EmmaGoodEgg

Portraits Of Modern Brunei: Max, The Oil and Gas Contractor

Max (not his real name) is a youthful 60 year old former soldier, who by any measure, can be said to have done pretty well for himself and his family in the oil and gas industry. This is a result of hard work, education, common sense and a whole lot of application (and as he says maybe a little bit of luck).

The company he started 12 short years ago as a one man show in the room above his garage, hustling for contracts in the oil and gas industry, in 2012 now handles multi-million dollar contracts. His company has 186 on a permanent payroll, and depending on seasonal requirements, can be responsible for up to 530.

His tale is one that anyone should be proud of.

In 1971 and at the age of 17 he entered as a cadet with the Armed Forces. It was his good fortune to be mentored by officers who felt (perhaps against the conventional  thinking of the time) that it would be a good idea to see to the higher education of army officers.

The Armed Forces afforded him education and training that otherwise may not have been available to him. During his 25 years in the Armed Forces, he managed to travel to the Staff College in Malaysia, undertook a postgraduate diploma and completed a Masters Degree researched in Leningrad on International Relations. The Masters Degree coincided with the time of Soviet Perestroika and Glasnost. His tutors almost failed his Masters thesis in 1988 for his impudent view that the Berlin Wall would fall. Which it did, a year later.

After 25 years in the military, with his last position being in a job that he is not at liberty to speak about, he retired in 1996 at the grand old age of 42.

As a 42 year old retiree he had a number of options. To play golf, try to find some government work, or go do something in oil and gas. Well he did try some government work, but found the politics unnerving. With ingrained military acumen he concluded that the oil and gas industry, which makes up 95% of the country's economic activity would have a place for him.

He started helping out a relative to salvage a private sector contract that had gone bad, gaining some knowledge in the way that things work. In 2002 he gained his first contract, along with an overseas principal, managing materials for sub strata surveys in the up stream industry. As time went on he took on more people and more work. The company headquarters in Sungai Bera is a full on industrial facility. His work has expanded to the supply of sophisticated equipment and machinery and serious technology.

He is by no means the largest local oil and gas contractor, but he has carved out a substantial and comfortable niche for himself and his family.

While obviously he has had no high technical education, a Masters in 'Sino-Soviet Detente' certainly equipped him to deal with the ins and outs of bureaucracy. And I guess knowing how to drive a tank may have given him certain basic technical skills. But I think what has been useful to him has been the ability to gain knowledge and giving order to it. The research degree would have equipped him with skills for the independent acquisition of knowledge and the intellectual rigor required to formulate and defend his views. To me it just goes to show that with the right attitude and a  willingness to learn, anything is possible.

With 95 percent of his workforce local, Max is a big believer of local business development and is grateful for the government's policies in this respect. He is proud of the fact that his company now competes with international firms for contracts, and is equally proud of his team. Indeed he believes that the most valuable asset for a company is its human resources. "Invest in your people, just like a country. Get the right people for the right job", he told me.

Finally one should not discount the importance of flexibility. I am not sure if he was quoting Sun Tzu's "Art of War" when he said, "I firmly believe that if you cannot get them through the front, then you take them from the back"...

@emmagoodegg

Illustration by Cuboi Art.

For the online version click here.

Easy Come Easy Go

For years, the now disgraced Texas financier, Robert Allen Stanford, led a glamorous jet-setting lifestyle in the Caribbean. He received a knighthood from Antigua in 2006, funded a cricket league, and ran airlines, newspapers and banks. His wealth ran into the billions.

Once known as one of the richest men in the United States, Stanford is currently on trial in Houston, Texas for allegedly masterminding a 7 billion US dollar fraud and one of the largest Ponzi schemes ever orchestrated.

In a Ponzi scheme, potential investors are wooed with promises of unusually large returns, usually attributed to the investment manager’s savvy, skill or some other secret sauce.

The returns are repaid, at least for a time, out of new investors’ principal, not from profits. This can continue as long as new investors line up with cash, and old investors don’t try to withdraw too much of their money at once.

Ponzi schemes are also known as pyramid schemes, from the shape of any chart that reflects their basic premise — that ever-growing layers of new recruits are needed to provide gains to the smaller, earlier cohorts.

Even in our peaceful corner of the globe, our community has not been spared from this type of fraudulent activity. What is distressing is that for a small community such as ours, we seem to be subjected to instances of this type of phenomena much too regularly. It is almost as if we never learn.

About 11 years ago, I can recall a big fuss over an outfit in Jerudong, which promised high returns on capital, but which allegedly siphoned out these funds, leaving many “investors” high and dry.

In 2010, the directors of “Pan Phoenix Dina” were successfully prosecuted, the first of its kind under the Banking Order 2006, of illegal deposit taking. That case involved 5.7 million Brunei dollars from 269 people. Their activities lasted for 7 months in Brunei, meaning that almost a million dollars a month was collected and channeled back to investors, with the “managers” skimming off the top. There was also a Malaysian side to this organization, who where also charged in Malaysia.

In my consultation with The Google, I came across a Wordpress blog that in 2007 posed the simple question about “Dina”, “Anybody knows about this Investment?”. This elicited 565 responses ranging from, “hold on to your wallet”, to passionate defenses of their credibility. The last forlorn response dated February 2010, bids salam to all and states that the poster is “still waiting for my money to be refunded.”

The saddest thing in these types of scheme is when the people who can least afford to lose their money get involved. Usually, they are also those who come in later, and are more likely to lose out, as early “investors” have been paid off. It is perhaps important that these schemes are stopped before they get too big: the larger the pyramid, the greater the fallout. Unfortunately, action tends to only get taken if a complaint is made, by which time it is too late.

What is it with get rich quick schemes? Obviously it is human nature to hope to receive plenty with the least effort. Perhaps we do not do enough to encourage or appreciate that the only guarantee for the creation of wealth at the end of the day is prudence and hard work.

@emmagoodegg

Illustration by Cuboi Art.

For the online version click here.