Indonesia’s EPC sceneFebruary 4, 2020
Dhira Nandana, president-director and CEO of Tripatra Engineers and Constructors, talks to TOGY about difficulties in carrying out EPC projects in Indonesia and the company’s work on the Tangguh Train 3 expansion. Tripatra is an integrated Indonesian energy services company providing project management, engineering, procurement and construction.
What lessons has Tripatra learned from the Tangguh project?
We are part of a consortium, with Chiyoda and Saipem, who execute the Tangguh Train 3 expansion EPC project. The project is due to be finalised by 2021.
This project is quite interesting because there is no splitting of the scope. There is a genuine transfer of knowledge taking place as we are also learning about the engineering side of the business. In this sense, we have had to tackle it with engineering know-how as well.
Furthermore, this project has shown that, in order to stay competitive, one has to arrange and co-ordinate all of one’s manpower well. While some foreign staff can be hired for the top positions, all production personnel have to be local. Being in the lead position has also forced us to learn how to interact, co-ordinate and manage different counterparts.
What challenges do you find in carrying out EPC projects in Indonesia?
Obtaining EPC projects is always through a competitive tender, where each of the bidders shall propose its respective execution plan and related prices based on the tender document provided by the client. The information in the tender document itself is usually still at the stage of least maturity. That makes the risk for EPC projects higher – not to mention that the bidders have to compete with each other.
Therefore, during the project execution any unforeseen situation can become an issue that may affect the overall project delivery. Some challenges can come from the availability of a competent workforce that is adequate to perform in EPC industries.
Another challenge, specifically if we talk about a large scale of project, is that it takes time to materialise. The major challenge inherent in oil and gas projects is that these are often subject to delays and consequently go over budget.
How eager is the company to acquire a leading position in consortiums?
Based on our experience and track records, we believe that we have the capability and capacity for a leading position in consortiums.
What new business approach for EPC projects is Tripatra implementing?
In general the business approach will not be much different. However, as we can see, not only in Indonesia but also elsewhere in the world, the EPC project execution delivery faces more and more challenges. To keep doing the same thing may not be enough. New approaches have to be adopted. We are doing the same: New approaches are being adopted, such as using the assistance of digital technology.
What position do you hold in the hydrocarbons industry and which clients do you have?
We mainly cater to the upstream oil and gas sector. However, given the fact that E&P projects seem to have slowed down, we have decided to expand our services to other sectors. On this note, we are interested in delving into the downstream business as we see plenty of potential there. Our share of revenue coming from the oil and gas sector stands at 90%, which clearly reflects how intrinsically connected we are with the industry.
As for clients, apart from some of the major IOCs such as ExxonMobil, BP, Chevron and also Indonesia’s NOC, Pertamina, with whom we have been long-standing partners, we are currently looking to broaden our clientele portfolio.
What business strategy does the company have in mind for the years to come?
At the moment we are focusing on downstream projects as we see great potential in this sector moving forwards. In our five-year strategic business plan, our aim is to reduce our overall dependence on the oil and gas industry.