Petronas E&P business advisor, Datuk Mohamad Idris Mansor, said the development spent in this region in deepwater was set to grow with the upcoming Kikeh oil field development, followed by the Kebabangan oil and gas development.
He said this during his keynote address at the Petromin Deepwater Technology Conference themed 'Opportunities & Challenges' in conjunction with the Asian Oil, Gas and Petro-Chemical Engineering exhibition (OGA) 2003 here Monday.
The recent discovery of the Kikeh oil field by Murphy Oil, 1,200m under water, had created a lot of international attention and excitement on deepwater prospects offshore Sabah and Sarawak.
He said Kikeh was touted to have an upside potential of 600 to 700 million barrels and drilling targeted for 2007.
Kebabangan oil, with reserves of more than 100 million barrels, has added to the excitement.
Industry analysts had predicted that deepwater production globally was expected to rise sharply and hit eight million barrels of oil equivalent per day (boe/d) by 2007 from the current levels of 2.5 to 3.0 million boe/d.
Mohamad Idris said capital expenditure on deepwater had seen a steep upward trend throughout the 1990s and had since been growing steadily.
"It is expected to hit US$15 billion in 2003," Mohamad Idris said.
This magnitude of capex was expected to develop reserves at US$3 to US$4 per boe which would bring the development costs of deepwater not very far off the convention development costs that the industry was used to.
The forum of international panel of deepwater specialists at the 16th World Petroleum Congress in June 2000 in Calgary, Canada, postulated that the industry would spend about US$76 billion to find and develop about 19 billion boe in deepwater around the globe through 2004.
About 80 percent of these reserves were expected to be developed in the more established deepwater sites off West Africa, Gulf of Mexico and offshore Brazil.
"Deepwater exploration and development is highly technical and capital intensive, and host countries would welcome the opportunity to learn and build capability with the help of the experienced oil companies," Mohamad Idris said.
For this region, the renewed focus in this area will provide an excellent opportunity for local participants in the industry to work and build up deepwater capability.
As the global industry matures and moves more and more into deepwater, these skills and expertise would become a key factor for success and perhaps continued survival, he said.
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