• 4 minutes China - EU: Xi Says Cooperation Is Mainstream In Their Ties
  • 8 minutes The Mining Industry Has Had It Easy For Far Too Long
  • 11 minutes Lawsuit-Happy Councilor Wants to Take Big Oil to Court
  • 15 minutes U.S. Shale Output may Start Dropping Next Year
  • 2 hours Dutch Populists Shock the EU with Election Victory
  • 17 hours Venezuela Says Russian Troops Land to Service Military Equipment
  • 1 hour Trump to Make Allies Pay More to Host US Bases
  • 7 hours Multi-well Pad Drilling Cost Question
  • 2 hours 3 Pipes: EPIC 900K, CACTUS II 670K, GREY OAKS 800K
  • 17 hours U.S.-China Trade War Poses Biggest Risk To Global Stability
  • 32 mins Public Companies that attended OPEC "THREAT DINNER" at CERRAWEEK must disclose any risks in their SEC Financial filings.
  • 38 mins England Running Out of Water?
  • 5 mins Read: OPEC THREATENED TO KILL US SHALE
  • 1 day One Last Warning For The U.S. Shale Patch
  • 1 day European Parliament demands Nord-Stream-ii pipeline to be Stopped
  • 2 days Climate change's fingerprints are on U.S. Midwest floods
  • 2 days Modular Nuclear Reactors
Alt Text

How Big Oil Could Become Big Electricity

Big oil has big plans…

Alt Text

Trump’s Last Chance To Subdue Gasoline Prices

Quickly rising gasoline prices are…

Alt Text

Oil Markets Ignore Warning Signs Of Looming Recession

Despite the plentitude of warning…

Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

Trending Discussions

Independents Replace Big Oil In Southeast Asia

Energy independents and Middle Eastern and Asian companies are expanding their presence in the Southeast Asian oil and gas industry, replacing Big Oil majors that have been shrinking their exposure to the region since the 2014 oil price collapse.

In the last four years, international oil companies have sold almost 800 million barrels of oil equivalent in Southeast Asian assets, Wood Mackenzie says, adding that they have been replaced by a string of East Asian conglomerates and Middle Eastern ones.

It seems that international oil players are still shunning higher-risk locations such as Southeast Asia, focusing instead on their new top priorities: low-cost, higher- and faster-return projects in the U.S. shale patch or offshore in high-promise locations.

Since nature abhors a vacuum, their place is being taken by companies with a higher risk tolerance, such as Japanese JXTG Nippon and Mitsubishi, the Kuwait Foreign Petroleum Exploration Company, Indonesian MedcoEnergi and Saka Energi, Singapore-based KrisEnergy, and Malaysian Sapura Energy.

These companies, along with other local or regional players, says Wood Mac, have bought over 600 million boe worth of reserves from the supermajors leaving the region, and production from fields owned and operated by Middle Eastern and Asian companies has doubled to over 675,000 barrels of oil equivalent daily over the last four years.

Southeast Asia may no longer be as attractive as it once was for international oil companies, but its oil demand is growing and production peaked in 2010 at 5.9 million boed. Today, more than two-thirds of this production comes from mature and mid-life fields, and new discoveries are a rarity.

Meanwhile, regional oil demand is growing and will continue growing until at least 2040, the International Energy Agency has forecast. A 66-percent increase in cars on the road, the IEA said last November, will drive a spike in oil demand to 6.6 million bpd by 2040, from 4.7 million bpd at the time. That’s despite the increasingly global push away from internal combustion engines and towards EVs. Related: China Just Doubled Oil Shipments To North Korea

For Southeast Asian governments, this is a serious problem and, says Wood Mac senior research manager Ashima Taneja, “governments and regulators must question whether they are doing enough to attract investors that are looking to grow and diversify. If not, the region will be bereft of players that can help the NOCs fill the major gap."

The challenges for investors include tough financial requirements, unfriendly regulation, and a not too encouraging exploration results track record. There is also the issue of booming resource nationalism, which is a major obstacle for foreign investors. Reconciling these issues with the need for more foreign investments into the region’s oil and gas resources does not look like an easy task.

Still, the news is not all bad. Earlier this year, Rystad Energy said that as many as 50 oil and gas fields in Southeast Asia containing about 4 billion barrels of oil equivalent will be approved for development between this year and 2020. These will require total investments of some US$28 billion from final investment decision to first production, the consultancy said.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News