Technical and Nontechnical Skills Key to Career in Megaprojects
The oil and gas industry has seen a growing number of megaprojects tapping into emerging opportunities in various locations around the globe. Given their size and scale, megaprojects have strategic importance for upstream stakeholders. Yoga Wicaksono from Pertamina, Indonesia’s national oil company, shares his insights and lessons learned on megaprojects. Wicaksono has assisted in the completion of various megaprojects in the Asia-Pacific region from an upstream merger and acquisition perspective.
— Ivo Foianini, Reva Cipto, Ernesto Cedeno, and Deen Akinrinsola, TWA Discover a Career section editors.
My upstream career started in a small to medium-sized company, which entered into a technical assistance contract with Pertamina, managing small oil fields as a planning and economics specialist. I then joined Pertamina in the Upstream Business Development group. It was a personal motivation for me to work in a strategic role, as I have always felt challenged working with people from both technical and nontechnical backgrounds. The ability to see the big picture, while at the same time understanding the intricacies of transactions (ranging from fiscal terms to decisional analysis), is an important management competency I saw as a requirement for my role. Pertamina gave me room to grow and I was able to move from smaller projects to megaprojects.
Megaprojects are commonly defined as large-scale investments valued at a minimum of USD 500 million. This description is nonetheless generic, as each company has different metrics that depend on their respective portfolio. Investment-related projects leading to potential acquisitions can be categorized as megaprojects, similar to other megaprojects such as drilling campaigns and facility construction projects. Having worked in business development, I have been involved with projects valued in the billions of dollars, which would be typically considered megaprojects. Most people agree that acquisition is the fastest way to grow their portfolio. However, acquisition can be “costly” if done incorrectly; therefore, it is important to define a good strategy that aligns with your company’s mergers and acquisitions strategy. As such, an investment-related acquisition can also be categorized as a megaproject.
Gaining experience in various roles, such as budget and reporting specialist, commercial analyst, and petroleum economist, have helped me to manage my work as a petroleum economist and risk analyst. My current role mainly involves performing project valuation and project risk analysis, which is related to providing technoeconomic analyses to determine project feasibility. How the project can add to corporate value and what factors could jeopardize the project are the two main variables that I am responsible for explaining to the management. Since financial investment decision (FID) is an irreversible process, prior to approving the FID, management should feel comfortable that they can see a robust analysis that encompasses strategic consideration, project value, and the risk embedded in the acquisition-type megaproject. This will help them ensure that the most effective scenario and risk mitigation can be applied to achieve project objectives.
In an acquisition-type megaproject, we place due diligence as an important first risk-mitigation process in assessing a potential asset, including the embedded uncertainties. Proper due diligence on an upstream asset will provide sufficient confidence in making estimations, primarily based on the available information and the risks associated with the project (Fig. 1).
When generating an accurate valuation of an asset, certain key information must be gathered to address questions related to due diligence, such as the reserve and resource estimation, possible development scenario and associated cost, oil/gas price forecast, and quantifying other external factors such as government regulation, partnership, and environmental issues. It is also important to understand the type of synergies we could apply in the megaprojects to balance these uncertainties. For example, if cost overruns have occurred in past drilling campaigns due to technology challenges and our teams have experience mitigating such challenges, we can deduce that a synergy value could be created by applying past experience to acquiring and successfully operating a new asset.
Megaproject Team Complexity
In order to have the right profile for working in a megaproject, candidates require multiple proficiencies that are both technical and nontechnical. Being a technical subject matter expert certainly puts a person on a short list, but operational experience (field work) as well as soft skills certainly are a requirement. Megaprojects always comprise multiple work teams, so openness to teamwork is a must. Communication skills, both oral and written, are crucial soft skill competencies that can bolster a person’s résumé due to the strong multidisciplinary nature of the work.
Another crucial skill is what I call “teamwork flexibility.” Having the ability to easily work in teams made of people with different abilities, backgrounds, nationalities, and personalities leads to progress in the complex structure typically present in megaprojects.
If I have to share some words of advice to our young professionals, it is to be optimistic and have a “can-do” attitude. I believe that the prize of success is obtained through hard work and the determination to apply the best of ourselves to the task at hand. Do not be disheartened if you are shoved into smaller menial tasks in the start of your career (I started off from binding presentations, stapling meeting documents, and even counting the number of lightbulbs during an office interior tender). You will be surprised to see that these small tasks may translate into bigger things.
Another important characteristic to have is humility—whether you are a generalist or technical specialist in your field, there will always be room for learning and improvement. As I have previously mentioned, megaprojects deal with various personnel with different backgrounds, so always keep an open mind and consider other parties’ viewpoints. Last but not least, be happy. People rarely succeed unless they have fun in what they are doing.
Yoga Wicaksono is a senior petroleum economist and risk analyst in Pertamina Upstream Business Development. He supports Pertamina in conducting asset valuation in mergers and acquisitions, risk analysis, share purchase agreements negotiation, contract negotiation, upstream oil and gas long-term planning and capital budgeting, and other commercial roles. He has significant experience in petroleum economics risk analysis in Southeast Asia, particularly Malaysia and Indonesia. Wicaksono holds a master’s degree in industrial engineering from the University of Indonesia, and an MBA in finance and bachelor’s degree in public administration from Gadjah Mada University.
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26 May 2020