44% and 43% In million tonnes
economies were also impacted by the slowdown for urea and ammonia respectively whilst
in the US and Europe as evidenced in China and methanol prices were higher by 21%. This 9.3 9.2
India where their GDP growth were reported at segment was well supported by strong 7.8 8.2
lower levels in 2011. demand from the agriculture sector in 6.0
countries such as India and Pakistan, as
The petrochemical industry had its own well as in Latin America, whilst persistent 08 09 10 11 9M PE11
challenges in 2011, as energy prices escalated supply tightness due to plant outages
amidst a slowdown in the economy. Increased supported the methanol market in South Revenue Contribution
geopolitical tensions between the US and Iran East Asia. In percentage (%)
throughout 2011 saw crude prices staying
above USD100 per barrel, pushing the naphtha The domestic market, in particular, 41.0
feedstock costs to reach a high of USD957 per contributed 41% to PCG’s revenue,
metric tonne. Several naphtha based crackers reaffirming its leadership position 18.5
were reported reducing their throughput rates in Malaysia as the largest olefins
as margins were squeezed. However, PCG’s manufacturer and the sole producer of Malaysia 40.5 Others
ability to leverage on its advantageous gas methanol and urea. China
feedstock position coupled with increases in
average market prices for olefins and derivatives Total production remained at about 6.0
as well as fertilisers and methanol have helped million tonnes compared to the same
it weather some of the headwinds faced during period last year. PCG sold 2.3 million
the period. tonnes of olefins and derivatives and 2.3
million tonnes of fertilisers and methanol,
The average market prices under Olefins and representing decrease of 7.1% and
Derivatives (O&D) Business Segment registered 6.0% respectively compared to the
an increase of 18% compared to the same corresponding period.
period last year. Products such as paraxylene
(PX) and monoethylene glycol (MEG) showed
» MEGAMETHANOL PLANT, SABAH OUTLOOK
The largest producer of methanol by volume in South East Asia
and fourth largest in the world. The intensified economic strain in the Euro
zone and instabilities in other countries will
continue to plague global economic growth
throughout 2012. In the current climate,
emerging economies have also shown
signs of growth moderation primarily due
to a deteriorating external environment and
the impact of tightening monetary policy,
especially in China. Despite a rather gloomy
economic outlook, global oil demand is still
projected to grow at a revised rate of 1.2% in
2012 compared to 1.5% as projected in 2011.
This downward revision is primarily attributed
to weaker demand from Europe as well as
the higher oil prices. The majority of global oil
demand growth will emanate from emerging
economies, with China contributing 25% of
this growth in 2012.
PETRONAS ANNUAL REPORT PE 2011 65reimagining energy
Volatility stemming from the persistent Refinery capacity additions in the Middle also making good progress with the
political turmoil in the Middle East and East is only anticipated to come on RAPID project to be undertaken in
North African regions continues to stream by 2015, and as such will not Pengerang, Southern Johor. During
impose risk premiums on crude prices. have an effect on product supply, which the period under review, PETRONAS
However, physical crude supplies in turn will support relatively strong completed the detailed feasibility study
are not expected to be affected even refining margins. Overall, complex for RAPID and the project aims to reach
with Iran sanctions as other OPEC refineries will continue to enjoy higher its Final Investment Decision in the
countries have already committed to margins compared to hydro skimming middle of 2013. Subject to its viability,
increase production, if necessary in refineries, and this will prompt refiners to RAPID presents the opportunity to
order to compensate for the shortfall. pursue upgrading of existing refineries to significantly grow the petrochemical
Furthermore, the gradual return of be able to process heavier crudes. product portfolio, moving into high value
roughly 1.2 million barrels per day of specialty chemicals. It will also diversify
disrupted Libyan crude as well as a Chemical demand in emerging the feedstock base from predominantly
900 thousand barrels per day increase economies will continue to support gas to naphtha.
in non-OPEC oil production will offset growth in the industry amidst high
minor declines in the other oil producing feedstock prices and a bearish outlook In addition to its Asia Pacific focus,
countries. on the global economy. It is estimated Africa remains a key component of
that demand in emerging markets will the portfolio where expansion will be
As such, the recovery of the global grow at an expected 6.2% in 2012, pursued on an opportunistic basis. The
economy remains fragile largely due compared to 5.4% in 2011. Asian growth and optimisation of the global
to the risk of recession in the EU, the countries such as China and India, as lubricants business remains a priority for
slowdown of the US and Chinese well as other emerging markets such PETRONAS, albeit the mature markets
economies and sustained high oil prices. as Brazil will remain the main focus for will pose a greater challenge for this
chemical exporters in 2012. However, business.
On the refinery front, Asian refiners exporters to Asia and Brazil will see fierce
will experience better margins, albeit competition as product flows will begin In order to secure the value creation
at slightly lower levels than in 2011, to be redirected into the region. This from the growth initiatives and existing
compared to its Western counterparts. will be brought about by the emergence businesses, a strong focus will be
However, in Europe, improved crude of the US as a low-cost gas-fed placed on disciplined project execution,
supplies will alleviate pressure on refiners petrochemical producer coupled with the performance enhancement, molecule
while refinery closures will contribute exports from the new capacity additions optimisation supported by continuous
to improved margins in the region. The in the Middle East. It is thus expected portfolio management, governance
outlook for US refining margins will be that margins will remain under pressure, and HSE compliance. Strengthening
fragmented based on their crude diets especially for naphtha-based producers. product brand across downstream will
as well as logistical challenges in certain also be emphasised to enhance the
regions. Refineries processing West Growth in Asia, albeit at a lower rate than brand equity. Talent management and
Texas Intermediate (WTI) crude will enjoy in 2011 will bode well for PETRONAS high attrition rates pose a challenge, but
wider discounts while others may benefit which is strategically well positioned will be addressed through dedicated
from some refinery rationalisation. in this region. Through its expansion initiatives. The organisational climate
plans in Asia Pacific especially in the in the Downstream Business is also
A positive outlook on Asia’s product petrochemical and lubricant businesses, enhanced by working towards common
demand and the rationalisation and PETRONAS will capitalise on the growth goals in line with the PETRONAS’ Shared
upgrade of inefficient refineries in the in the region while adding value to its Values and striving for it to be a “Merit-
region will keep margins relatively strong. downstream portfolio. PETRONAS is Based High Performing Business”.
Disclaimer on forward-looking statements: Forward-looking statements involve inherent risks and uncertainties. Should one or more of these or other uncertainties or risks materialise, actual
results may vary materially from those estimated, anticipated or projected. Specifically, but without limitation, capital costs could increase, projects could be delayed, and anticipated improvements
in capacity, performance or profit levels might not be fully realised. Although PETRONAS believes that the expectations of its management as reflected by such forward-looking statements are
reasonable based on information currently available to it, no assurances can be given that such expectations will prove to have been correct. Accordingly, you are cautioned not to place undue
reliance on the forward-looking statements, which speak only as of the date they are made. PETRONAS undertakes no obligation to update or revise any of them, whether as a result of new
information, future developments or otherwise.
66 PETRONAS ANNUAL REPORT PE 2011
MARITIME
& LOGISTICS
HIGHLIGHTS OVERVIEW
Customised Led by subsidiary MISC, PETRONAS’ maritime
Solution and logistics business is involved in owning
and operating of ships, tank terminals and
AET to supply two Marine Capture Vessels offshore floating facilities as well as in marine
(MCVs) for hydrocarbon containment in the repair, marine conversion and engineering and
event of a deep water well control incident construction works.
Liner MISC, with more than 160 owned and in-
Business chartered vessels and a combined tonnage of
Exit more than 15 million deadweight tonnes (dwt),
is one of the world’s leading owner-operator
First in a series of bold steps to reconstruct of LNG carriers and the third largest owner of
MISC Berhad’s (MISC) business portfolio Aframax fleet in the world.
