M&As, JVs proliferate with resurgence of Southeast Asia’s Oil and Gas clout

SINGAPORE (20 June 2011) – Speaking at the World Economic Forum (WEF), Indonesian President Susilo Bambang Yudhoyono predicts Asia as the continent of the future. Following through, national oil companies from across Asia come together with counterparts from the Middle East, Africa and Latin America at the Production Optimisation Week Asia (25-29 July 2011, The Westin Kuala Lumpur) to map out technical and commercial strategies to increase production levels and meet the world’s growing energy demands.

The President also mentioned that Asia’s growth will put it at the heart of the global economy. With economic growth and progress sweeping across the region, it is no wonder that there is a resurgence of Southeast Asia’s oil and gas industry accompanied by proliferation of joint ventures and mergers and acquisitions as the region scales up on expertise and technology to better meet future energy needs.

Karen Agustiawan, chief executive of Pertamina spoke of the company’s aspirations of shaping the global energy business as one of the best 15 oil companies in the world on the sidelines of the World Economic Forum (WEF) held in Jakarta. She added that, “Our strategy in increasing upstream production is focusing on domestic operations, aggressive international expansion and improving our capability through strategic alliances”. She further mentioned that, “Our focus is on domestic operations. Some of our [oil] fields are mature. It is natural that production at mature fields declines, so we will use sophisticated technology, such as secondary recovery alternative methods to retrieve oil such as water or gas flooding”

In Malaysia, Southeast Asia’s regional energy security framework is further consolidated. Joint ventures facilitating expertise and technology upgrades are taking place between foreign and local partners. London-listed Petrofac teamed up with local players, Kencana and SapuraCrest to form a consortium to develop the Berantai marginal oilfield. German BASF group is partnering Petronas Chemicals in conducting feasibility studies on a RM60.3 billion (US$20 billion) integrated downstream oil and gas complex in Pengerang, Johor while Sweden’s Lundin Petroleum or its subsidiary, Lundin Malaysia B.V., has agreed with Petronas Carigali Sdn Bhd to operate Block PM307 offshore Peninsular Malaysia. Outside of Malaysia, Petronas Nasional Bhd has acquired a RM3.35 billion (US$1.1 billion) stake in Canadian Progress Energy Resources Corp.

Presently, the PNOC Exploration Corporation (PNOC EC), a subsidiary of the Philippine National Oil Company (PNOC), has 18 sites up for tender to raise production levels and bolster energy security. Later this month, the government will formally announce the areas for oil and gas exploration and development under the Philippine Exploration Contracting Round (PECR) for the year. Cambodia is also developing capacity upstream besides providing assistance to companies in hydrocarbon exploration. The Cambodian National Petroleum Authority (CNPA) has commissioned Petroleum Geo-Services (PGS) to serve as advisor, coordinating data centres in Phnom Penh, Singapore and London.

So far, Brunei and China have been in talks to form a joint exploration project. Potential areas of cooperation include exploration, downstream and refinery. Keen to establish a logistics base in the Sultanate, China National Oil Corporation Ltd (CNOOC) is conducting detailed discussions with Brunei National Petroleum Corporation (PetroleumBRUNEI). Moreover, PetroleumBRUNEI has commissioned Tap Energy (Borneo) Pty Ltd, Triton Borneo Limited, China Sino Oil Company Ltd and Jana Corp Sdn Bhd in the Block M Joint Venture to drill the first well since 1988.

Recent Thai developments include approval for development of the Zawtika, Kakonna and Gawthaka fields by the PTT Exploration and Production PLC. Earlier, the International Finance Corp (IFC) pledged RM75 million (US$25 million) in support of oil and gas exploration activities in Thailand and Laos. IFC, a shareholder of Salamander Energy PLC, London-based, independent producer operating out of Southeast Asia, acquired a minority stake in the Savannakhet production-sharing contract in western Laos. The Laotian project is said to spur local O&G development whilst serving high demand in the Mekong River Delta.

Reflective of the region’s upsurge in energy demand, Jose Rene D. Almendra, Philippine energy secretary said that, “Our job is to accelerate the development. A bidder may give a very high proposal but it would take 20 years to develop. I’d rather give it to somebody who can do it for three years, as we need the energy as soon as possible”. Hence, in wooing partners, prospective bidders should ensure that they have the winning combination of expertise and financing.

