PETRONAS' Journey in Human Capital Development

UNCTAD

17th Africa OILGASMINE, Khartoum, 23-26 November 2015

Extractive Industries and Sustainable Job Creation

Building Institutional Capabilities: PETRONAS' journey in Human Capital Development

Mohamad Yusof Shahid Chairman, PETRONAS Sudan Operations

The views expressed are those of the author and do not necessarily reflect the views of UNCTAD.

Building Institutional Capabilities: PETRONAS' journey in Human Capital Development

Presented by Mr. M Yusof Shahid Chairman, PETRONAS Sudan Operations

All rights reserved. No part of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) without the permission of the copyright owner.

©Petroliam Nasional Berhad (PETRONAS) 2015 1 AGENDA

PETRONAS is a Major Multinational Oil and Gas Company

01 PETRONAS: Structured Approach for Human Resources Development

02 PETRONAS in Sudan

04 The Future

©Petroliam Nasional Berhad (PETRONAS) 2015 2 Agile Development & Growth Transformation of an NOC into a global energy champion

REVENUE (USD bil)

Domestic Regulator Domestic Player Going International Global Player 100 Ventured into • Ventured into Iraq 2009 Turkmenistan • Acquired Engen Ltd 2012 Duyong - 1st Acquired Progress upstream gas 1996 60 Energy Resources PETRONAS was production incorporated on 17 Aug 1984 1974 Startup of 1st 3-phase PGU 1997 Refinery at project 2008 Kertih (1984-1997) Entered Sudan & Myanmar • Acquired FL Selenia 30 1983 • Acquired stakes in Gladstone Liquefied Natural Gas Project in Australia Introduced and signed 1st PSC to replace 1st LNG shipment to 1991 concession system Japan 1st major Opened 1st 1981 international retail station 1976 venture in Vietnam Expanded into 1980 Petrochemicals 0

YEAR

©Petroliam Nasional Berhad (PETRONAS) 2015 3 What Makes Us Unique

Commitment to sustainable development and human rights

Incorporated as Professionally Good corporate a company managed citizenship

Autonomous Global standards of Commercially decision-making by governance, oriented Executive transparency and Management ethical conduct

Maximize value and Commitment to wealth creation for Oversight by Board sustainable shareholders of Directors development and human rights.

©Petroliam Nasional Berhad (PETRONAS) 2015 4 Custodian of National Resources

Working closely with ministries to develop the national petroleum sector

Prime Minister

Ministry of Ministry of Ministry of Ministry of Prime Domestic Energy, Green Natural Ministry of International Minister’s Trade, Co- Technology Resources & Finance Trade & Department operatives & and Water Environment Industry Consumerism

Malaysian Custodian- Department of Economic Investment manages the Environment Planning Unit Development petroleum Authority resources of the Nation

PS Contractors/ Operators

©Petroliam Nasional Berhad (PETRONAS) 2015 5 Our DNA

Vision, mission and values driving strong performance

Vision: To Be A Leading Oil and Gas Multinational of Choice

Mission Shared Values

• We are a business entity • Loyalty

• Petroleum is our core business • Integrity

• Our primary responsibility is to • Professionalism develop and add value to this national resource • Cohesiveness

• Our objective is to contribute to the well-being of the people and the nation

©Petroliam Nasional Berhad (PETRONAS) 2015 6 PETRONAS is a Major Multinational Oil and Gas Company

A Fortune Global 500 Company(1)

#69 #22 #6 most profitable oil by revenue by profit and gas company

World-class Scale in Oil and Gas Production(2) Large Scale Global Reach (mmboe/d) 5.0

2.5 Fully Integrated Diversified Portfolio

0.0

One of the Most Profitable Oil and Gas Deep Technical and Operating (1) Leader in Industry Companies in the World Experience Net Profit (US$ bn) 40 30 Strong Balance Sheet / Prudent Commitment to Corporate 20 Policies / Highly Profitable Governance / Transparency 10 0

______(1) Fortune Global 500 (2014) (2) FY2014 production; Source: company disclosures ©Petroliam Nasional Berhad (PETRONAS) 2015 7 Full Integration Across the Entire Value Chain

Integration improves margins, diversifies the revenue base and mitigates cashflow volatility

LNG Shipping Markets PETRONAS is a Prudent, Safe and Efficient Export sector Operator

