If you scan through the TCE, you notice that there is a second hand equipment market in the chemical industry. How come there’s no such market for the Malaysian oil and gas industry? We have had assets that have been transferred wholesale from foreign operators to PETRONAS Carigali Sdn Bhd (PCSB), and not without a lot of grumble as to the shoddy state of them. You don’t hear of dealers flying to platforms, and purchasing equipment by the lot (note: please don’t try to reuse pressure gauges. Wellhead christmas trees should be good, though. And don’t think about reusing a 10-year old DCS).
I believe IPC tried to do that, purchasing off the shelf (read: second hand / already fabricated) equipment to develop acerage off Semenanjung Malaysia, but that was the only attempt I heard.
What could be stopping the market? Maybe:
- Cheaper to fabricate then to import. Knowing our tax structure, and concerns about Malaysia being a dumping ground (customs: “You want to import WHAT?”). Not to mention loss of local jobs.
- No ready source of second hand equipment for O&G purposes. Most of the old oil platforms have been transferred to PCSB, though there are some that have been decommissioned (one’s an artificial reef at the Kenyalang dive site off Miri). Mobile Production Units (MOPUs) are designed to be reused, though the key word is ‘designed’. I guess their paper trail is centred around such use.
- Too difficult to recertify equipment? How do you recert pressure vessels? Do you need the original fabrication drawings, procedures and certificates, or do 100% non destructive testing, and pressure test the dang thing?
- Insurance companies not willing to cover the costs.
- Just not cool enough for companies whose revenue dwarfs GDP of countries.
Wata - Malaysian Oil and Gas Engineer 
why do the foreign partners worry under a PSC agreement with cost recovery? makes me think…..
To Jabba: Ah, if you look at how the revenue is divided, a significant amount is on cost recovery, much more than profit. And do you know how hard it is to explain, and the number of Powerpoint presentations that need to be prepared to justify non-cost recoverable expenses? I almost wiped off the ‘e’ key on my keyboard.