Malaysia beats Indonesia in new oil and gas discovery
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Malaysia surpassed Indonesia as the key player in the upstream hydrocarbon industry in Southeast Asia last year, as Indonesia struggles to encourage new investments in the sector amid the nation’s dwindling oil production.
Research by the Wood Mackenzie Group showed Indonesia, the former sole Southeast Asia member of the Organization of the Petroleum Exporting Countries (OPEC), only contributed 14 percent to the region’s newly discovered oil and gas reserves in 2012.
The Edinburgh-based global energy oil and gas research specialist said that last year, Indonesia discovered 13 million barrels of oil equivalent (boe) of new reserves in 20 new oil and gas fields.
Malaysia, on the other hand, was the “stand-out performer” in Southeast Asia’s upstream sector with estimated discoveries of 1.4 billion boe last year, or 72 percent of the total discoveries in the region.
At least six new gas fields with combined estimated reserves of 7.3 trillion cubic feet (tcf) discovered in Malaysia were included in the top-10 largest discoveries in Southeast Asia, according to the report.
Malaysia’s state-owned energy company, Petronas Carigali, Swedish oil and gas firm Lundin Petroleum and US-based Murphy Oil were among the most successful players in Malaysia. Murphy, which lost US$214.6 million after discovering dry holes during its four-year explorations off the coast of Papua, Indonesia, was successful off the coast of Sabah, Malaysia, with its three fields holding a combined total of 600 billion cubic feet (bcf) of gas reserves.
“The year 2012 was a disappointing year for Indonesia,” Wood Mackenzie said in its report, a copy of which was obtained by The Jakarta Post.
Norwegian Statoil’s two oil and gas fields in the Karama block in the Makassar Strait, Sulawesi, as well as several basins drilled by the Netherlands-owned Pexco in North Sumatra and Italy’s ENI off East Kalimantan were described as “disappointments” by the research group.
Malaysia, which according to Wood Mackenzie had introduced several fiscal initiatives to encourage exploration and development, awarded 13 production sharing contracts (PSCs) in 2012, a record number for any one year.
Overall, the lack of upstream activity in Indonesia, which awarded 20 contracts last year, down from 52 awarded in 2011, as well as in Myanmar, which awarded three licenses, down from 12 in 2011, contributed to a dreary year in terms of licensing activity in Southeast Asia.
With 47 licenses awarded across the region last year, licensing activity was down by 36 percent compared with 2011.
All in all, exploration activity in Southeast Asia fell last year with 190 wells completed, a slight decline from the average of 200 wells completed per year in the past few years, with Thailand and Vietnam experiencing the largest exploration decreases.
Indonesia’s unfavorable policies toward oil and gas firms have been blamed for the steady decline in oil output from 1.3 million barrels per day (bpd) in the early 2000s to the current figure of around 830,000 bpd as the country merely relies on aging fields.