FSUs FLEET SIZE As at 31 As at 31
MISC-Owned Fleet by December March
Conversion of two liquefied natural gas Business 2011
(LNG) tankers into Floating Storage Units 2011
(FSUs) for Malaysia’s first regasification LNG Carriers 29
terminal in Melaka, targeted for August Petroleum Tankers 27
2012 Chemical Tankers 50
53
19 19
Liner 16 18
Offshore Facilities 55
FPSO 55
FSO 21
MOPU 127 127
TOTAL
*Note: Excluding Tenaga Satu and Tenaga
Empat, which are currently undergoing
conversion works into Floating Storage Units
(FSUs)
PETRONAS ANNUAL REPORT PE 2011 67reimagining energy
» Seri Anggun
MISC’s LNG carrier
Business conditions in the maritime The period under review saw record Triple-E ships with capacity of up to
industry continued to be extremely deliveries in terms of newbuilds. In the 18,000 Twenty Foot Equivalent Units
challenging for MISC for the Very Large Crude Carrier (VLCC) space, (TEUs), the largest container vessel
period under review. Uncertainty the market witnessed a third straight ever built. These Triple-E vessels are
in macroeconomic direction and year of double-digit tonnage addition. designed to give the operators an
protracted geopolitical tensions across Sixty VLCCs totalling 18.5 million dwt estimated 40% fuel efficiency and 30%
the globe did little to bolster demand or 11.2% of the global VLCC fleet were overall cost reduction, assuming that
growth for shipping services that had delivered in 2011, dwarfing the 15 these vessels can be filled to a targeted
weakened considerably since the onset VLCCs with four million dwt capacity level of utilisation. While this may
of the global financial crisis in 2008. that were scrapped. The Aframax serve the owners and operators of the
Supply growth continued to outstrip segment added a slower 6.4% of vessels well from a cost and possible
demand growth, further exacerbating an tonnage or 4.2 million dwt. profit standpoint, it is detrimental from
already oversupply situation dating back an industry perspective given the
to 2009. Meanwhile, competitors in the aggravation to an already oversupplied
containership market continued to push market.
the boundaries with orders of giant size
68 PETRONAS ANNUAL REPORT PE 2011
With over capacity of more than LNG space. Two of MISC’s first Heavy Engineering Holdings
20%, freight rates inevitably generation conventional LNG ships Bhd or MHB). Enhanced Oil
suffered and this was most evident are undergoing conversion works Recovery (EOR) activities and the
in the petroleum tanker market. into FSUs and will form an integral development of unconventional
Rates plummeted below operating part of the first regasification sources of energy such as
cost per day in 2011, serving as a terminal in Malaysia. marginal and deepwater fields,
grim reminder of the severity of the create sustained demand for
downturn on the shipping industry, MISC’s fully owned subsidiary larger and more complex offshore
compared to previous cycles. AET Tanker Holdings Sdn Bhd structures which both businesses
scored a first when it was selected could exploit. During this period,
Despite the very depressed by the Marine Well Containment MISC’s offshore division awarded
outlook for the shipping industry Company (comprising leading the conversion of FPSO Cendor
in general, there remains growth oil companies in the US) to to MHB, which will replace
opportunities for MISC. The LNG supply two Marine Capture the existing FSO Cendor once
shipping space was a bright spot Vessels (MCVs) for hydrocarbon completed in 2013. For the
in 2011. The earthquake in Japan capture services in the event of a period under review, MHB inked
early 2011 led to the shutdown of deepwater well control incident in RM2.9 billion in new contracts
nuclear power plants and raised the US Gulf of Mexico. The service encompassing construction and
LNG import demand from Japan contract for these two MCVs will installation of offshore structures
as a substitute fuel. This bodes run for 20 years. under ExxonMobil’s EOR projects
well for demand in the short to and Telok Gas Development.
medium term LNG shipping. Despite the challenges to the
Meanwhile, the emerging demand shipping industry brought about
for fast track gas importing by the high oil price environment, it
facilities such as Floating Storage also presented new opportunities
Regasification Units (FSRUs) to MISC’s offshore division
and FSUs provided product and heavy engineering division
diversification opportunities in the (through Malaysia Marine &
» AET
One of the largest
tanker operators
in the world with
more than 80
petroleum vessels
PETRONAS ANNUAL REPORT PE 2011 69reimagining energy
Following MHB’s listing in October 2010, the » FABRICATION YARD IN PASIR
Company announced the acquisition of Sime GUDANG, JOHOR, MALAYSIA
Darby Engineering Sdn Bhd’s yard in Pasir The newly-acquired yard by
Gudang. The enlarged yard space will allow MHB offers a unique docking
MHB to deliver increasingly challenging projects facility, having one of the
of larger scale and complexity. A joint venture largest shiplift in the world to
formed during the period between MHB and cater for vessels of up to 50,000
Technip in the area of hull design engineering dwt on its land berth.
services will further build on the expertise and
value proposition of the yards.
The trying times in the shipping industry also
highlighted the need for MISC to continuously
revisit the resilience and robustness of its
business portfolio. Following a deliberate
review of the long-term strategic fit of the
liner business within the Group’s portfolio, a
decision was taken in November 2011 for MISC
to exit the liner business. This will be the first in
a series of bold steps that MISC will undertake
in the coming year or two in rebalancing its
business portfolio to ensure greater resilience
and robustness of income and growth.
70 PETRONAS ANNUAL REPORT PE 2011
TECHNOLOGY
& ENGINEERING
HIGHLIGHTS OVERVIEW
Technology TECHNOLOGY &
breakthroughs ENGINEERING FOR
SUPERIOR PERFORMANCE
Enhanced Oil Recovery (EOR), carbon dioxide
(CO2) management, contaminants removal, In the ever competitive oil and gas industry,
green and sustainable technologies were technology is one of the key enablers that
pursued during the period under review. sets industry leaders apart from the rest.
With the days of ‘easy-oil’ fast disappearing,
RM1.6 billion PETRONAS is faced with various challenges
such as depleting resources and ageing
Provision of technical solutions and services facilities, gas fields containing high CO2 and
by in-house technical expertise achieved other contaminants such as mercury, acid and
a value creation of about RM1.6 billion for sulphur.
PETRONAS through optimisation, yield
improvement and cost avoidance. PETRONAS is intensifying efforts in EOR to
sustain oil production and simultaneously
ISO 9001:2008 explore technologies to economically develop
gas fields containing high CO2. Continuous
The Integrated Plant Operations Capability efforts are also being pursued to develop
System and the management of PETRONAS technologies to manage contaminants in oil and
Technical Standards achieved ISO 9001:2008 gas.
certification (Quality Management System)
from SIRIM QAS International Sdn Bhd. PETRONAS filed nine patents in the period
under review, bringing a total of 273 patents
filed to date.
In view of the complex and technically
demanding oil and gas industry, engineering
expertise and technical solutions are essential
for safe and efficient operations. As such,
PETRONAS has developed a group of technical
experts to provide innovative and value-adding
technology solutions as well as institute technical
standards and governance. They will also drive
the technical capability development for effective
implementation of Capital expenditure (CAPEX)
projects towards achieving Plant Operational
Excellence.
PETRONAS ANNUAL REPORT PE 2011 71reimagining energy
» CHEMICAL EOR LABORATORY EVALUATION: POLYMER THERMAL STABILITY OBSERVATION
ENHANCED OIL have been planned for implementation at Surfactant Polymer EOR application
RECOVERY both domestic and foreign oil fields. To in Horizontal Wells. This is in addition
date, 20 fields have been studied under to the existing 2008 PSC extension
Ageing assets and declining the EOR initiative, at different stages of with ExxonMobil Malaysia on the EOR
production have warranted the need maturity. implementation in Guntong and Tapis
for PETRONAS to explore and develop fields, offshore Peninsular Malaysia.
EOR technologies. EOR is an efficient PETRONAS signed a Heads of
recovery mechanism to maximise asset Agreement with PETRONAS Carigali Sdn During the period under review, a total
performance through field life extension Bhd (PCSB) and Shell Malaysia for two of 185 million standard tank barrels
and adding of more reserves. Through 30-year Production Sharing Contracts (mmstb) of oil has been sanctioned
the Exploration & Production Technology to the tune of RM37 billion for EOR as additional reserves from the Angsi,
Centre, PETRONAS intends to highlight projects offshore Sabah and Sarawak, Baram, Bokor and Guntong fields, which
its expertise and enhance its international with PETRONAS expertise working is 2.5 times higher than the targeted
reputation in offshore EOR. alongside their Shell counterparts on amount. The EOR programme is
these projects. EOR technology will be expected to create significant value for
EOR technology programmes developed employed at nine oil fields in the Baram PETRONAS, as a majority of existing oil
by PETRONAS focus on Water Delta, and at four oil fields in the North fields in Malaysia are technically suitable
Alternating Gas (WAG), Enhanced WAG Sabah development area. The success for EOR applications.
(addition of suitable chemical to the WAG of these projects, potentially could lead
system), Thermal EOR, Chemical EOR to the world’s first offshore Alkaline
and cost reduction initiatives, all of which
72 PETRONAS ANNUAL REPORT PE 2011
CO2 MANAGEMENT PETRONAS is also in partnership
PETRONAS is pursuing CO2 with University Teknologi Malaysia
management technology which
(UTM) for the development of
is focused not only on the
advanced membrane technology for
development of high CO2 gas fields,
but also ensures that natural gas is bulk removal of CO2. The developed
proprietary technology has the
produced in a cost-effective manner
potential to improve CO2 and
with minimal environmental impact. hydrocarbon selectivity, allowing for
The CO2 management concentrates better performance and separation
on the entire value chain, from
efficiency. The membrane material
carbon capture to transportation
and process for CO2 removal is
and storage. patented by PETRONAS.
PETRONAS, in collaboration with » MEMBRANE FIBRES
Cameron Process Solutions USA, POTTING FOR
has successfully developed and SCREENING STUDY
tested a new multi-fibre membrane
technology for more efficient and » HYCAPURE HgTM FOR MERCURY
cost-effective removal of CO2 REMOVAL
from natural gas production. Field 15 tonnes of HycaPure HgTM for
trials of this new PN-1 Multi-Fibre mercury removal in gas was
Membrane were performed at the successfully commissioned at PGB
Scurry Area Canyon Reef Operators
(SACROC), testing facility in the
United States, and at CPOC-Muda
platform at the Malaysia-Thailand
Joint Development Area (MTJDA).
