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The Association of Malaysian Oil andGas Engineering Consultants

(MOGEC) was formed in 1999 by a groupof six main players in the upstream sectorof the oil and gas industry. It was anoffshoot of CORAL (Cost ReductionAlliances), a major oil and gas industryinitiative formed to establish a frameworkon cost reduction within the Malaysian oiland gas industry.

MOGEC’s objectives are:1.` To provide forum for discussion on

issues of common interest;2. To stimulate cooperation among

members;3. To develop local resources;4. To promote collaboration with local

education institutions;5. To attract new aspirants to the oil and

gas industry.

The oil and gas industry is split intoupstream and downstream sectors. Theupstream sector includes exploration andproduction of crude oil while thedownstream sector includes oil refining,gas processing and liquefaction,petrochemical manufacturing andmarketing of petroleum products..Although MOGEC was formed byupstream players, membership was lateropened to downstream players as well.Since then, MOGEC membership hasgrown in size. Currently, MOGEC has 36members; made up of Founder Members,Ordinary Members and AssociateMembers. Founder Members are the

original six companies that foundedMOGEC: Technip, AkerKvaerner, MMCOil and Gas Engineering, SimeEngineering, Ranhill Worley and ProtekEngineers. Ordinary Members arecompanies that joined MOGEC later andhave the capability to provide multi-discipline engineering design services forthe upstream and downstream sectors ofthe oil and gas industry. AssociateMembers include small or specialisedengineering services companies as well asother engineering companies that providespecialist studies, sales/services ofequipment/materials, fabrication ofequipment packages and manpowersupply to the oil and gas industry.

Services provided by MOGECmembers range from project management,engineering design, procurement,construction, commissioning/ decom-missioning, project control, qualityassurance and HSE. Currently, MOGECmembers’ main clients include subsidiariesof PETRONAS, ExxonMobil, Shell,Talisman and Murphy Oil.

Development of Local ResourcesPETRONAS’ Umbrella Contract,

introduced in the mid 1980s for theupstream sector, made it mandatory for alldesign work (where possible) to beperformed locally by licensed contractors/consultants. This helped the localengineering services industry for oil and gasindustry to develop. Without thiscontract/agreement, many engineeringservices would be done overseas. This isunderstandable as petroleum companiesare mainly foreign.

The oil and gas industry is a “high tech”industry. Many local engineering servicesconsultants here have overseas links as thereare specialised areas in the oil and gasindustry. These local engineering consult-ants have learned from these partners viatechnology transfer arrangements. Theselocal engineering consultants have gonethrough a learning curve; learning fromvarious problems and all these experiencesare kept in the country. If foreign engineerswere used, the experience gained would bekept in the foreign country. In addition,foreign exchange would flow out ofMalaysia as foreign currency is used in theoil and gas sector.

Challenges Despite the favourable environment and

opportunity provided by PETRONAS, localengineering services consultants continuallyface the problem of finding staff to beassigned to projects. This is due to shortage oflocal engineers with the right experience. The

MOGEC Develops Local Engineers to Meet O&GChallenges..........................................................................................................................................................................................................................

By: Ir. Muhamad Apandi bin Osman, MIEM, PEng, ASEAN Eng

Oil, Gas and Mining Technical Division

Offshore Platform Project (Topside) Onshore Pipeline Project Offshore Platform Complex R&R Project

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situation is further worsened when Clients award contract toengineering services consultants, they are very specific on who wouldbe assigned on their projects. They practically approve each and everyindividual engineer assigned. They would not approve a graduateengineer with no experience to work on their projects. Thus the entrylevel for graduates into the industry is almost impossible.

Realising this, MOGEC recently submitted a proposal toPETRONAS to make employment and training of fresh graduates onProduction Sharing Contractors (PSCs) projects as a requirement;with PSCs absorbing half of their cost and the other half being borneby Engineering Services Consultants.

In addition to the “on-the-job” training to enhance capability oflocal engineers, MOGEC is also pursuing training of local engineersthrough classroom and practical training via training providers. Onesuch effort was a discussion made with Majlis Latihan VokasionalKebangsaan. These efforts are necessary to ensure sufficient supplyof qualified local engineers. This replenishment of ‘home growntimber’ is critical especially at this stage where the nation loses manyexperienced engineers to international companies.

Future OutlookOnce the issue on

shortage of experiencedmanpower has beenmanaged, MOGEC plansto develop Kuala Lumpuras the regional hub forengineering services forthe oil and gas industry.For example, if there is a project in Malaysia and within theregion or even worldwide, the plan is to have Malaysian eng-ineers to provide engineering services from Malaysia. With theadvancement of Information and Communication Technology,location is not critical. Works can be done in Malaysia forprojects in the region and the Middle East for instance.

Malaysia offers several advantages as an engineering hub:• Booming indigenous oil and gas industry• Good infrastructure• Political stability• Proximity to market in the region• Low cost base• English language as means of communication

Currently some MOGEC members like Technip,AkerKvaerner, Ranhill Worley, MMC and OGP are alreadyexporting services to China, Middle East, Africa and elsewherein Asia. Other members too should take the opportunity to jointhe bandwagon and take the opportunity to initially providesupport to their elder brothers as a “stepping stone” before theybecome equally successful themselves.

It is also hoped that in the future, MOGEC members will beable to overcome greater challenges faced by the oil and gasindustry such as venturing into deepwater development for theupstream sector and executing more complex plant for thedownstream sector. With these efforts, Kuala Lumpur can bedeveloped into a regional hub for engineering services for theupstream and downstream sectors of the oil and gas industry;providing quality engineering services at competitive prices. ■

Oil, Gas and Mining Technical Division

Plant R&R (Revamp & Rejuvenation) Project

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