OPEN ACCESS Engineering Leaders Conference 2014

Towards a sustainable collaboration

between the oil and gas industry and
university
MS Liew1, Lee Hsiu Eik2, Noor Amila Wan Abdullah Zawawi2

1
Faculty of Geosciences and Petroleum
Engineering, Universiti Teknologi
PETRONAS, Malaysia
2
Civil Engineering Department,
Universiti Teknologi PETRONAS,
Malaysia
ABSTRACT
There are few universities globally focused on oil and gas technical education. In some cases, these
universities are set up by the oil and gas majors, which are typically state-owned. The need for the
university to be linked to the industry, especially in the oil and gas sector, is an important facet of the
daily operation of the university. This ensures that the university remains relevant in time and is
contributing to the oil and gas industries. The fast and ever-changing business climate and the speed
of conduct of the oil and gas business predicates that the university must be geared to remain relevant
and also sustainable in serving the oil and gas fraternities by producing graduates who will typically
find their way into the oil and gas industries. In addition, the research components of the university
must also address the current issues affecting the oil and gas industries. This paper seeks to address
the modes of delivery by the university and the industries in achieving sustainable growth academically
and in research through collaboration with the oil and gas industries. This involves the working
mechanism of the university in relation to the integration of the often-complicated state-owned oil and
gas major, the oil and gas service providers, and also the oil and gas vendors. In some instances
governmental bodies overseeing the growth and support of the state owned oil and gas company are
part of the working parameters in the collaboration. It was found that the fit for purpose collaborative
efforts between the university and the oil and gas industries are key to sustainable academic, research
and business development. It involves one key business model with several sub-key business models
in making a sustainable collaboration model. A case example is presented.

http://dx.doi.org/
10.5339/qproc.2015.elc2014.52
ª 2015 Liew, Eik, Zawawi, licensee
Bloomsbury Qatar Foundation
Journals. This is an open access
article distributed under the terms
of the Creative Commons
Attribution license CC BY 4.0, which
permits unrestricted use,
distribution and reproduction in any
medium, provided the original work
is properly cited.

Cite this article as: Liew MS, Eik LH, Zawawi NAWA. Towards a sustainable collaboration between
the oil and gas industry and university, QScience Proceedings (Engineering Leaders Conference
2014) 2015:52 http://dx.doi.org/10.5339/qproc.2015.elc2014.52
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Liew, Eik, Zawawi, QScience Proceedings 2015.elc2014:52

INTRODUCTION
The birth of the oil industry can be dated back to the mid-nineteenth century. The year 1858 saw
a Canadian Entrepreneur by the name of James Miller Williams who drilled and produced oil in a
Canadian township.1 A year later, on the 27th of August 1859, at Titusville, Pennsylvania, Edwin L. Drake
successfully drilled and produced crude oil from an onshore well. Hence, this highly lucrative oil
business, coupled with natural gas resources, has been given an unmistakable title as we know it today:
“Oil and Gas.”
The phenomenal demand on these resources is set to grow at dis-proportional rates, with oil demand
predicted to be 28% higher by the year 2035, while gas demand may see 50% growth within the same
time frame.2 Hydrocarbon exploration took to the seas in 1947 when the world’s first offshore oil
platform was built in 20 feet of water in the Gulf of Mexico.3 It has been estimated that nearly half of the
remaining recoverable conventional oil is situated in offshore fields.4 The USGS estimated that the
Arctic Ocean holds 13% of the oil and 30% of the world’s undiscovered gas reserves.2 Recent ventures
to tap the vast Artic reserves have also subjected explorers to extremely harsh environments requiring
engineering ingenuity at its best. With increasing world energy demands, exploration and development
of offshore fields will become increasingly challenging, both technically and financially, especially as
work progresses into unchartered deeper waters. A heightened sense of environmental awareness in
many societies today also poses challenges for the Oil and Gas industry to be more environmentally
neutral, compliant and friendly.
This then points to the fact. In a broad sense, the stakeholders would include academic or research
institutions where knowledge progression takes place, and the industry, where the new knowledge is
put to the test in addressing practical engineering requirements and pushing fore-frontiers. This two-
way mutual relationship is deliberated in this work alongside an actual case study of Universiti
Teknologi PETRONAS (UTP) which is an oil-major owned university in Malaysia. The authors identify
academia as a university body, and the industry as the Oil and Gas majors, service providers and
vendors. Governmental bodies overseeing the growth whilst providing support to the state-owned oil
and gas company or the consortium as a whole are also identified as part of the working parameters in
the collaboration. This working government-industry-academia collaborative group is heretofore
known as the “Consortium.”