This provided valuable data to
validate the technology and prepare
it for commercialisation. The
multi-fibre membrane technology
will be deployed at the JDA-Gas
Balancing Evacuation project at the
PETRONAS Onshore Slug Catcher
in Kertih, Terengganu.
CONTAMINANTS Gas Terminal (OGT) in Kertih by
REMOVAL 2012. Proof-of-concept on mercury
removal from produced water is
PETRONAS made a breakthrough currently in progress.
in collaboration with Queen’s
University of Belfast in Northern PETRONAS also developed a novel
Ireland and Universiti Teknologi process to remove naphthenic acid
PETRONAS, to develop HycaPureTM from crude oil using HycaPureTM.
which is capable of removing The pilot plant will be commissioned
impurities to improve product quality at PETRONAS Penapisan (Melaka)
and refining processes. Sdn Bhd by 2013.
During the period, the first
commercial 15 tonnes of HycaPure
HgTM for mercury removal in gas
was successfully commissioned
at PETRONAS Gas Bhd (PGB). At
the same time, HycaPure HgTM to
remove mercury from condensates
was developed. The pilot plant will
be commissioned at the Oil and
PETRONAS ANNUAL REPORT PE 2011 73reimagining energy
GREEN & SUSTAINABLE
As environmental deterioration and natural
resource depletion is a concern, green and
sustainable initiatives are being pursued by
PETRONAS. This is an important objective
where PETRONAS continues to research,
develop and apply green technologies and
solutions in its operations.
SOLAR
PETRONAS took its first step into renewable
energy with the Suria KLCC Solar Photovoltaic
(PV) Demonstration project, a joint effort
between PETRONAS and Mitsubishi
Corporation Japan. The installation at Suria
KLCC is Malaysia’s single largest PV installation
on a shopping mall rooftop with a capacity
of 685 kilowatt-peak (kWp). It is estimated to
produce 500 megawatt-hours of solar energy
annually, equivalent to 10% of Suria KLCC’s
energy requirement. The electricity produced
could power 200 households, and will contribute
to a greenhouse gas reduction of about 300,000
kg of CO2 per annum.
The PETRONAS Green Station project is another
renewable energy initiative that will install a PV
system at a selected PETRONAS service station
with an estimated peak capacity of 190 kWp.
Detailed engineering work is currently ongoing
and is slated for completion by the end of 2012.
BIOCHEMICAL » THE SURIA KLCC SOLAR PHOTOVOLTAIC (PV) DEMONSTRATION PROJECT
is Malaysia’s single largest photovoltaic installation on a 9,000m2 shopping mall
PETRONAS successfully developed palm- rooftop.
based biopolyols technology for biolubricant
and bio-polyurethane applications. Biopolyols into valuable chemicals and low carbon fuels
are designed to replace petroleum-based using proprietary microbes. As a strategic
polyols, the primary ingredient in making investor, PETRONAS will collaborate with
polyurethane foams a more eco-friendly product. LanzaTech in the up-scaling of CO and CO2
Biolubricants are the preferred choice especially conversion technology as part of continuous
in environmentally sensitive applications, efforts to reduce greenhouse gas emissions
where requirements for biodegradability are from PETRONAS operations.
becoming more important. Pilot trials are
currently being conducted and thus far the
trials have successfully produced biopolyols
for flexible and coating applications such as
adhesive and sealants. Pilot trials on the polyol
esters for lubricant applications showed very
promising results with product quality meeting
specifications.
WASTE GAS CONVERSION
In advancing our technological capabilities and
repertoire, PETRONAS invested in LanzaTech,
a company pursuing the conversion of waste
gases such as Carbon Monoxide (CO) and CO2
74 PETRONAS ANNUAL REPORT PE 2011
PROJECT PETRONAS is leveraging on these TECHNICAL (iPOCS) was established to assess
MANAGEMENT & Greenfield projects to develop SOLUTIONS AND plant performance. The first round of
DELIVERY Front End Engineering Design SERVICES iPOCS assessment for all plants was
(FEED) capabilities and also to completed and efforts are ongoing
PETRONAS continues to pursue deploy PETRONAS’ proprietary Group Technical Solutions (GTS) to close the gaps. The iPOCS
growth in the oil and gas industry technologies and technical was formed in 2006 as the central Assessment Methodology and
through the implementation and solutions. In the period under hub for technical solutions and PETRONAS Technical Standards
delivery of strategic and sound review, PETRONAS technical services for the PETRONAS management are ISO 9001:2008
capital projects. PETRONAS Project personnel successfully completed Group. The focus of this centre of accredited.
Management System employs FEED for some major capital excellence is to ensure PETRONAS
a ‘gated’ approach; ensuring projects across the Group. attains plant operational excellence
project delivery is cost effective by institutionalising technical
and competitive in compliance PETRONAS has adopted category standards and governance, provide
with stringent Health, Safety & management to strategically value-adding technology solutions
Environment (HSE) Standards, source for high value and high and drive technical capability
PETRONAS Technical Standards impact materials and equipment for development. During the period
and other international standards. projects and operational needs to under review, the provision of
meet competitive cost and delivery technical solutions and services
The majority of capital project schedules. For the period under by in-house technical experts
deliveries in PETRONAS such as review, the category management achieved a value creation of about
the Refinery and Petrochemical for equipment and materials has RM1.6 billion for the Group through
Integrated Development (RAPID) contributed to about 15% cost optimisation, yield improvement and
project, Sabah Ammonia and Urea savings. cost avoidance.
(SAMUR) project, PETRONAS
Floating LNG (PFLNG) project Current operations with ageing
and Sabah Oil and Gas Terminal assets are technically challenging
(SOGT) project are centrally and the focus on asset integrity
managed by experienced technical management and process
personnel with project performances optimisation are key factors to
constantly benchmarked against ensure operational excellence. To
international standards. address this, the Integrated Plant
Operations Capability System
» PFLNG
Front End Engineering Design (FEED) for Floating LNG has been completed and it is gearing up
for Engineering, Procurement, Construction, Installation and Commisions (EPCIC) execution.
PETRONAS ANNUAL REPORT PE 2011 75reimagining energy
ASSET INTEGRITY system. During the period under To date, SolidClenzTM has been programme under the TCDP,
MANAGEMENT review, P-RBI™ was successfully applied in 20 wells offshore Sabah established since January 2009,
deployed at 15 upstream offshore and Sarawak with a success rate also enables young engineers to
Both upstream and downstream platforms and several other of 75%. This is equivalent to an oil gain skills and experience in their
operating units have conducted operating units such as Ethylene/ production increase of 800 barrels engineering fields to achieve time-
aggressive Asset Integrity Polyethylene (Malaysia) Sdn Bhd per day for the period under review. to-autonomy of seven to eight years
Management programmes. To (EPEMSB), Malaysia LNG (MLNG) as compared to an average of 10-
address the issue of ageing assets, and PGB. Sand issues also emerged as 12 years previously.
PETRONAS developed its own a key hindrance to production.
methodology and technology PIPEASSURE™ is a novel pipeline Two sand research projects were The development of Technical
products which include Asset Life repair system using composite initiated to develop new tools to Professionals (TPs) and Technical
Studies (P-ALS), Pipeline Integrity materials to strengthen and repair resolve these issues. PETRONAS Trade Specialists (TTSs) remains
Performance Monitoring (PiPeM), leaks. This PETRONAS proprietary is also collaborating with Shell on robust in its implementation with
Process Safety Management (PSM), technology was deployed and sand management for Sarawak a total of 551 TPs and 92 TTSs
PETRONAS Risk-Based Inspection commercialised at risers for Operations. qualified and appointed to date.
(P-RBI™) and PIPEASSURE™. offshore platforms and gas plants.
For downstream production The successful implementation of
P-ALS was developed to study PROCESS and distillation optimisation, the structured capability management
asset integrity and to optimise OPTIMISATION deployment of PETRONAS’ gained recognition from PETRONAS
equipment replacement outlay. Advanced Dispersion Valve Pinnacle operations overseas. Similar
During the period under review, it Following the successful (ADV-P) high performance trays programmes are being adopted
was deployed in four clusters of optimisation efforts of offshore and Vapour Horn device at Melaka by Engen and PCSB Operations
offshore production platforms and platforms since 2009, PETRONAS Refinery (PSR2 Revamp) have in Vietnam, Myanmar and
three downstream sites. developed the Inflow/Outflow resulted in favourable performance. Turkmenistan. In addition, the
Performance Relationship (IPR) The ADV-P trays will also be used Department of Skills Development
In ensuring pipeline integrity for modelling tool that maximises for MLNG and MLNG Dua plant (Ministry of Human Resources)
upstream operations, PiPeM is production via topside operating acid-gas removal columns and for has also adopted one of the TCDP
an online web-based pipeline pressure optimisation. IPR was all distillation columns in the SOGT programmes such as PETRONAS’
management system that monitors successfully implemented at four project. Occupational Skills Standard as
the integrity and health of 7,600 km platforms, which contributed to an the national occupational skills
of oil and gas pipeline infrastructure additional production of 538 barrels TECHNICAL CAPABILITY standard for the oil and gas sector
in Malaysia. per day for the period under review. MANAGEMENT nationwide.
