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 713 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.
Since 1999, ROC has developed a unique set of competitive advantages and now holds a distinctive industry position for a company of its size.
ROC has established global industry relationships. Of particular importance are the existing relationships we have with national oil companies through joint ventures, including: PetroChina and Sinochem at Zhao Dong; CNOOC in the Beibu Gulf; Petronas in Mauritania; and Pertamina in Australia.
ROC has been an upstream operator for 12 years. We have the technical capabilities and skill-sets to operate across the full range of upstream business activities, from frontier exploration, through development to production and delivery. There are few other Australian upstream companies of similar size that are able to operate and deliver this full asset lifecycle performance.
We discovered, appraised, developed and now operate the Cliff Head oil field. As operator of the Zhao Dong oil fields, we have doubled facility capacity, successfully managed annual development drilling programmes since 2006 and consistently met production forecasts. We discovered and appraised the Beibu Gulf oil field, which will be developed over the next two years. We have also operated exploration programmes in challenging environments.
ROC has a clear focus on China, South East Asia and Australasia. We are aiming to sell non-core assets and to reinvest the funds into growth assets in the focus region.
Capturing Value
- Gain new growth assets in the focus region;
- Expand the China business;
- Transform the exploration portfolio; and
- Sell non-core assets.
ROC is determined to improve shareholder returns. This will require new assets, existing business expansion and asset portfolio restructuring. We have identified key focus areas where our competitive advantages can capture value.
The upstream industry in several South East Asian countries is at a crossroads. The previously overlooked development of smaller marginal fields in these countries is now becoming an important focus for governments and national oil companies. ROC considers that it has the operational experience and technical capabilities to assist in the development of such marginal fields and is actively pursuing these opportunities.
ROC’s relationship with our Chinese partners has the potential to provide business expansion. ROC is engaging with Chinese partners to assess new acreage and exploration opportunities with the aim of growing the business in this country.
Exploration will always be an important element of ROC’s activities and we are transforming the exploration portfolio – moving out of riskier deep water plays in frontier regions and focusing on existing hydrocarbon provinces where costs are lower and timeframes to monetise 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.
Once growth opportunities are identified and value is captured, ROC must ensure profitability is delivered.
Over the past few years, extracting value from our existing asset portfolio has been an important focus. The performance of the underlying business in 2010 (with the exception of the Basker-Manta-Gummy oil and gas fields – BMG) reflects these efforts. We have met production targets, increased reserves, successfully contained costs, controlled expenditures and improved commercial agreements.
We constantly strive to better our performance with regard to the safety of ROC’s people and contractors, the environment and surrounding communities. Continuing to be identified as a responsible, capable and engaged operator is critical if we are to grow the business, especially given recent industry events. Following on from our inaugural Sustainability Report in 2009, this year we have again made a considerable effort to transparently report all our health, safety, environment and community (HSEC) activities for stakeholders – refer to the 2010 Sustainability Report.
ROC has a strong risk management discipline regarding safety, environmental, community and financial issues, as demonstrated by the decision to enter the BMG Phase-1 oil project into a non-production phase.
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.
Improving the effectiveness of our business and operational processes will be a particular focus in 2011. ROC employees have a proven range of skills that need to be deployed across the business in a collaborative way. This will require some restructuring of the organisation to better facilitate communication, and to clarify roles, responsibilities and accountability.
While ROC is a nimble organisation that can move quickly to take advantage of opportunities, we also need to be aware that our capacity has limits and boundaries if we are to grow the business sustainably. Implementing fit-forpurpose internal systems and processes will assist ROC to increase our capacity.
Reinvigoration of ROC’s leadership and culture has already begun, with the appointment of Alan Linn as Chief Executive Officer in February 2011. A refreshed Executive Committee is supporting Alan in his efforts to restructure and grow the business. The clear internal communication of ROC’s strategy is a priority, to ensure the staff understand how their own objectives are integral to the Company’s ultimate goal to improve shareholder returns.