Higher oil prices to spur interest in Malaysian deepwater exploration

Nov 02, 2004 01:00 AM

The recent rise in global crude prices is set to spur stronger interest in exploration and production by oil companies in Malaysia's deepwater areas, especially in the light of new oil finds, says Tee Boon Teong, project director for OSEA 2004, Asia's largest oil and gas trade exhibition.
Against the relatively bright outlook for the oil and gas sector, Tee said 46 companies from Malaysia have been drawn to participating in OSEA 2004 to expand their businesses.

With world demand for crude oil now running at 82 mm bpd while supply is slightly higher at 82.3 mm bpd against a backdrop of crude oil prices having risen to $ 55.67 from $ 40 just a few months ago, he said the incentive to explore new oil and gas fields had increased.
"The Asian Development Bank (ADB) has also forecast that the oil and gas sector figures prominently in attracting foreign direct investment (FDI) to Malaysia in the short term. The bright outlook for the oil and gas industry will certainly spark off new contracts and projects for domestic oil and gas servicing companies," he said.

Malaysia, which has been regarded as an important matured oil and gas producer, would present tremendous opportunities for companies looking for business opportunities in the oil and gas sector, Tee added.
Malaysia's gas reserves are three times the size of its oil reserves. Its crude oil reserves are 24th largest in the world and its gas reserves are ranked 13th largest in the world. As at Jan 1, 2004, Malaysia's crude oil reserves (including condensates) stood at 4.841 bn barrels and natural gas reserves stood at 87 tcf or 14,504 mm boe. Altogether Malaysia has total domestic reserves of 19.345 bn boe: 75 % gas and 25 % oil.

Tee said the Malaysian government's forward-looking policies spawned a strong national oil corporation in Petronas, Malaysia's only Fortune 500 company, which is also one of the world's top oil and gas-producing companies.
Although new shallow water oil and gas discoveries were still likely, he said deepwater exploration would likely become the focal point of Malaysia's upstream industry in the future.

In Malaysia's upstream sector, an estimated $ 2.88 bn (about RM 10.94 bn) was spent in 2003/04 and this was almost similar to the level of investment in 2002/03.
"Medium-term strong regional demand for energy and the expectation of sustained high petroleum prices could offer Malaysia tremendous economic opportunities. Given that Malaysia is a net oil exporter, it will certainly benefit, to some degree, from the higher oil prices because higher prices and demand would encourage new investments," said Tee.

Source: Bernama
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