PSM has further strengthened the Clogged wells are a common issue PETRONAS is aggressively
implementation of asset integrity which compromised production. building a pool of competent
management. During the period, PETRONAS’ in-house chemical technical personnel through a
PSM was mainly deployed at formulation such as SolidClenzTM structured Technical Capability
upstream facilities and efforts are was developed to remove organic Development Programme (TCDP)
currently ongoing to close identified and inorganic solid deposits in which was implemented locally. The
gaps. well bores and production tubing. Accelerated Capability Development
P-RBI™, a risk-based inspection IN FOCUS Time to Autonomy (TTA)
management system to determine for Technical Executives
the inspection requirements of The developments of TPs
equipment and facilities for safe and TTSs remain robust in its Number of
operations was also implemented. implementation with a total of Years
P-RBI™ allows extended ‘safe run’ 551 TPs and 92 TTSs qualified 10
between major turnarounds. The and appointed to date
online web-based system has been 9
recognised and adopted by the
Department of Occupational Safety 8
and Health (DOSH) for issuance and
renewal of Certificates of Fitness 7 2010 2011 2012 2013 2014 2015 Year
for DOSH-registered equipment. 2009 Actual TTA Projected TTA of 7 Years
In November 2011, DOSH signed
a Memorandum of Understanding
with PETRONAS for the use of this
76 PETRONAS ANNUAL REPORT PE 2011
OUR PEOPLE
HIGHLIGHTS OVERVIEW
43,266 staff Our People Remain Our Greatest Asset
The Company credits the success of its business
For the period under review, PETRONAS employees to the commitment, dedication and capabilities of
Groupwide increased by 3.9% to 43,266. its people. As PETRONAS continues to expand
its presence across the globe, it is equally
Strengthening committed to create the right work environment
High that matches the capabilities of its employees,
Performance while challenging them to push their performance
Culture boundaries and deliver results.
In our quest to strengthen a high performance For the period under review, through its Human
culture that pervades throughout the organisation, Resource Management Division (HRMD),
we collaborated with top industry players for staff PETRONAS implemented several key initiatives
exchange, internship and scholarship programmes to drive strategic talent management across the
to enable our talents to broaden their knowledge Group.
and experiences in the oil and gas industry.
PETRONAS ANNUAL REPORT PE 2011 77reimagining energy
RECRUITMENT & During the period, PETRONAS
TRAINING actively embarked on various
talent management initiatives to
Business Heads drove talent nurture and develop its workforce.
sourcing at their respective Business To further support its international
Units to enable timely, effective business operations, the Company
and focused recruitment for their enhanced the remuneration
business needs. The Company’s package, in line with global market
competitive Employment Value practices to ensure that it remains
Proposition (EVP) is crucial in competitive globally.
attracting, developing and retaining
talent in support of PETRONAS’ A total of 932 candidates were
business growth strategies. recruited as permanent hires,
comprising 839 Malaysians and 93
international hires during the period.
78 PETRONAS ANNUAL REPORT PE 2011
DEVELOPING OUR As part of the Company’s effort Various talent engagement
PEOPLE to develop potential top talents, programmes were also conducted
the Development Workshop (DW) during the period, such as the
The Company restructured its continues to assess the career Emerging Leaders Programme
People Development Committees potential of these nominated talents. (ELP) and the Bean Bag Circle
(PDCs) at various levels to provide This effort saw an increase of 30% of Conversation. The Bean Bag
greater line ownership and better in the top talent pool by period end. engagement programme, for
talent management. A total of six example, provided a platform for
Executive Committee (EXCO) PDCs, Taking a sustainable approach in top talents to informally interact with
chaired by the President, and over developing future leaders in the Vice Presidents and Executive Vice
40 PDCs, chaired by the respective technical discipline, PETRONAS Presidents on current issues. The
Business Heads, were successfully introduced the Techno-Commercial experience gained seeks to instill a
conducted. The PDCs focused Leaders Development Programme sense of belonging within the talents
essentially on strategic decisions this period. Selected technical and inculcate greater understanding
regarding talent development, talents were nominated to pursue of the expectations and their role in
performance and consequence the comprehensive programme the Company. Both programmes
management, as well as staff that focuses on developing and received notable reviews from the
mobility. cultivating top performing technical participants.
staff in the areas of strategic thinking
Succession Planning remained a and commercial competency. The
high priority to identify potential programme includes an MBA in
leaders for Corporate and Business Finance at Ivy League universities in
Critical Positions. To this end, the the United States.
Company conducted an aggressive
succession planning exercise, which In addition, PETRONAS continues
resulted in an increase in the ratio of to leverage on its relationships
Leaders to the Critical Positions. with its business partners through
strategic collaborations that enable
our top talents to participate in staff
exchange programmes.
PETRONAS ANNUAL REPORT PE 2011 79reimagining energy
ENHANCED HR OPERATING Advanced Self-Service Portal’ (myPASSPORT). Our Group Learning Institutions will focus on their
MODEL HR SSC will perform and execute ‘transactional’ niche areas to support their respective aspirations.
HR activities and address basic HR queries, They are:
In shaping a new way of managing the issues, and concerns to manage HR services, 1. PETRONAS Leadership Centre (PLC)
Company’s human resources, PETRONAS applications, processes, and people. On the
rolled out several key initiatives to improve the other hand, myPASSPORT, will act as a self- - The Leadership Centre That Transforms
efficiency and effectiveness of managing its service portal for all employees, providing a single Leaders
workforce. The implementation of the Enhanced platform for them to manage individual HR related
HR Operating Model, rolled out in the previous matters. Additionally, this integrated platform 2. Institut Teknologi Petroleum PETRONAS
year, had progressively shifted HR’s role, from is equipped with a Manager Self-Service tool (INSTEP)
transactions and administration to strategy allowing managers to efficiently and effectively - A Centre of Technical Excellence
formulation. This enables HR Professionals to be manage their workforce.
more business-focused, as well as enabling them 3. Universiti Teknologi PETRONAS (UTP)
to develop HR solutions and capabilities that will EDUCATION & - An Internationally Recognised Research
support the business in achieving their goals. SPONSORSHIP University
In the period under review, the technological and The Company recognises the value of education 4. Akademi Laut Malaysia (ALAM)
administrative infrastructure of Project Sapphire, and capability development to ensure long-term - A Centre of Excellence for Maritime
a key component of the Enhanced HR Operating growth and sustainability of the workforce. Education and Training
Model was undertaken. Project Sapphire is an
innovative global integrated system, which will PETRONAS continued with its Education
allow efficient and seamless data reconciliation, Transformation initiative in line with its aspiration
ensuring superior management in global talent to become a ‘Regional Education and Learning
sourcing and sophisticated management of a Hub for the Oil & Gas Industry’. The Education
global workforce. Transformation focuses on three key dimensions,
namely, industry engagements, academic
Project Sapphire also introduced the HR Shared positioning, and Research & Development (R&D)
Services Centre (HR SSC) and ‘my PETRONAS stewardship.
80 PETRONAS ANNUAL REPORT PE 2011 INSTITUT TEKNOLOGI
PETROLEUM PETRONAS
PETRONAS LEADERSHIP (INSTEP)
CENTRE (PLC)
PETRONAS Technical Training Sdn
The PLC was launched in line with Bhd (PTTSB), the holding company
its aspiration to become a regional of INSTEP, signed a Memorandum
leadership learning hub. Formerly of Understanding with SIRIM QAS
known as PETRONAS Management International Sdn Bhd to institute a
Training Centre (PERMATA), the ‘Scheme for Certification of Competent
leadership centre offers integrated Personnel for Explosive Atmosphere’
learning solutions and consultancy at INSTEP. The scheme is the first
services to both PETRONAS Group of its kind in Asia, and is envisaged
and industry players in Malaysia and to be led by Malaysia in accordance
abroad. with the International Electrotechnical
PLC aims to be a Leadership Commission for Explosion Proof (IECEx)
Centre dedicated to advancing the standards.
strategic insights, knowledge and
experiences of leaders to enable PETRONAS also launched the Kimanis
them to transform these values into Petroleum Training Centre (KTC) project
real action for superior business in Sabah, which will be operated by
performance and growth. Its core INSTEP upon its completion in 2013.
divisions are Advanced Leadership INSTEP continues to engage with
Development, Core Leadership industry players to explore collaboration
Development and Learning opportunities in technical training
Consultancy. A total of 11,437 and capability development. For this
employees from the PETRONAS period, INSTEP produced a total of
Group and its affiliates attended 414 graduates from its campus in Batu
the various leadership development Rakit, Terengganu, Malaysia.
programmes organised throughout
the period.
