Asian Oil, Gas Producers Stepping Up Activity After Long Lull
KUALA LUMPUR, March 23 (Reuters) - Asia's oil and gas producers are starting to revive projects aimed at deflating years of ballooning energy imports after new investment dried up following the 2014 industry crisis.
Spending has so far been driven mainly by state oil companies such as India's ONGC, Thailand's PTTEP and PetroVietnam, which need to produce more oil and gas to ensure their countries' energy security, executives said this week during an industry event in Kuala Lumpur, Malaysia.
Asia is by far the biggest, fastest-growing consumer of oil, yet its output is falling faster than in any other region. That mismatch more than doubled Asia's oil import bill to around $500 billion last year, compared with year 2000 levels.
With oil prices back above $60 per barrel and at times flirting with $70 a barrel, oilfield service providers say there is renewed appetite for producers to spend and importers to cut import bills by investing in production.
"Asia is a net importer of energy. I think there's a strong desire from Southeast Asian organizations to change that trend. We'll see a lot more potential developments here to try to balance that equation," said Ian Prescott, vice president for Asia with U.S. engineering company McDermott.
Fifty oil and gas fields in Southeast Asia, with a collective 4 billion barrels of oil equivalent in resources, will likely be approved for development between 2018 and 2020, according to consultancy Rystad Energy, requiring some $28 billion of capital expenditure from final investment decision (FID) to first production.
Spending Revival
In one sign of revival, Abu Dhabi-owned Mubadala Petroleum, Malaysia's state-owned Petronas and Anglo-Dutch oil major Royal Dutch Shell agreed to spend $1 billion on a shallow-water gas project in Malaysia this week.
In India, changes to gas pricing policies revived activities in its eastern deepwater fields, led by ONGC and a joint venture between Reliance Industries and BP.
"India has waited too long to enter deepwater. Deepwater development makes more sense for the country (India) than importing LNG at $8 per million British thermal units," Ashish Bhandari, a vice president at GE-owned oil service company Baker Hughes, said at the OTC Asia conference.
In Southeast Asia, PetroVietnam is developing a large gas field known as Block B, while Thailand's PTTEP is on the hunt for more gas supplies in the region to meet demand in Thailand and Myanmar.
Despite the uptick in activity, exploration for new oil and gas remains lower in Asia than elsewhere, especially onshore North America and in the Atlantic basin.
Kevin Robinson, vice president of Malaysia's oil and gas service company Sapura Energy, said the main factors deterring investment in Asia were tough fiscal regimes, cumbersome bureaucracies, and maturing fields with limited future reserves.
"It's a reality check for governments in Asia to look at how much investment they are getting, and how they need to improve their fiscal terms to attract more investment," Robinson said.
ONGC's director of offshore, Rajesh Kakkar, said the "easy oil is gone ... what is left is deepwater, high pressure, and high temperature", making extraction more costly.
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- I Squared Eyes Full Ownership of Europe Gas Storage Firm
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension