Michael Lawson, Partner, King & Wood Mallesons
1 February 2016
What are your strategic priorities and growth targets for the next 12-24 months?
Being able to collaborate with the leaders of this industry to ultimately unlock new opportunities for our clients and promote innovation, development and growth in the oil & gas sector.
Where do you see the greatest opportunity in the O&G market and how are you positioned to capture this opportunity?
With China projected to replace the United States as the world’s largest consumer of liquid fuels by 2035, the long-term industry fundamentals and opportunities in Asia remain strong.
We are seeing a range of new entrants in the Chinese oil & gas market – ranging from private equity firms to commodities traders, and from foreign specialist services companies to Chinese privates and conglomerates. Notable legal developments in the sector have also contributed to the opening up of investment opportunities for international companies in China.
We’ll be talking about small scale LNG during the assembly and I think the opportunities in this sector, particularly in Asia, are significant. I think events such as the establishment of the ASEAN Economic Community and the formation of the Asian Infrastructure Investment Bank, together with small scale LNG plays, might help provide renewed impetus for comprehensive natural gas pipeline connectivity in the ASEAN region, in turn creating significant opportunities for the development of one or more regional trading hubs as well as broader implications for economic development and integration of the ASEAN region.
Unlike other international firms, we’re not “investing” in Asia, it’s our home. We open doors and unlock opportunities for clients as they look to unleash the fullest potential of the Asian Century.
What do you foresee as the greatest challenge to our industry's future growth?
The industry obviously faces a number of challenges at the moment. Lower prices and increased cost pressures, shifts in supply-demand fundamentals, the emergence of new trading patterns, complex and varied (and, in some cases, inadequate or inappropriate) regulation across jurisdictions are just a few examples.
Of course, the industry has dealt with a good number of these challenges before. A key question this time is about what structural and long term impacts the push towards renewable forms of energy will have (certainly the questions about peak oil have gone away!). That said, it’s difficult to mount a cogent argument that oil & gas will not continue to be a very significant part of the world’s energy supply for a long time to come. Despite the challenges, long-term Asian demand for oil & gas is forecast to continue growing and the fundamentals remain strong for opportunities and investment in the sector.
These are tough market conditions with depressed oil prices and global reductions in capex and workforce, what measures and practices are you putting in place to adapt to this new (but not unknown) working environment?
We are extremely mindful of the pressures on our clients in the oil & gas industry. Our ability to think outside the box to develop creative solutions keeps us ahead of the market.
Changing market conditions do not alter our core vision and values. King & Wood Mallesons prides itself on putting our clients at the centre of everything we say and do. We prioritise forming and maintaining strategic relationships and work together to deliver excellence and innovation. Innovation is increasingly important in less favourable market conditions – as much for professional service providers like us as for for oil & gas explorers and producers. This might be reflected in our approach to pricing but it’s as likely to be found in the ways we create value for our clients, through knowing their businesses back to front and helping to optimise the efficiency and flexibility of their projects, deals and contractual arrangements.
If you could wave a magic wand over the global industry, what would you change and why?
Short termism. It’s an age old issue, and by no means unique to our industry, but I would love to change the relatively short term thinking which tends to overcome many of us at times (in good times and bad), particularly in the heat of deal making.
We can see the impact in the LNG industry right now – customers are following the quite understandable impulse to drive down prices and are generally not committing to long term deals. The natural supply side response is to cease or delay the sanctioning of upcoming projects. The responses make a lot of sense in the short to medium term but it’s quite likely we’ll see things bite (and bite hard) in the other direction in five or six years’ time. It would be great to see more long term, collaborative (and novel) approaches pervade the industry as it moves through this critical phase in its still relatively youthful life cycle. The US Gulf coast projects’ approach to structure and pricing is an important step on the road but there is still room for further innovation in the way projects and offtake deals are structured, to provide sufficient certainty for long term investment while preserving and even enhancing flexibility for both supplier and customer.
How would you describe your company in once sentence to a new investor/client?
King & Wood Mallesons’ network of partners are located in the world’s major financial centres and growth capitals of Asia – we are uniquely positioned to connect Asia with the rest of the world and unlock opportunities for clients who are looking to invest in Asia.
How did you come to be in the O&G industry?
A wisdom tooth…A decade ago, my practice was largely in telecommunications and other infrastructure work. One fateful day, a colleague went down with an impacted wisdom tooth. He was working on a very large oil & gas M&A transaction which was due to be signed imminently. I stepped in and haven’t looked back since. That (now former) colleague is still a good friend and I owe him (or his wisdom tooth) a great deal.
What is your proudest work-related achievement to date?
Being involved in the KWM team which helped BG to structure and implement the world’s first CSG to LNG project in Queensland, Australia (QCLNG) was immensely satisfying. Leading the team which helped BG to execute the sale of a further stake in QCLNG and portfolio LNG supply to CNOOC is also right up there. I am also very proud of the successful start-up of our Singapore office over the past 12 months (and the fantastic team which has achieved it).
What one businessman/women do you admire most and why?
Among quite a number, I’d pick Alan Mulally (retired Ford CEO) as a particular standout. From 2006 (through the GFC, where Ford did not fall back on bailouts or bankruptcy), he turned around 30 years of losing market share to foreign car makers. With a collaborative approach, he led a restructure of Ford’s global operations, the creation of a new product lineup, a revitalisation of its customer relationships and made Ford one of the world’s most profitable and respected car makers. No one hit wonder – he’d done similar things at Boeing before.
What was the wisest advice you received from a mentor?
I’m fortunate to have received a lot of great advice from many quarters. One piece I like to remind myself of often is to “be comfortable being uncomfortable”. You can apply this to much more than just business but, in that context as much as others, putting yourself in uncomfortable positions, and then embracing the feeling, is a great driver of development and growth.
What advice would you pass onto a recent graduate embarking on a career in O&G?
Work hard, work smart, be open to and embrace the wonderfully diverse range of opportunities and challenges the industry offers globally. And learn to be comfortable being uncomfortable!
How and where do you prefer to spend your spare time?
Hanging out with my three young sons while they still look up to me (the window is closing rapidly). Anywhere and anytime but I’d pick a ski field if all options were open.
What is your all-time favourite book?
I should probably name a classic but, when I get the time, I really like a good crime novel. Peter Temple (an Australian author) is a particular favourite. The Broken Shore and Truth are two particularly good reads.
What is you all-time favourite film?
I’ve had a lot of “all time” favourites over the years – they tend to last only for a year or two. The current titleholder might be Richard Linklater’s “Boyhood” – an epic film on a number of levels.
What three items would you take with you to a desert island?
A very large luxury yacht (with crew and plenty of fuel), a satellite phone and a year’s supply of food. The trip back from the island would be slow and a lot of fun.
About Michael Lawson
Michael Lawson is a leading energy, resources and projects Partner based in Singapore. Michael is an expert on all aspects of the LNG supply chain and has advised on some of the region’s most significant oil and gas projects.
He has assisted clients deliver world firsts, such as the world's first coal seam gas to LNG project – QCLNG, and executed megadeals, such as co-leading a team on BG Group’s US$2 billion sale of a further interest in the QCLNG project and 20 year supply of 5 mtpa of LNG from BG’s global portfolio. In 2014/15, Michael spent 10 months seconded to BG as Principal Counsel within its GEMS (trading and marketing) business headquartered in Singapore.
Michael also has broad experience covering energy and infrastructure projects and in the telecommunications and agribusiness sectors in a variety of Asia Pacific jurisdictions. Clients looking to unlock opportunities in Asia rely on Michael’s commercial advice to help them navigate regional complexities and adapt to market changes.