OBG talks to Ken Marnoch, Managing Director, Brunei Shell Petroleum

Interview: Ken Marnoch

How are local oil and gas operators assisting with the national plan for economic diversification?

KEN MARNOCH: As the energy sector forms the backbone of the Bruneian economy, it must serve as the starting point for diversification. Oil and gas operators can facilitate this in many areas, both within the energy and in other industries. Promoting education and entrepreneurship is crucial, and we have many initiatives to help support the emergence of local talent that will sustain the sector in the future. For example, in Brunei Shell Petroleum, we work with the Ministry of Education on the Brunei Entrepreneurship Education Scheme, which helps pupils set up and run their own companies so they can develop a business- minded approach early on. To support local small and medium-sized enterprises, we run programmes like LiveWIRE Brunei, which has proven highly successful in helping them develop from scratch.

The oil and gas industry has a part in developing other sectors as well. We play a strong supporting role in creating downstream industry and power-generation projects, and facilitate growth in the construction sector. We have been discussing using our data centre as a secure backup for others, which could put Brunei Darussalam in a stronger position to serve as a regional hub for data. The country has the capacity to develop industries like information and communications technology, where it has lots of skilled human capital. It is also strong in safety training and management, with the potential to export that expertise around the world. In this way, Bruneian companies that are linked to the energy industry and have highly mobile elements of the knowledge economy hold great potential to establish themselves and succeed internationally, thus aiding the country’s economic diversification.

To what extent is the Local Business Development (LBD) framework impacting the energy sector?

MARNOCH: Since the LBD framework was implemented, we have been generating over 1500 new Bruneian jobs a year in the energy sector. Oil and gas operators are working continuously with new local companies that are able to take on parts of our business, allowing them to grow and develop from these partnerships. We are working increasingly with new Bruneian firms in areas like wellhead maintenance, workover services for onshore wells, offshore maintenance and valve upkeep.

The LBD framework aims to develop Bruneian employment and foster the success of Bruneian companies. We work with the government to measure and enforce the directive, so as to drive real performance and ensure that the sector is not just superficially placing Bruneians in jobs in order to improve the statistics. It is difficult to calculate how much of the true value generated from these initiatives is actually staying in Brunei Darussalam, and this is an issue we are constantly discussing. As players in the energy sector, we must do as much as possible to ensure the long-term setup of a regionally competitive industry that can and will contribute real value to the people of Brunei.

What new technologies are being introduced to ensure that production levels are maintained?

MARNOCH: The challenge we face is to deal with the maturity of our existing fields by finding new ways to safely discover, develop and produce hydrocarbons over the long term and cost effectively. We have been conducting large-scale seismic programmes and using controlled source electromagnetic surveying. These studies are then being utilised in the exploration wells that we have been drilling throughout 2014.

We are also considering other, newer seismic technologies to reduce risk in our exploration portfolio. Deepwater blocks are on the radar and we are looking for the most effective and economic ways to develop these. Other technologies include high-pressure and high-temperature drilling, smart well technology and 3D platform scanning. The industry is constantly looking to make incremental improvements that enable us to develop resources safely and efficiently, so as to generate a strong future for the sector and the nation.