Regasification Terminal  40+ years operating experience in Malaysia Liquefaction Power sector Natural Industrial sector  Commitment to high Gas HSE standards Processed Gas / PGU System  High reliability rates Exploration, Development Residential and  Deploying technology and commercial sectors Production to enhance value

Processing LPG

Crude Oil Industrial sector – olefins, fertilizers, methanol Petrochemical Plant

Transportation sector – Refining diesel, gasoline, jet fuel and lubricants Petroleum Products

©Petroliam Nasional Berhad (PETRONAS) 2015 8 AGENDA

PETRONAS is a Major Multinational Oil and Gas Company

01 PETRONAS: Structured Approach for Human Resources Development

02 PETRONAS in Sudan

04 The Future

©Petroliam Nasional Berhad (PETRONAS) 2015 9 Overcoming Industry Current Challenges through an Integrated Approach to Develop Competent Human Capital

Growing Dramatic Organizational Key global increase in demand for price Levers of Performance energy volatility

Declining production Geopolitical & reserves uncertainty from and existing volatility Interlinked Staffing fields Strategic Frameworks

Uncon Tight oil & shale gas Young Professional Sudanese Development Monetizati Ultra-deepw Framework on of more ater difficult resources

©Petroliam Nasional Berhad (PETRONAS) 2015 10 ORGANISATION – Key Levers of Performance

JOB enrichment and Core Function Specialisation in certain departments to ensure clear focus and accountability to support the key levers

Priorities – Strategically inter-related

Organization AGREEMENT Ownership & Production

Government Motivation

Contribution Profit Building Performance Core Creating Governance Leadership Services Compete Value ncies Growth Partner Jobs Contribution JOA Economic Life Sudanization

Lever 1 : Partners rights Lever 2 : MC to shape Lever 3 : Blending Lever 4 : Creating Values and position the organisation Partners position with for all local to all stakeholders

©Petroliam Nasional Berhad (PETRONAS) 2015 11 Sudanisation Philosophy Is Based on Staffing Aspiration and Interlinked Strategic Frameworks

Input Staffing framework Output

1 2 RequiredRequired Mix Malaysian Optimal JobsJobs in JOC forfor staffing optionsoptions ForFor PSO growth Sudanese Mix

Output Input Defines staffing options for Staffing Aspiration each job family YPS dev. f/work Factors affecting general principles On the job training 100% mentoring/peer assist EPSA requirements 80% Local labour laws 60% Formal training Workforce 40% capability 20% Secondment/cross-postings Direct Hires 0% Matches staffing options to YPS Mid Term Long Term Retention framework Malaysian capability dev. role

Global Input Improve Output Leader

Selec- Improve Right trainingtraining tive ChangesChanges (exits)(exits) profile by staffing in staff basebase option Suggests retention 4 3 Output efforts by capability Input

©Petroliam Nasional Berhad (PETRONAS) 2015 12 Young Professional Sudanese Development Framework Fulfills PSO Aspiration of Growing Own Timber

Sudanese staff recruited by PCO

Sudanese employed to Seeding Development fill up Sudan JOCs & Program PCO positions

Interview & Recruitment by Group Sudanese employed to Talent Sourcing fill other PETRONAS Filling PETRONAS positions worldwide positions In Malaysia

Sudanese UTP Scholars UTP Scholarships released to GOVT or offered to Sudanese Filling up other companies Filling up PETRONAS Sudan JOC and Positions PCO positions Worldwide

PETRONAS Top Leadership ©Petroliam Nasional Berhad (PETRONAS) 2015 13 Young Professionals (YPS) Development Framework Implementation Has Many Challenges and Issues

Seeding Permanent PETRONAS MPB / Educamp Recruitment Program Post Position in LTMP Scholarship (2 yrs) (5-8 yrs Sudan

• Number • SI of position • How • Transfer • Transfer in Sudan many • PSCO • 2 years back to to graduated offer seeding Sudan permanent • What program in • To fill position in discipline • When • Which KL or PETRONAS PCSB / and what JOC/ OPU Sudan position in PETRONAS • When discipline for Sudan required attachment

CONSIDERATIONS

©Petroliam Nasional Berhad (PETRONAS) 2015 14 Overcoming challenges by developing capabilities PETRONAS capability development programmes

Universiti Teknologi PETRONAS (UTP) PETRONAS Leadership Centre (PLC), PLC provides a wide range of learning One of Malaysia's leading science and consultancy and advisory services; and technology institutions of higher innovative solutions for learning, providing students with transformational learning experiences opportunities for the pursuit of covering all critical junctures of the knowledge, expertise and leadership continuum, from leading self advancement in the fields of to leading enterprise. engineering, science and technology.