PETRONAS ANNUAL REPORT PE 2011 81reimagining energy
UNIVERSITI TEKNOLOGI 2. Finalisation of the MBA AKADEMI LAUT optimisation project for Malaysia
PETRONAS (UTP) programme in Energy MALAYSIA (ALAM) Marine and Heavy Engineering
Management with PLC and (MMHE). ALAM acquired 26 new
UTP is on track in its bid to achieve international institutions, as ALAM is among the top 10% of customers for both its academic and
Research University (RU) status by learning partners. the world’s Maritime Education consultancy services, demonstrating
2013. The RU status is granted by and Training institutions with world its calibre and capabilities towards
the Malaysian Ministry of Higher Several other industry collaborations class infrastructure and training realising its vision as a centre of
Education and it paves the way for were also established for Research standards; validated through excellence in maritime education
funding and grants for research, & Developement (R&D), student/ the Det Norske Veritas’s annual and training.
development and commercialisation staff exchange, internships and benchmarking exercise.
activities. UTP offers undergraduate sponsorships for undergraduate and ALAM also collaborated with
and postgraduate courses related to postgraduate students. In the period under review, government agencies namely
the oil and gas industry. ALAM enhanced its course Majlis Amanah Rakyat (MARA), the
syllabus to meet the new training Federal Land Development Authority
For the period under review, UTP A total of 1,333 students graduated, requirements as stipulated in the (FELDA) and the Public Services
added the following to its learning out of which 444 graduates (33.3%) Manila Amendment on ‘Standards Department (JPA) in sponsoring
offerings: were immediately absorbed into of Training Certification & a total of 109 cadets to study at
1. Establishment of a Geosciences the PETRONAS workforce. The Watchkeeping’ (STCW). ALAM.
remaining 889 (66.7%) graduates
& Petroleum Engineering were employed across various ALAM also became the official Collaboration and partnership with
Faculty, consisting of the industries in the country. training provider for the Offshore key industry players remain a priority
Department of Geosciences and Petroleum Industry Training in ALAM’s strategic growth agenda.
the Department of Petroleum Organisation (OPITO). Additionally, In the period under review, three
Engineering. ALAM provides both training and Memorandums of Understanding
consultancy services in supporting were signed with Nantong Shipping
projects that include PETRONAS’ College (China), Jefri Bolkiah College
Regasification Terminal Project in of Engineering (Brunei) and FELDA.
Melaka, as well as the ATB/Vitol
Tanjung Bin Oil Terminal and yard
PETRONAS SCHOLARSHIP PROGRAMME
PETRONAS believes that investing in education and human capital
development today will ensure availability of a sustainable pool of
motivated and knowledge-empowered talent for PETRONAS, our
partners, our host nations and local communities.
PETRONAS sponsored 257 students to institutions of higher learning. A
total of 99 scholarships were awarded for international universities and
158 scholarships for local universities in various disciplines relevant to
PETRONAS’ business needs.
A total of 469 PETRONAS scholars graduated during this period, with
238 (50.7%) recruited by PETRONAS and 231 (49.3%) employed by top
industry players across the nation.
82 PETRONAS ANNUAL REPORT PE 2011
HEALTH, SAFETY
& ENVIRONMENT
HIGHLIGHTS OVERVIEW
HSE Governance Committed to being a responsible corporate
and Risk citizen, PETRONAS continues to reinforce its
Management HSE management at all levels. For the period
in review, the Company set up the PETRONAS
Rolled out Health, Safety & Environment (HSE) HSE Executive Council which serves as a
Mandatory Control Framework (MCF) and platform to set targets, review and recommend
established best practices for Mercury and industry-driven strategies or initiatives across the
Asbestos Management Group. The Council also reviews existing HSE
performance, measures the effectiveness of the
Process Safety Company’s annual HSE strategy and makes
Leadership recommendations. In addition, the PETRONAS
HSE Technical Council was established to
Cascaded Process Safety Leadership (PSL) strengthen HSE leadership, mindset and culture.
programme to management and personnel Collectively, these initiatives will elevate HSE
Groupwide technical standards based on industry best
practices across the Group.
18% Decrease
The Company also completed a Corporate
The Group’s Lost Time Injury Frequency (LTIF) Sustainability Study to embed sustainable
decreased by 18% development in the business. PETRONAS’
Corporate Sustainability Council (CSC), which
24.9 million mmBtu was formed in 2010, comprises Heads and
Vice Presidents of businesses and corporate
Energy savings in our domestic Downstream and functions. Chaired by the Company’s Executive
Gas & Power operations Vice President for Exploration and Production
Business, the CSC continued to drive
sustainability across PETRONAS in the period
under review by providing strategic direction for
Corporate Sustainability implementation.
PETRONAS ANNUAL REPORT PE 2011 83reimagining energy
SAFETY Fatal Accident Rate
Reportable Fatalities per 100 million
PERFORMANCE man hours
Throughout the review period, 5.72
six fatalities were reported. Three
contractors lost lives in a single 3.75
aviation incident and another three 3.36
in project construction activities.
2.86
A reduction trend was observed for 2.58
the Group’s LTIF, which decreased
by 18% from 0.39 during the 08 09 10 11 PE11
Financial Year 2011 to 0.32 in the
period under review. On the other LTIF and TRCF for the Group
hand, the Group’s Total Reportable No. of cases per one million man
Case Frequency (TRCF) rose to hours
1.00 in the period under review
compared to 0.81 in the previous
year, attributed to improved
reporting.
0.88
0.88
0.78
0.81
1.00
0.35
0.44
0.31
0.39
0.32
08 09 10 11 PE11
LTIF TRCF
84 PETRONAS ANNUAL REPORT PE 2011
HSE MANDATORY CONTROL FORTIFYING HSE & SUSTAINABLE
FRAMEWORK (MCF) DEVELOPMENT (SD) LEADERSHIP,
CULTURE AND MINDSET
PETRONAS developed and rolled out its HSE
MCF to strengthen the Group’s HSE governance Among our key focus for the last two years was
and compliance. The HSE MCF sets mandatory
requirements with clearly identified accountabilities establishing and inculcating strong PSL and
covering monitoring, supervision and assessment
for implementation across the Group. practices in PETRONAS. Various PSL workshops
The HSE MCF’s high level integrated framework were held with participation from our senior leaders.
covers 10 key risk areas for the Group, in
particular, technical and operational integrity of The leaders made personal pledges towards
facilities and equipment.
bringing effective changes in their businesses and
workplaces. Similar workshops were rolled out
to Operating Units (OPUs) piloted by PETRONAS
Penapisan (Melaka) Sdn Bhd (PP(M)SB).
The Company is confident that consistent and
disciplined implementation of the HSE MCF will
strengthen HSE risk management and governance
as well as reinforce HSE mindset throughout the
organisation.
» Communication is an effective means to cultivate safety culture.
PETRONAS ANNUAL REPORT PE 2011 85reimagining energy
» THE GUIDELINES ON MERCURY
MANAGEMENT IN OIL AND GAS
INDUSTRY
The guideline was published in
September 2011 and provides
information and recommendations
on how to manage mercury in the
oil and gas industry
HSE RISK MANAGEMENT importance and the requirements HEALTH NATIONAL MERCURY
of Permit to Work. As the response MANAGEMENT
Group HSE Risk Profiling was to both learning aids have been At PETRONAS we are committed to GUIDELINES FOR THE
developed in July 2011 and positive, more educational tools support our employees in reducing OIL & GAS INDUSTRY
incorporated into the current Group will be developed to elevate safety health risks and maintaining good
Enterprise Risk Management. This awareness. physical and mental health through PETRONAS was benchmarked
was rolled out and adopted by the implementation of workplace for its Mercury Management
OPUs in August 2011. In line with In line with our strategy to health programmes. Guidelines (PHgMG) to effectively
our strategy to strengthen HSE risk strengthen HSE regulation, the manage mercury issues. The
management, HSE Tier 3 assurance PETRONAS HSE Executive Council With this in mind, several measures Group was tasked by the
schedules were developed based consisting of PETRONAS senior have been institutionalised to Department of Occupational
on OPU’s Risk Profiles. management from respective improve workplace conditions and Safety and Health (DOSH) to lead
businesses was established during minimise risk at work. the development of the National
With the aim to further improve the period. The Council approved Mercury Management Guidelines
safety awareness and performance, the HSE MCF at its first bi-annual Leveraging on our good practices, for the oil and gas industry.
an interactive online courseware, meeting in November 2011. PETRONAS has been tasked to
iZeTo, and two animation videos lead the development of a national The guideline was published
were developed. Comprising guideline for the oil and gas industry. in September 2011 and
11 modules, iZeTo features the provides information and
animated Lat cartoon characters, recommendations on how to
Tuah and ZeTo, and includes an manage mercury in the oil and
interactive quiz to assess the users’ gas industry in accordance
knowledge and understanding of with the Occupational Safety
the rules. The two PETRONAS and Health (Use and Standards
ZeTo Rules Animation Video of Exposure of Chemicals
showcase the ZeTo rules and its Hazardous to Health) Regulations
2000.
86 PETRONAS ANNUAL REPORT PE 2011
» ETHYLENE/POLYETHYLENE
MALAYSIA SDN BHD
Staff monitoring personal mercury
exposure during gas compressor
cleaning activity
HEALTH RISK ASSESSMENT (HRA) ENVIRONMENT
HRA was rolled out Groupwide, with 85% completion in In our continuous effort to operate in an environmentally-
domestic operations. To ensure successful implementations responsible manner, PETRONAS has developed a product
of HRA, efforts were taken including the development of carbon footprint during the period under review, based on
a Health Risk Profiling methodology. In Malaysia, a series established guidelines. There were also various engagement
of PETRONAS–DOSH engagement sessions were held sessions on oil spill response and preparedness to ensure
after PETRONAS obtained approval from the Director that our operations are governed by industry best practices.
