Outlook for Malaysia’s oil and gas industry looks bright

Jun 23, 2004 02:00 AM

The outlook for the Malaysian oil and gas industry looks bright, especially in deepwater and ultra-deepwater exploration, as only half of the identified deepwater exploration area has been explored.
Malaysia has an exploration area of about 600,000 sq km which contains roughly 60 blocks in shallow, deep and ultra-deep waters. Almost a third of these blocks are in the deep and ultra-deepwater areas, according to Petroliam Nasional (Petronas) statistics.

Rating Agency Malaysia Consultancy Services chief economist, Dr Yeah Kim Leng, said the outlook of the Malaysian oil and gas sector looks good in view of the current strong global demand for the commodity. The world is currently facing a shortage of oil in view of the low production by members of OPEC.
"This has led to high price of crude oil," he said.
However, Yeah said, the high oil price is not healthy in the long term as it could lead to an increase in supply, or a shift to alternative energy sources.

Yeah said the terrorism issue has also somewhat benefited Malaysia.
"Malaysia is considered fortunate as it is located in a non-sensitive area, away from the threat of terrorists. As such, it provides a reliable and secure source of oil," he said.
On deep and ultra-deepwater oil exploration, Yeah said: "It is viable to look at these areas. With proper technologies and adequate fundings, more oil can be discovered in these areas to contribute to our depleting reserves. And with the new oil discoveries and additional reserves, Petronas would be able to meet its target of a 3 % increase in oil and gas production."

For the first time ever, Petronas during the Asian Annual Oil and Gas Conference 2004 announced plans to increase its oil and gas production by 3 % a year within the next five years. A senior research and policy analyst at the Asian Strategy and Leadership Institute, Farizal Razali, said given the plan and strategy that Petronas has at present, the 3 % increase in oil and gas output per annum, is not something impossible.
"I positively think it is an achievable target, especially as Petronas is doing it jointly with other partners," he said.

But he said research and development activities need to be run actively and constantly to discover new oil fields, which is crucial to sustain Petronas’ target to increase output.
"An increase in output will mean more reserves and will increase the overall capacity of country’s oil and gas industry," he said.
He said the present outlook of the local oil and gas industry looks promising but added that output needs to be increased. With the current output as reflected in the reserves, he said this may not be sufficient enough, especially as demand for oil and gas is ever increasing.
"Demand for gas from certain industries, like electricity, will help sustain the promising outlook of the sector, but it depends on the ability to increase output. That means more explorations and discoveries need to be made," he said.

Petronas recently announced its plan to launch six new deep and ultra-deepwater oil blocks offshore Sabah and Sarawak, which it expects to award to multinationals in three or four months’ time. While there is a significant interest from multinational corporations, local firms have also indicated their intention to participate in deep and ultra-deepwater exploration.
Upbeat with the recent deepwater oil discoveries, some of the local companies are already looking at the possibilities to position themselves to play an effective and efficient role in the development of these new oil frontier.

Trenergy, for instance, indicated its intention to explore the potential in deepwater exploration, particularly in the floating, production, storage and offloading (FPSO) operations. The company has boasted of being one of the two companies which currently operate fully integrated FPSO activities through its "Perintis" vessel.
A fully-integrated FPSO is defined as having a spectrum of oil and gas-related activities from drilling to storage on a floating vessel.

Scomi Group, said to be a direct beneficiary of the deepwater findings, believes that the recent deepwater discoveries will generate a lot more activities. Scomi is said to be a direct beneficiary as it currently supplies the likes of Shell, Murphy Oil and Amerada Hess with 100 % of their drilling fluids and mud engineering. For Petronas, Scomi supplies 50 % of the national oil company’s needs.
Shell, Murphy Oil and Amerada Hess are among the few deepwater players in Malaysia. The others are ConocoPhillips, Total and Diamond Gas of The Netherlands.

Deep and ultra-deepwater exploration started in Malaysia in mid-1990s and to date, a total of 19 exploration blocks covering about 130,000 sq km has been demarcated. As at financial year ended April 30, 2004, Petronas and its partners had drilled 17 wildcat wells and has been encouraged by a success ratio of 53 %.
Oil and gas discovered to date from deepwater areas in Malaysia are between 900 and 1,200 mm stock tank barrels and 5.7 tcf respectively.

Source: Business Times
Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

read more ...
« October 2019 »
October
MoTuWeThFrSaSu
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31

Register to announce Your Event

View All Events