THE NEED FOR AN INDUSTRY-ACADEMIA CONSORTIUM IN MALAYSIA

The ability to continuously innovate and provide comprehensive and effective technical and
commercial solutions to support the oil and gas industry in Malaysia is no longer an option, but more of
a necessity. As one of the dynamically growing economies in the world, Malaysia relies largely on Small
Medium Enterprises (SME) that contribute to almost 33% to the national GDP.5 The government has
recently targeted a rise in this contribution to 41% by 2020.6 In order to achieve this goal, the annual
growth for the SME contribution must be accelerated from 6.3% to 9.3%.
The Malaysian Economic Transformation Plan (ETP) specifically highlighted focus on developing
large and thriving services sectors to supplement the nation’s historical strengths in oil and gas and
manufacturing.7 With the redefinition of SME in January 2014, more firms, particularly the
aforementioned oil and gas service providers, will now be classified as SMEs.8 The SME 100 in 2010
confirmed that the key challenges facing SMEs in Malaysia are grouped into four broad groupings:
access to finance, access to human capital, access to technology and access to markets. It was
indicated that SMEs are more innovative, compared to their larger counterparts, due to their
heterogeneous nature, but are restricted in innovative capacity due to their financial and human
resources. In the establishment of an integrated Consortium, it is envisioned that these gaps will be
narrowed.
Innovation and skilled labor pools are essential for SMEs to continually grow and to remain
competitive in relation to their national and international competitors. This would not only help the
SMEs to gain market share but would also help them sustain themselves in the longer run, especially
with the coming of the ASEAN Economic Community single market commencing in 2015. That
notwithstanding, innovation is also a key instrument in providing opportunities for new inventions and
the building of new markets. Silicon Valley is a dramatic case study. Over the course of five decades, a
dense web of rich and long-running universities have emerged—industry collaborations in the region
have given rise to new technologies at a breakneck pace and transformed industries while modernizing
the role of the university.
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With the rise of a global knowledge economy, the need for strategic industry-academia partnerships
that go beyond the traditional funding of discrete programs, such as capability development, research
and development, have intensified. As an example, with the establishment of various facilities and with
the support of its Mission Oriented Research (MOR) clusters,9 UTP is now a prime link between
academia, and the Oil and Gas industry in Malaysia. As the extent of UTP’s influence continues to
widen, it is essential to promote further partnerships among universities as well as partnerships
between universities and industrial companies, governments, or nongovernmental (NGO)
organizations. This is also in tandem with the university’s mission, which is to enhance learning,
research opportunities and expertise for the advancement of engineering, science and technology to
enhance the nation’s competitiveness.

KEYS ELEMENTS OF A SUCCESSFUL COLLABORATION

Mutual benefits
Successful collaborations offer collective benefits for all participants of the Consortium as detailed in
Table 1. It aims to serve as a framework for both academic institution and industry to engage in the
co-creation of knowledge and the generation of collective impact from it. Subsequently,
government-industry-academia partnerships could be realized at a high level.

Table 1. Benefits of a Consortium10.

Benefits to Academia Benefits to Industry

† Access to resources such as latest industrial † Greater understanding of proof of concept,

technologies and best practices
† Participate in new industry standards setting
† Enhanced visibility as industry
choice academic partner
† Potential revenue generating
† Larger pool of trainees
† Attract workforce
† Collaborations with existing facilities
will allow for transfer of knowledge to local staff
and proof of mechanism through studies
with academic partners
† Access to research that may seem premature
for larger investment opportunities
† Effective matching of companies and workforce
† Effective matching of companies and
research/competency solutions
† Enhanced visibility

A clear working structure

A successful venture would require a clear school of thought regarding the hierarchical flow of
responsibilities carried by each member. The following is the summary of the encouraged business
concept descriptor of an Industry-Academia Consortium for Oil and Gas (IACOG), given in the form of a
case study from UTP’s viewpoint:10
. UTP to collaborate through a named NGO, in this case, the Malaysian Oil and Gas Service
Council (MOGSC).
. The SMEs working group is established for the MOGSC’s member companies initially at the NGO
level with expansion plans to other international SMEs identified by MOGSC, or that are
suggested by local SMEs and relevant Oil and Gas companies.
. UTP to participate in leading technical areas: training, seminar, round table discussion,
conferences, internship, staff exchanges and research consultancy.
. UTP as the main anchor and gateway for other nominated institutions in a Joint Industrial
Projects (JIP) environment.
The Consortium will be led by an internal Steering Committee (SC) to be nominated in consultation with
a parent company, which, in the case of UTP, is Malaysia’s National Oil Company, PETRONAS. The
Consortium structure and key stakeholders are as illustrated in Figure 1.