Institut Teknologi Petroleum PETRONAS PETRONAS Research Sdn Bhd (INSTEP) Provides a wide range of learning consultancy Technical training service provider and advisory services; and innovative owned by PETRONAS Technical solutions for transformational learning Training Sdn. Bhd. Established in experiences covering all critical junctures of 1981, primarily set-up to train the leadership continuum, from leading self skilled technicians and operators in to leading enterprise. the oil and gas services.

INSTEP Integrated Oil and Gas Training Centre (IOTC) INSTEP IOGTC is an integrated facility to create a real workplace experience in a safe environment. The complex consists of 2 units of an offshore platform live replica, a live replica of common process plant and a Drilling Academy (a collaboration with UMW Oil & Gas) complete with drilling rig and a drilling simulator.

PETRONAS strives to provide world-class educational and training services through the various institutions we have established

©Petroliam Nasional Berhad (PETRONAS) 2015 15 AGENDA

PETRONAS is a Major Multinational Oil and Gas Company

01 PETRONAS: Structured Approach for Human Resources Development

02 PETRONAS in Sudan

04 The Future

©Petroliam Nasional Berhad (PETRONAS) 2015 16 We have interest in two Exploration & Production Sharing Agreements (EPSAs) in Sudan

Block 2A, 2B & 4

30% 40% 25% 5%

GNPOC

Block 3 & 7

40% 41% 5%

PETRODAR 6% 8%

PDOC Downstream 16.4% 2 % 16% 60%

2.4% 3.2%

©Petroliam Nasional Berhad (PETRONAS) 2015 Pipelines Border Refinery 17 Highlights of 20 years of Successful Mutual Cooperation in Sudan

• PETRONAS entered Block 1,2&4 in spite of technical challenges, paving the way for Sudan to be an oil exporting country.

• Brownfield Process optimization – optimum operating parameter, eliminate system bottleneck, liquid handlings.

• Integrated Operations practices– Using modelling simulators to solve system back pressure, optimise well production and uptime, maximise RF, optimise power consumption

• Introducing Flow assurance – handling of complex issues i.e. heavy/ waxy crude, foam, condensate

• People development – providing training, coaching and mentoring: technical training, Scholarships to UTP and vocational training in KVTC.

Adopting a Holistic approach to balance our business objectives with the need to contribute to the human capital development in our host country

Optimization of Growth

• Look for Opportunities for Knowledge transfer • Assessments of Business Performance and • Increase Performance Competitive Advantage

• Technical Build Up Competitiveness Interventions and Capability • Education & • Competency & Capability Training

• Stakeholder • Change Initiatives Engagements

Nurturing Early Birds PETRONAS Mobile Library ( 2005 -2011)

Competency Training: Khartoum Vocational Training Centre

Established in 2005 in cooperation with the Ministry of Education, Khartoum State, Institute Technology Petroleum Petronas (INSTEP) and GIATMARA, Malaysia • Training Fields: 1. Automotive Maintenance Technology. 2. Electrical Maintenance Technology 3. Air conditioning & Refrigeration Maintenance 4. Plumbing Technology 5. Building Technology 6. Training of Trainers program • Handed over to Ministry of Education, Khartoum State in 2012.

©Petroliam Nasional Berhad (PETRONAS) 2015 21 Undergraduate and Postgraduate Scholarship to Study in Universiti Teknologi PETRONAS (UTP)

170 Undergraduate and Postgraduate Scholarships

PETRONAS is a Major Multinational Oil and Gas Company

01 PETRONAS: Structured Approach for Human Resources Development

02 PETRONAS in Sudan

04 The Future

Our people are our greatest assets in sustaining PETRONAS’ competitive edge

• Competent Resources

• Training and Educational Institutions “Build Own Timbers”

• Maximising value from our global capability development activities: Training with Partners and Specialist Company

• Global Talent Strategy focusing on pursuing the right talents, providing them with the right environment and ultimately developing the right leaders.