Roc Oil Company Limited (ROC) is one of Australia's leading independent upstream oil and gas companies.
Incorporated in Australia, ROC listed on the Australian Securities Exchange (ASX) in 1999. ROC currently has approximately 682.5 million shares on issue.
The Company has a global workforce of approximately 180, located mainly in the Sydney and Beijing offices.
ROC’s strategy for growth and providing positive shareholder returns is based on leveraging its unique set of competitive advantages and distinctive industry position to:
1) Generate Opportunities
2) Capture Value
3) Deliver Excellence
4) Enhance Effectiveness
Generating Opportunities
ROC’s strategy for generating growth opportunities is based on leveraging its:
- Unique competitive advantages and distinctive industry position;
- Technical capabilities and operating experience;
- Established industry relationships; and
- Regional focus on China, South East Asia and Australasia.
ROC has a unique set of competitive advantages and holds a distinctive industry position for a company of its size.
ROC has established global industry relationships. Of particular ongoing importance are the existing relationships we have with National Oil Companies through joint ventures in our focus region, including: PetroChina and Sinochem at Zhao Dong; CNOOC in the Beibu Gulf; and PETRONAS in Malaysia.
ROC has been an upstream operator for 13 years and presently operates 25,000 BOEPD of production from two offshore assets.
We have the technical capabilities and skill-sets to operate across the full range of upstream business activities, from exploration, through appraisal and development, to production and delivery.
ROC has a clear focus on China, South East Asia and Australasia.
There are few other Australian upstream companies of a similar size capable of delivering this full suite of services.
Capturing Value
- Gain new growth assets in the focus region;
- Expand the China business;
- Transform the exploration portfolio; and
- Sell non-core assets.
Achievements in 2011
- Awarded the Balai Cluster RSC in Malaysia;
- Expanded the existing business in China through additional Zhao Dong Blocks; and
- Exited non-core African assets.
Improving shareholder returns is the motivating driver for implementing ROC’s renewed growth strategy. The key to improved shareholder returns will be securing new value-adding assets, expanding the existing business and restructuring the asset portfolio.
In 2010, we identified key focus areas where our competitive advantages could potentially capture value – most notably, upstream industries in several South East Asian countries where the development of smaller and marginal fields was becoming an important focus for governments.
In 2011, ROC was awarded a Risk Service Contract (‘RSC’) for the Balai Cluster of fields, offshore Sarawak in Malaysia – only the second such contract awarded in the country. Securing the RSC supports our view that ROC has the operational experience and technical capabilities to assist in the development of marginal fields and also vindicated the strategy of actively pursuing such opportunities.
ROC’s relationship with our Chinese partners has the potential to provide significant value growth for the business. In 2011, ROC engaged with our Chinese partners to assess new acreage and exploration opportunities in China. ROC was awarded two blocks adjacent to the existing Zhao Dong asset, increasing our acreage position in the Bohai Bay by 150%.
While exploration remains an important element of ROC’s activities, in 2011 we refreshed the exploration portfolio by exiting our African assets and focusing on hydrocarbon provinces within our focus region, where costs are expected to be lower and timeframes to generate cash flow from and discoveries are shorter.
Delivering Excellence
- Continue to exploit the existing reserve base;
- Exercise commercial and financial discipline;
- Strive to be a leader in HSEC and sustainability; and
- Implement effective risk management.
Achievements in 2011
- First profit since 2005;
- Production and costs within guidance;
- Continuous improvement in safety metrics
Once growth opportunities are identified and value is captured, ROC must ensure profitability is delivered.
This was achieved in 2011 and ROC posted its first profit since 2005. The performance of the underlying business was solid: production targets were achieved; costs were successfully contained; and expenditures were controlled.
ROC also continues to enhance the existing reserve base. An example of our ability to extract more value from the assets in the portfolio is the end of year reserve increase at Zhao Dong, which represented a 78% replacement of 2011 production.
Continuing to build on our reputation as a responsible and capable operator is critical if we are to grow the business, especially given industry incidents over the past few years. In 2011, we improved our performance with regard to the safety of ROC’s people and contractors, the environment and surrounding communities: we experienced no Lost Time Injuries during the year; loss of containment incidents were reduced by 25%; and the Asset Integrity Management System was implemented. We have again made a considerable effort to transparently report all of our health, safety and environment (‘HSE’) and community engagement activities for stakeholders – refer to the 2011 Sustainability Report.
Enhancing Effectiveness
- Improve the deployment of our employees’ range of skills across the business;
- Shape the organisation for sustainable growth;
- Utilise appropriate systems and processes; and
- Reinvigorate the leadership and culture.
Achievements in 2011
- Reinvigorate leadership and management team;
- Establishment of an office in Kuala Lumpur and relocation of the CEO; and
- Expansion of the new ventures and business development unit.
Improving the effectiveness of our business and operational processes was a particular focus in 2011.
ROC employees have a proven range of skills that need to be effectively deployed across the business in a collaborative way. The deployment of experienced staff throughout the business was a particular challenge during 2011, as growth opportunities in the focus region were reviewed and secured. Restructuring the organisation to accommodate these opportunities included the establishment of an office in Kuala Lumpur and the expansion of the new ventures and business development unit.
Reinvigoration of ROC’s leadership and management team was an ongoing process throughout 2011 and commenced with the appointment of Alan Linn as Chief Executive Officer (‘CEO’) in February. As ROC’s industry relationships in the focus region strengthened during the year, particularly in Malaysia and China, a critical decision was made to relocate the CEO to Kuala Lumpur in September. The Executive Committee membership has been refreshed and key senior positions filled during 2011 included the Chief Operating Officer and several appointments to the new ventures and business development unit in locations across the business.