Oil players asked to 'wake-up' and rethink business models as oil price plunges

Sharing ideas: (from left) royal Dutch Shell former director, projects and technology matthias Bichsel, Geomarkets Sales and marketing, cGG executive vice-president raoul Jacquand, Schlumberger president, operations and integration Patrick Schorn, Shahril and Petronas senior vice-president, Upstream malaysia Datuk mohd Anuar Taib at the conference.

KUALA LUMPUR: The plunging price of crude oil serves as a “wake-up call” for all players and forces them to rethink their business models, said Tan Sri Shahril Shamsuddin of SapuraKencana Petroleum Bhd.

SapuraKencana is the largest locally listed oil and gas (O&G) services and exploration company, which has seen a whopping RM14.5bil being wiped out of its market capitalisation since the beginning of July when oil prices began to dip. Its share price is 50% down, year-to-date. “We can only control certain things. It (low oil prices) forces us to innovate not just services but our business model as well. “It is the dawn of a new era. We need to realign our costs and innovate to survive the current environment of lower oil prices. We should take into consideration the new reality to overcome challenges, volatility, and existing political and business changes,” Shahril said at the International Petroleum Technology Conference yesterday.