Petronas: Cost-savings programme cut offshore support vessel count by up to 30%

AN industry-wide cost reduction drive led by Malaysian national oil company Petronas has significantly shaved logistics costs for upstream oil and gas projects, with the offshore support vessel (OSV) count off Malaysia having shrunk by up to 30 per cent.

Petronas upstream chief executive Anuar Taib said that the number of OSVs working in Malaysia's offshore oil and gas projects stands at between 140 to 150 today, compared to an initial projection of 200 before the industry-wide cost reduction drive kicked in.

Mr Anuar said that the reduction in logistics costs made possible with Coral 2.0, the cost reduction programme, is just one example of how oil and gas companies active in Malaysia can collaborate on pooling resources.

Petronas has said it hopes to achieve 30 per cent of cost savings through the third phase of implementation for Coral 2.0, up from the 12 per cent target set for first phase.

Mr Anuar acknowledged that some of these savings may initially come from squeezing contractors, including OSV owner-operators.

But for Malaysian O&G to be able to make any further progress on this front, he said that industry players have to collaborate in a "more transparent" manner.

This would involve, for instance, sharing of data not just for the purpose of cutting costs but also to yield efficiency gains and improve safety of O&G operations.