A sound business model

A sound business model will have in its wake, a string of well-defined objectives. In the case of the
formation of a Consortium, it is recommended that the objectives be governed by six premises. The
“big-six” addresses pertinent issues related to human capital development, research and technological
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Figure 1. Structure of proposed Consortium10.

advancement or know-how, knowledge sharing among the consortium members as well as the
forthcoming of knowledge and services based economy. They are detailed as:10
. Facilitate the development and transition of well-trained graduates to Oil and Gas industries as
well as related industries.
. Facilitate all valuable trainings, seminars, conferences, industry round table forums and site
visits.
. Develop strategic partnerships to access federal funding in related technology and competency
areas as well as novel solutions. This includes JIP.
. Facilitate interactions among the academic community, industry, and other selected participants
who support the oil and gas industry.
. Collectively enhance the visibility of all consortium participants, focusing attention on the
“intellectual and commercial capital” within the region.
. Create a collaborative forum to drive R&D, commercialization and adoption of oil and gas
technology and knowledge.
It is good practice that the key areas of interest for potential collaborations within the Consortium are
spelled out on proper documents. These areas are those that are mutually identified to cover the
interests of all parties in a documented round table discussion with all relevant stakeholders. Table 2
summarizes this concept, written in terms of UTP’s case study.
The business model should possess inherent sustainability that translates into effective long-term
collaboration between stakeholders of the consortium. To ensure this, based on UTP’s case study, the
establishment of the Consortium and the management for its sustainable development requires:10
. Networking and collaboration where organic relationships are developed with existing networks
of organizations, collaborations and programs to share knowledge and experiences.
. A liaison and coordinating function, which would serve as a niche coordinator for Malaysian oil
and gas organizations to accelerate government-industry-academia cooperation.
. Strong professional affiliation/certification, which will serve as a magnet for R&D activities,
competency programs and funding.
. An in-place strategy for autonomous development wherein a sense of ownership and matching
functions, allowing for autonomous development and follow-through of initiatives.

CONCLUSION
In order to be sustainable, the body of knowledge of Oil and Gas must continue to proactively evolve
with the current trends to avoid lagging behind or being obsolete. Such evolution does not happen by
chance, rather by meticulous planning for a holistic working mechanism detailing the roles and
responsibilities of identified stakeholders in a joint-academia-government-industry working group
known in this paper simply as “Consortium.” A case study based on UTP’s experience has been
presented herein. It was found that the fit-for-purpose collaborative efforts between the university and
Table 2. Identified key interest areas: UTP’s Case Study10.
No. Partnership Area
1 Capability Building
2 Internship and Recruitment
3 Knowledge Transfer
Partnership
4 Commercialization and
Support Initiatives
Proposed Scope
Competency and up-skilling opportunities (Blue Collar and White Collar):
† Support through governmental programs
† Workshop training, professional training, conference
Knowledge sharing between industry and academia in
best practices and the latest technology
Matching and placement of interns/graduate with
selected host companies
Partnership between a company and an academic institution
(‘Knowledge Base’ Partner), which facilitates the transfer of
knowledge, technology and skills to which the company
partner currently has no access. Each partnership employs
one or more recently qualified people (such as PhD candidates
or post-doctoral fellows) to work in a company on a project of
strategic importance to the business, whilst also being
supervised by the Knowledge Base Partner
Facilitates development or enhancement of competitive businesses,
leveraging on existing facilities, in the following areas:
† Technology and business incubation programmes
† Technology commercialisation assistance and support
† Sharing on best practices on intellectual property (IP) and
design methodology for SMEs
Outcomes
† Enhance UTP as the oil and gas choice university
† Allow UTP staff to expand their knowledge in the industry
† Enhance UTP network with the industries.
† Ability to conduct JIP
† Ability to influence HRDF on oil and gas sector initiatives
† Placing UTP graduates with wider choices of companies
† Placing UTP interns with wider choices of companies
† Facilities staff attachment with specific industries
† Attract future potential PG students.
† Provide industry relevant faculty members through training
† JIP research initiatives will provide the cutting edge research for UTP
† Realistic commercialization of relevant research
† Ability to provided research consultancy in a wider scale
† Ability to work on Novel Solution by UTP
Liew, Eik, Zawawi, QScience Proceedings 2015.elc2014:52
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the Oil and Gas industries are key to sustainable academic, research, and business development.
It involves one key business model with several sub-key business models in making a sustainable
collaboration model. Important sustainability elements are included in the business model plan, which
would facilitate a long-term effective venture for all stakeholders. Crucial elements defining the success
of ventures of this genre have been listed and discussed with reference made to case studies where
appropriate.

Acknowledgements
The authors would like to thank Universiti Teknologi PETRONAS for permission to publish the information
used in the case study.

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