General (DG) of DOSH for PETRONAS HRA methodology
in conducting both DOSH’s Chemical HRA (CHRA) and PRODUCT CARBON FOOTPRINT
HRA. For international operations, HRA workshops were DEVELOPMENT
organised with our Downstream Business, particularly in
Italy, Spain and Belgium. PETRONAS developed and compiled preliminary product
carbon footprint data for key products namely, composite
ASBESTOS MANAGEMENT INTERVENTION crude oil, natural gas, methyl tertiary butyl ether (MTBE)
PROGRAMME (AMIP) and propylene. The creation of the product carbon footprint
was based on the Company’s internally developed Life
PETRONAS established the AMIP in 2011. The programme Cycle Inventory guideline with special regards to carbon
aims to assist OPUs and joint ventures in asbestos footprint accounting. These guidelines provide step-by-
identification, risk assessment and prioritisation in addition step assistance in establishing the carbon footprint of the
to removal work. product processed, manufactured and distributed by the
Group.
The Company also issued a directive to ban any
introduction of asbestos to the businesses, at the end of OIL SPILL RESPONSE AND
2010, with the aim to achieve an asbestos-free workplace PREPAREDNESS
within five years. An ‘Asbestos Ban’ statement was included
in all procurement documents and incorporated into PETRONAS headed the Production Sharing Contracts’
PETRONAS’ Technical Standards. A series of workshops (PSCs) Oil Spill Response Task Force in Malaysia. The task
were also held with OPUs apart from presenting the force plays a key role in streamlining technical, procedural
requirements to the Plant Engineering Panel and during the and regulatory aspects in oil spill response.
HSE Managers’ Meeting.
PETRONAS ANNUAL REPORT PE 2011 87reimagining energy
CUMULATIVE ENERGY GREENHOUSE GAS (GHG) PRODUCT STEWARDSHIP
SAVINGS IN DOMESTIC EMISSIONS
DOWNSTREAM AND GAS PETRONAS continued to fortify its
& POWER OPERATIONS To effectively manage operational product stewardship practices to
minimise potential HSE impacts
PETRONAS OPUs continued to carbon footprint, ongoing efforts are across the product value chain. A
Product Stewardship Framework
achieve energy savings resulting being made to assess performance was developed and is currently
being implemented by PETRONAS
in lower resource consumption in and strengthen processes across Chemicals Group’s (PCG) value
chain.
the review period. These savings businesses. In the period under
were realised through long-term review, total GHG emissions for
initiatives such as Strategic Energy PETRONAS’ operations in Malaysia
Review (SER) and Energy Loss was 40.42 million tonnes of CO2
equivalent.
Management (ELM). In the period
under review, PETRONAS achieved
savings of 2.7 million mmBtu in our
domestic Downstream and Gas
& Power operations, bringing the
cumulative energy savings total to
24.9 million mmBtu since Financial
Year 2007.
» MALAYSIA LNG (MLNG)
SER was carried out at MLNG, contributing to the cumulative energy savings
88 PETRONAS ANNUAL REPORT PE 2011
AWARDS &
RECOGNITIONS
PETRONAS Group was recognised for its
accomplishments and continuous pursuit of
excellence with numerous awards and recognitions
received in 2011.
Royal Society for Malaysian Society for
the Prevention of Occupational Safety
Accidents (RoSPA) and Health (MSOSH)
Awards Awards
One of the top awards in the health and safety The annual MSOSH Awards recognise companies in
calendar, the annual RoSPA Awards offer organisations Malaysia that demonstrate outstanding occupational safety
a prime opportunity to prove their ongoing commitment and health performance.
to raising health and safety standards. Among the
longest running and highly respected occupational Grand Award
safety award programmes today, the awards
recognise excellence in work-related health and safety • MTBE/Polypropylene Malaysia Sdn Bhd
performance by private and public sector organisations. • PETRONAS Fertilizer (Kedah) Sdn Bhd
• PETRONAS Gas Berhad – Centralised Utility Facilities
Sector Awards
(CUF), Gebeng
Oil and Gas Sector Award • PETRONAS Gas Berhad – Segamat Regional
• PETRONAS Penapisan (Melaka) Sdn Bhd Operations Office
• PETRONAS Gas Berhad – Gas Processing Plant
Gold Award
Complex B
• PETRONAS Ammonia Sdn Bhd
Gold Merit Award
Silver Award
• PETRONAS Ammonia Sdn Bhd
• PETRONAS Fertilizer (Kedah) Sdn Bhd • PETRONAS Methanol (Labuan) Sdn Bhd
• PETRONAS Penapisan (Melaka) Sdn Bhd
• PETRONAS Gas Berhad – Centralised Utility Facilities
(CUF), Kertih
• PETRONAS Gas Berhad – Export Terminal
PETRONAS ANNUAL REPORT PE 2011 89reimagining energy
Gold (Class I) Distribution
• PETRONAS Carigali Sdn Bhd – Sabah Gas Terminal • Ethylene/Polyethylene Malaysia Sdn Bhd
• PETRONAS Gas Berhad – Gas Processing Plant
Employee Health and Safety
Complex A
• PETRONAS Penapisan (Melaka) Sdn Bhd
Gold (Class II)
Silver Award
• PETRONAS Carigali Sdn Bhd – Labuan Gas Terminal
• PETRONAS Gas Berhad – Pasir Gudang Regional Distribution
Operations Office • OPTIMAL Chemicals (Malaysia) Sdn Bhd
Chemical Industries Employee Health and Safety
Council of Malaysia
(CICM) Responsible • Ethylene/Polyethylene Malaysia Sdn Bhd
Care Awards 2010
Community Awareness & Emergency
CICM is the governing body representing the various sub-sector Response
chemical groups ranging from oleochemicals, paints, fertilisers,
petrochemicals, agriculture chemicals, industrial gases, coating • PETRONAS Fertilizer (Kedah) Sdn Bhd
resins and biodiesel sectors. The CICM Responsible Care Awards,
introduced in 2001, recognise organisations that have made Pollution Prevention Code
the most significant and measurable progress in implementing
Responsible Care’s Six Codes of Management Practices in • BASF PETRONAS Chemicals Sdn Bhd
Malaysia. The Codes encompass Distribution, Process Safety,
Pollution Prevention, Product Stewardship, Community Awareness Process Safety
& Emergency Response as well as Employee Health & Safety.
• BASF PETRONAS Chemicals Sdn Bhd
Category – Petrochemicals
Gold Award Product Stewardship
Product Stewardship • BASF PETRONAS Chemicals Sdn Bhd
• MTBE/Polypropylene Malaysia Sdn Bhd Merit Award
• Ethylene/Polyethylene Malaysia Sdn Bhd
Community Awareness & Emergency
Community Awareness & Emergency Response Response
• MTBE/Polypropylene Malaysia Sdn Bhd • PETRONAS Ammonia Sdn Bhd
• OPTIMAL Chemicals (Malaysia) Sdn Bhd
Process Safety • Ethylene/Polyethylene Malaysia Sdn Bhd
• PETRONAS Penapisan (Melaka) Sdn Bhd
• OPTIMAL Chemicals (Malaysia) Sdn Bhd • Petlin (Malaysia) Sdn Bhd
• Ethylene/Polyethylene Malaysia Sdn Bhd
Pollution Prevention
• PETRONAS Ammonia Sdn Bhd
• Aromatics Malaysia Sdn Bhd
• MTBE/Polypropylene Malaysia Sdn Bhd
• Petlin (Malaysia) Sdn Bhd
• OPTIMAL Chemicals (Malaysia) Sdn Bhd
• Ethylene/Polyethylene Malaysia Sdn Bhd
• PETRONAS Fertilizer (Kedah) Sdn Bhd
• PETRONAS Penapisan (Terengganu) Sdn Bhd
90 PETRONAS ANNUAL REPORT PE 2011 National Council for
Occupational Safety
Process Safety and Health (NCOSH)
Excellence Award
• PETRONAS Ammonia Sdn Bhd
• Aromatics Malaysia Sdn Bhd The Award is an initiative by the NCOSH, Ministry of Human
• MTBE/Polypropylene Malaysia Sdn Bhd Resources to give recognition to organisations, employers
• Petlin (Malaysia) Sdn Bhd and employees in various sectors in the industry that achieved
• PETRONAS Fertilizer (Kedah) Sdn Bhd excellence in managing safety and health systems in their
• PETRONAS Penapisan (Melaka) Sdn Bhd workplace.