Keppel Shipyard, for one, secured a fast-track project for upgrading a FPSO vessel from Petrofac International (UAE) LLC largely based on the repute of its expertise. Nelson Yeo, Managing Director (Marine) of Keppel O&M said that, “These new contracts reflect the confidence of our customers in the capabilities of the Keppel O&M group. Looking ahead, I am confident that we will continue to strengthen the mutual trust and partnership with SBM Offshore and Petrofac with Keppel’s commitment to quality and reliability.”

These various developments across the region signal a coming of age of Southeast Asia’s O&G. With Middle East’s constant unrest, OPEC’s recent acrimonious talks and economic stagnation across U.S and European markets, it is time independent E&P companies and national oil companies (NOCs) begin parking investments in the “continent of the future” and have a resurgence of their own.

With the resurgence of Southeast Asia’s oil and gas industry, we need to ask:

• Are we optimising production and exploration activities?

• How can we enhance upstream, domestic production?

• Are we developing proprietary technologies for enhanced oil recovery?

• What is our role in the global energy business?
Production Optimisation Week Asia Welcomes Dr. Ing. Evita Legowo, Director-General, Oil & Gas, Ministry of Energy and Mineral Resources, Indonesia and Mr. Aftab Ahmad Khan, Executive Director, Oil and Natural Gas Corporation, India


With the recent affirmation of the Indonesian government on its aim to increase oil production to one (1) million bpd over the coming years by offering new exploration rights and encouraging enhanced production from existing wells with its fresh incentives to oil and gas investors and ONGC Rajahmundry Asset’s over-achievement of its onshore oil & gas production targets year after year since 2006, we would like to welcome Dr. Ing. Evita Legowo and Mr Aftab Khan to Production Optimisation Week Asia!

Dr. Ing. Evita Legowo leads Indonesia’s oil and gas industry to new heights with favourable tax treatment and improved production splits, as the country considers offering more incentives to foreign investors to encourage oil and gas projects.

As Executive Director - Asset Manager, Rajahmundry Asset of ONGC, Mr. Khan is responsible for steering the most valuable region of ONGC where onshore activities are spread over three districts in the State of Andhra Pradesh viz., East Godavari, West Godavari and Krishna. Also looks after the drilling operations of ONGC in offshore in the East Coast.

The Center for Energy Sustainability and Economics is convening Production Optimisation Week Asia (POWA) 2011 from 25th to 29th July 2011 at the Westin Kuala Lumpur, in Kuala Lumpur, Malaysia to help oil and gas companies such as state-owned oil companies from as far as the Africa, South America and the Middle East generate alignment to boost recovery and revenue and come together for informed and integrated approaches to a diverse variety of conditions. The meeting will involve senior company executives as well as functional heads in charge of reservoir engineering, production engineering, drilling and completions engineering, particularly those involved with each company’s mature, marginal, deepwater and other technically and commercially challenging fields.

POWA 2011 is specifically designed based on the feedback of experts and specialists from major oil and gas operators concerning their current challenges and needs associated with maximising production and with world-leading optimisation strategies and solutions. With a well-rounded and solution-focused structure, POWA will successfully respond to the need for ground breaking solutions and technology as well as policy, strategy and cost-efficient advanced techniques to maximise and optimise production and increase recovery whilst improving safety and environmental standards.

Thus, for the very first time – combining the reservoir, production and completions engineering, POWA 2011 is put together to provide national oil companies, joint ventures and subsidiaries with a real comprehensive, multidisciplinary platform highlighting the breadth and depth of information needed to provide the best solutions and services to clients in the upstream oil and gas industry, as peers and industry benchmarks share their current challenges and needs. More details on the event website http://www.arcmediaglobal.com/powa

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If you’d like more information about this topic, or to schedule an interview with the speakers at POWA 2011, please call Eunice Wee at (+65) 6844 2080 or email Eunice at powa@arcmediaglobal.com

The Center for Energy Sustainability and Economics (Center for Energy) is an industry research centre (IRC) that works to bring top executives together in communities of learning and practice to act as a catalyst for generating high-value energy business insight and channel top expertise to where the world needs it most. Meetings by the Center for Energy are managed by Arc Media Global, the world’s first B2B/G2B integrated marketing specialist headquartered in Singapore.

Robinson Road. PO Box 176. Singapore 900326

Contact: Eunice Wee
Arc Media Global
(+65) 6844 2080
powa@arcmediaglobal.com
www.arcmediaglobal.com/powa

This release was published on openPR.