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IEA: Huge Oil Glut Coming In 2020

IEA: Huge Oil Glut Coming In 2020

While oil supplies are set…

Asia's Oil Majors Look to North America for Oil and Gas

The price difference between North American natural gas and that in Asia has attracted many Asian firms, such as PetroChina Co., Mitsubishi Corp., and Cnooc Ltd., to invest in the Canadian oil and gas industry. So far this year, over $8.7 billion worth of deals have been announced in Canada, the most since 2009 when the total reached $47 billion.

The price differential was partly what attracted Petroliam Nasional Bhd (Petronas), the Malaysian state-owned oil company, to Canada, where it is now in the process of negotiating an acquisition exceeding $5 billion; its largest ever deal.

Petronas is motivated to enter foreign developed markets due to the high demand from its customers that can be guaranteed for years. Buyers of Petronas’s gas such as Japan, South Korea, Taiwan and China are keen on stability in their supplies, and this stability cannot be assured from sources in the Middle East. Shamsul Azhar Abbas , the CEO of Petronas, said, “I want to grow big in Australia and Canada. In terms of country risk, it’s less” than those in the Middle East. “When we mentioned we have projects in Iran, Iraq or whatever, to bring in LNG from there, is it acceptable to them. They said no. The Middle East issue is going to linger. I don’t see a long term solution there.”

Petronas will own 80 percent of an LNG terminal to be developed in the Canadaian West Coast, just one of just three planned in Canada. A group consisting of Royal Dutch Shell Plc., PetroChina, and others, are set to build one terminal, and another group, led by Apache Corp., will build the other.

“By August we should be able to complete the feasibility study for another liquefied natural gas plant on the west coast of Canada,” said, Shamsul Azhar Abbas. “We are getting good support from the government.”

By. James Burgess of Oilprice.com



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