• PETRONAS Penapisan (Terengganu) Sdn Bhd
Category - Petroleum/Gas/Chemicals
Employee Health & Safety
• PETRONAS Ammonia Sdn Bhd
• Aromatics Malaysia Sdn Bhd
• MTBE/Polypropylene Malaysia Sdn Bhd Category - Power Facility
• Petlin (Malaysia) Sdn Bhd
• OPTIMAL Chemicals (Malaysia) Sdn Bhd • PETRONAS Gas Berhad – Centralised Utility Facilities (CUF),
• BASF PETRONAS Chemicals Sdn Bhd Gebeng
• PETRONAS Ammonia Sdn Bhd
• PETRONAS Penapisan (Terengganu) Sdn Bhd Category - Gas Facility
• PETRONAS Fertilizer (Kedah) Sdn Bhd
• PETRONAS Gas Berhad – Negeri Sembilan
Product Stewardship
Category - Property
• Petlin (Malaysia) Sdn Bhd
• PETRONAS Penapisan (Melaka) Sdn Bhd • KLCC Urusharta Sdn Bhd (PETRONAS Twin Towers)
Distribution
• Petlin (Malaysia) Sdn Bhd
PETRONAS ANNUAL REPORT PE 2011 91reimagining energy
Prime Minister’s Malaysian
Hibiscus Award Occupational
Safety and Health
The Prime Minister’s Hibiscus Award is the premier private sector Professionals’
environmental award for businesses and industries in Malaysia. Association
The Award is jointly organised by four of Malaysia’s leading (MOSHPA) Awards
private sector non-profit organisations concerned with corporate
environmental management and performance, namely Business The MOSHPA Awards recognise the outstanding achievements
Council for Sustainability and Responsibility Malaysia (BCSRM), of companies in the field of Occupational Safety and Health in
Environmental Management & Research Association of Malaysia improving safety at the workplace. The awards encourage the
(ENSEARCH), Federation of Malaysian Manufacturers (FMM) and implementation and improvement of strategies in managing
Malaysian International Chamber of Commerce & Industry (MICCI). Occupational Safety and Health.
Exceptional Achievement in Occupational Safety
Environmental Performance and Health Award for
Project Management and
• PETRONAS Carigali Sdn Bhd - Onshore Gas Terminal Consultancy
Notable Achievement in • KLCC Projeks Sdn Bhd
Environmental Performance
• Aromatics Malaysia Sdn Bhd
• MTBE/Polypropylene Malaysia Sdn Bhd
• Petlin (Malaysia) Sdn Bhd
• PETRONAS Carigali Sdn Bhd - Onshore Gas Terminal
• PETRONAS Penapisan (Melaka) Sdn Bhd
• PETRONAS Penapisan (Terengganu) Sdn Bhd
Melaka State Award
• PETRONAS Penapisan (Melaka) Sdn Bhd
Terengganu State Award
• PETRONAS Carigali Sdn Bhd - Onshore Gas Terminal
Challenge Trophy
• PETRONAS Carigali Sdn Bhd - Onshore Gas Terminal
92 PETRONAS ANNUAL REPORT PE 2011
Turnaround and Kancil Awards 2011
Project (TANP) 2011
Recognition The Kancil Awards recognise home-grown Malaysian creative
excellence in endorsing the highest standards of creativity in
PETRONAS Penapisan (Terengganu) Sdn Bhd successfully advertising. The winning advertisements were produced by Leo
recorded the biggest turnaround exercise in history (more than Burnett Advertising Sdn Bhd.
700,000 safe manhours) without any major incidents, in addition
to completing it ahead of schedule while registering a final Silver Kancil
budget of 13% below the initial cost.
Cinematography
Solomon
Benchmarking Result • PETRONAS Hari Raya/Merdeka 2011 advertisement
entitled ‘Hands’
Recognition
Bronze Kancil
For 2010 Solomon Benchmarking, both PETRONAS Penapisan
(Melaka) Sdn Bhd and Malaysian Refining Company Sdn Bhd Film (Single)
achieved top quartile performance in TCOE & Mechanical
Availability. Both plants also achieved better rating for Enegy • PETRONAS Chinese New Year 2011 advertisement
Intensity Index, Maintenance Index and Personnel Index compared entitled ‘Their Hope’
to their 2008 results.
• PETRONAS Motorsports Formula One
advertisement entitled ‘F1 for Everyone’
• PETRONAS Deepavali 2010 advertisement entitled
‘Giant’
Film (Direction)
• PETRONAS Motorsports Formula One
advertisement entitled ‘F1 for Everyone’
Film (Editing)
• PETRONAS Motorsports Formula One
advertisement entitled ‘F1 for Everyone’
Cinematography
• PETRONAS Motorsports Formula One
advertisement entitled ‘F1 for Everyone’
PETRONAS ANNUAL REPORT PE 2011 93reimagining energy
Merit Kancil
Film (Single)
• PETRONAS Hari Raya/Merdeka 2011
advertisement entitled ‘Hands’
• PETRONAS Motorsports Formula One
advertisement entitled ‘F1 Carwash’
Film (Campaign)
• PETRONAS Motorsports Formula One
advertisement entitled ‘F1 for Everyone’
Copywriting
• PETRONAS Hari Raya/Merdeka 2011
advertisement entitled ‘Hands’
• PETRONAS Deepavali 2010 advertisement
entitled ‘Giant’
Film (Direction)
• PETRONAS Deepavali 2010 advertisement
entitled ‘Giant’
Film (Editing)
• PETRONAS Hari Raya/Merdeka 2011
advertisement entitled ‘Hands’
94 PETRONAS ANNUAL REPORT PE 2011
CORPORATE
SOCIAL
RESPONSIBILITY
HIGHLIGHTS COMMUNITY
10% PETRONAS is committed to making a positive,
meaningful and long-term difference to the
Increase in the number of borderline students lives and communities where it operates. By
scoring at least 1A in their Ujian Penilaian Sekolah providing the opportunity and means to benefit
Rendah (UPSR) exams as a result of Program Bakti the people, community and nation, its long-
Pendidikan PETRONAS term engagement programmes are carried out
in partnerships with relevant stakeholders that
Promoting include local communities, industries, government
Biodiversity and Non-Governmental Organisations (NGO).
Adopting a more dynamic and creative approach
Launch of partnership with Yayasan Sabah pledging by embodying the spirit of ‘reimagining energyTM’
support for the Imbak Canyon Conservation Area in touching the hearts of many, PETRONAS is
committed to business sustainability in developing
natural resources responsibly via a holistic
approach in its Corporate Social Responsibility
initiatives.
This underscores the importance of how
we believe the business community should
contribute, not just through philanthropy, but to
act in a way a company should in a community,
by building trust and becoming ‘a partner of
choice’.
PETRONAS ANNUAL REPORT PE 2011 95reimagining energy
Our investments in a broad range of community- » PROGRAM BAKTI
based programmes, both at home and abroad PENDIDIKAN
include: PETRONAS (PBPP)
PBPP reached out to
PROGRAM BAKTI over 3,000 Year 4 to
PENDIDIKAN PETRONAS Year 6 students in 2011
(PBPP)
Introduced in 2002 in partnership with schools
nationwide, this outreach programme aims to
build a strong academic foundation for borderline
students from underprivileged families in the
communities where PETRONAS operates.
In support of the Government’s efforts to improve
the level of academic achievement in English,
Mathematics and Science among students, the
programme focuses on teaching these subjects
through weekly academic and non-academic
activities conducted by full-time teachers and
PETRONAS staff facilitators.
In the period under review, 42 schools
participated in this programme. Over 1,000
academic and fun learning sessions were held in
schools nationwide, benefiting over 3,000 Year 4
to Year 6 students.
The programme saw the participation of over 700
PETRONAS staff facilitators. There was a 10%
increase in the number of students who achieved
at least 1A in their UPSR examinations compared
to the corresponding period.
In addition, one of the PBPP schools achieved
best school status as seven out of the 12
borderline students achieved 5As in the UPSR
exams, helping to elevate the position of the
school.
96 PETRONAS ANNUAL REPORT PE 2011
NATIONAL PROGRAM
CONSUMER DAY PENCEGAHAN
DADAH PETRONAS
In support of the Federation of (SAHABAT PPDa)
Malaysian Consumers Association’s
(FOMCA) efforts to educate and While the Group works closely with
raise consumer awareness about parents through KAK, Sahabat
smart and sustainable consumerism, PPDa PETRONAS aims to raise
PETRONAS contributed RM100,000 awareness of substance abuse
towards National Consumer Day among students and teachers.
activities.
Sahabat PPDa PETRONAS
PROGRAM KENALI continues to be Malaysia’s
ANAK KITA (KAK) Ministry of Education’s (MOE) sole
nationwide drug awareness and
In partnership with PENGASIH, prevention programme. In this
a NGO and self-help group period, seminars and workshops
affiliated with the World Federation held under this programme were
of Therapeutic Communities, organised in collaboration with MOE.
PETRONAS organised a series of
seminars and workshops involving The programme reached out to
about 4,600 parents. more than 10,000 students and
teachers who play the role of
The programme helped raise change agents for drug awareness
awareness on the dangers of in their respective schools.
substance abuse and equipped
parents with the knowledge to
prevent substance abuse among
their children while promoting a
healthy lifestyle.
PETRONAS launched this PROGRAM PETRONAS also conducted
programme in 2009 to support the SENTUHAN awareness programmes for the
Government’s efforts to combat HARAPAN recipients on financial literacy,
substance abuse. PETRONAS health management and youth
development to help these families
Launched in 2010, the Sentuhan transform their lives for the better.
Harapan Programme (A Touch of These supplementary programmes
Hope) is a community outreach were conducted in collaboration
initiative by PETRONAS in with the National Population and
collaboration with MyKasih Family Development Board.
Foundation, a non-profit
organisation. The programme
provides food aid to eligible
underprivileged families through
designated PETRONAS service
station convenience stores (Kedai
Mesra).
In 2011, PETRONAS contributed
RM2 million in food aid to about
5,000 families in 10 states namely
Johor, Kedah, Kelantan, Melaka,
Pahang, Perak, Sabah, Sarawak,
Selangor and Terengganu.
PETRONAS ANNUAL REPORT PE 2011 97reimagining energy
» IMBAK CANYON CONSERVATION
AREA, SABAH
The Imbak Canyon’s rainforest acts
as a wildlife corridor linking the
Danum Valley and Maliau Basin
PROGRAM main values embodied in the twin
SENTUHAN KASIH festivities of Hari Raya Aidilfitri and
PETRONAS Hari Merdeka.
In conjunction with the annual PETRONAS harnessed the IMBAK CANYON collaborations to increase the
Hari Raya, Chinese New Year, popularity of social media platforms CONSERVATION awareness on Imbak Canyon
Deepavali, Hari Gawai and Tadau to launch the ‘Saya Suka Malaysia AREA as well as to educate the public
Ka’amatan celebrations in 2011, Contest’ held in conjunction with and the communities living in
PETRONAS hosted a series of Malaysia’s Independence Day and In June 2011, PETRONAS the surrounding areas on how to
gatherings for underprivileged reached out to over one million launched its partnership preserve and protect this natural
children from orphanages and page views. The exposure also with Yayasan Sabah (Sabah treasure.
shelter homes in and around its boosted PETRONAS’ Facebook Foundation) and pledged RM6
areas of operations. During the page with 30,000 new fans and million to support the Imbak Imbak Canyon serves as a wildlife
period, between 300 and 500 reached over 7.5 million Malaysians Canyon Conservation Area, a corridor linking Danum Valley and
staff volunteered to engage with through the Internet. region of unexplored rainforest Maliau Basin, which falls under the
more than 1,000 children who with a potential for new scientific purview of Yayasan Sabah. Imbak
participated in these programmes. As a powerful engagement discoveries due to its rich Canyon is expected to play a key
platform, the initiative was biodiversity. The contribution will role in future forest rehabilitation,
REACHING OUT consistent with the Group’s spirit of be used to establish the Imbak while promoting greater interest
THROUGH MEDIA reimagining energy™, which is to Canyon Study Centre which will in environmental education and
do things differently in reimagining manage the area and conduct nature tourism for Sabah and
As testimony to PETRONAS’ our engagements with key various activities including research, Malaysia in general.
commitment to reach out to stakeholders to communicate what environmental education and
the community, its Hari Raya/ PETRONAS represents. outreach programmes. Together,
Merdeka, Chinese New Year and PETRONAS and Yayasan Sabah
Deepavali 2011 advertisements aim to develop long-term research
were accorded recognition in the
prestigious Kancil Awards in 2011.
Notable among the achievements
was the ‘Hands’ television
advertisement conveyed through a
visual poetry concept, showcasing
a metaphor of togetherness and
forgiveness. These were the
98 PETRONAS ANNUAL REPORT PE 2011
MERDEKA AWARD the ecological design and planning » RECIPIENTS OF THE MERDEKA AWARD WITH
of the built environment; Professor THE PATRON AND FOUNDING MEMBERS
The Merdeka Award was Dato’ Dr Goh Khean Lee for The Merdeka Award is presented annually
established in 2007 by PETRONAS, his outstanding contribution to Malaysians as well as non-Malaysians for
ExxonMobil and Shell as a symbol in elevating the study and their outstanding achievements and lasting
of the oil and gas industry’s practice of gastroenterology and contributions to the nation
contribution to Malaysia’s enduring hepatology in Malaysia to global
legacy and to celebrate half-a- standards; and Professor Dr Mak PETRONAS The ECCD was established in
century of our growth and progress Joon Wah for his outstanding continues to actively 1997 in collaboration with village
as an independent nation. fundamental and applied research contribute to committees and has nurtured more
in parasitology and parasitic community projects than 10,000 children living in 37
Each year, the Award is presented diseases, public health and abroad through villages around the pipeline corridor.
for outstanding achievements in five pathology. our international
categories: operations. During the period, PETRONAS
1. Education and Community also collaborated with a private
2. Environment MYANMAR vocational training centre to
3. Health, Science and Technology provide skills and build confidence
4. Outstanding Scholastic In Myanmar, PETRONAS continued among the youth living in the
to manage its socio-economic pipeline area to prepare them for
Achievement and humanitarian projects under better employment and career
5. Outstanding Contribution to the the Yetagun Socio-Economic opportunities. So far, 107 have
Development Programme. During graduated and found employment
People of Malaysia. the period, under the Early or have started their own
Childhood Care & Development businesses.
These categories represent (ECCD) Programme, 70% of the
key areas which are critical to children passed their matriculation TURKMENISTAN
Malaysia’s continuous growth and examinations.Through direct
development. These categories involvement with the communities, As one of PETRONAS’ key
also portray the development PETRONAS continuously improved strategies in developing human
areas supported by the Founding this programme. capital in the country, PETRONAS
Members through their various continued to provide training and
Corporate Social Responsibility education opportunities to Turkmen
initiatives in this country. nationals in 2011.
This year, the award was conferred
to Dato’ Dr Kenneth Yeang for his
outstanding contribution to the
development of design methods for
PETRONAS ANNUAL REPORT PE 2011 99reimagining energy
The fourth Universiti Teknologi in 1998 for degree programmes at skill-based initiatives will be able to
PETRONAS (UTP) mini Convocation UTP to eligible Turkmen students. provide a degree of independence
Ceremony for Turkmenistan PETRONAS has sponsored to the participants when seeking
graduates and the third Institut Turkmen students for technical employment opportunities.
Teknologi Petroleum PETRONAS degrees in Electrical & Electronic,
(INSTEP) Convocation Ceremony Chemical Engineering, Mechanical, The bi-monthly health care services
was successfully held at Kuvvat Civil, Information Technology and involved visits to Garraf villages
Hotel in Avaza, Turkmenbashy City Petroleum Engineering. Some to offer basic health care and
on 30 June 2011. of these graduates are currently check-ups to those who could
holding technical positions in not afford to visit local clinics due
Mindful of the value of giving back PC(T)SB. to high travelling costs. PCIHBV
to the nation and together with also set up a mini clinic near
the support of the Turkmenistan IRAQ village areas where a staff doctor
Government, PETRONAS examined the villagers. More than
sponsored 15 students during During the period, PETRONAS 600 people, primarily women and
the period to study at UTP in a Carigali Iraq Holding BV (PCIHBV) children were treated for a range of
wide range of engineering and rolled out three major CSR initiatives ailments. In addition to dispensing
technology programmes relevant namely; bi-monthly Basic Health basic medical care and treatment,
to the industry. A total of 60 Third Care Services, school refurbishment PCIHBV personnel also conducted
Batch Operations Technicians and and basic welding workshop programmes to educate the local
36 Fire Technicians also completed programmes in Garraf. communities about Health, Safety
their training at PETRONAS Carigali and Environment (HSE) issues.
(Turkmenistan) Sdn Bhd (PC(T)SB) Two schools were refurbished in
and INSTEP during the period. October and November 2011.
In collaboration with the Government A basic welding workshop
of Turkmenistan, PETRONAS programme was conducted. Two
launched its academic sponsorship batches graduated in October and
December. It is hoped that such
100 PETRONAS ANNUAL REPORT PE 2011
MAIN 19 June 2011
EVENTS
PETRONAS supported the Langkawi International
CORPORATE Dialogue session with the aim of strengthening ties and
building rapport with key officials from various participating
5 April 2011 nations. PETRONAS has been supporting the sessions
since 1996.
PETRONAS’ partnership with which includes fuel, engine oils,
Mercedes GP PETRONAS Formula hydraulic and gear oils as well as 29 June 2011
One Team reached another transmission fluids, will be supplied
significant milestone with the to the team through PETRONAS’ PETRONAS
supply of its Fluid Technology subsidiary, PETRONAS Lubricants inked a three-
Solutions™ package. PETRONAS International (PLI). year partnership
Fluid Technology Solutions™, with Yayasan
Sabah,
3 May 2011 contributing RM6
million for the
Mercedes-Benz announced an extension of its motorsports partnership conservation of
with PETRONAS from Formula One to the German Touring Car Masters Sabah’s Imbak
(DTM) series. The partnership between PETRONAS and Mercedes-Benz Canyon, which
discovers and nurtures young talents in Formula 3 to the senior categories is among the
of DTM and Formula One. last remaining frontiers of pristine and natural equatorial
rainforests in the region.
19 July 2011
PETRONAS improved its ranking to 86th from 107th in
FORTUNE Magazine’s annual ranking of the world’s 500
largest companies by revenue. PETRONAS also improved
its ranking to 11th from 25th place in the FORTUNE’s list of
the world’s most profitable companies.
5 August 2011
PETRONAS signed separate Memorandums of
Understanding with four major oil and gas players to
collaborate in enhancing the industry’s local workforce
competency through a variety of capability development
programmes and education activities.
The words you are searching are inside this book. To get more targeted content, please make full-text search by clicking here.
AnnualReport_FinancialStatement_PE2011
Discover the best professional documents and content resources in AnyFlip Document Base.
Search