Unprecedented Investment Growth
The surge in funding constitutes a considerable increase from $45 billion invested between 2014 and 2023. Petronas and Shell, along with national oil companies, are driving investment expansion with East Asian upstream companies expected to increase their investment share from 15% to 27% through strategic acquisitions and new exploration ventures.
Key Drivers of Growth
Recent discoveries such as the Pegaga Gas field in Malaysia and the Merakes field in Indonesia, are driving investment and growth in the region. These discoveries, coupled with advances in deepwater project technology, are set to shake up the region's energy profile. Deepwater projects, like the Inpex-operated Abadi LNG and BP’s Tangguh Ubadari Carbon Capture (UCC), are particularly crucial as they promise to unlock enormous gas reserves previously deemed inaccessible using existing technology. Positive strides in carbon capture and storage (CCS) technology provide a further boost to investor confidence, making it easier and less costly to meet regulatory compliance, while placing sustainability centre stage.
Regional Competition Driving Innovation
Indonesia is emerging as a formidable competitor to Malaysia's established dominance in offshore gas production. Important projects include Inpex's Abadi LNG, Eni’s Indonesia Deepwater Development (IDD), and BP’s Tangguh Ubadari Carbon Capture (UCC). These initiatives, along with other recent discoveries, are projected to account for 75% of total Indonesian offshore gas investments slated for final approval (FID). In Malaysia, Petronas is initiating several large projects aimed at maintaining its competitive edge in the region.
Technological Advances and Regional Impact
The construction of CCS hubs in Malaysia and Indonesia is a game-changer. These hubs are essential for managing the high carbon dioxide content anticipated from upcoming projects, which is crucial for securing financing and meeting regulatory standards. The use of depleted reservoirs from mature fields as CO2 storage sites is also gaining traction, significantly enhancing the region's capacity for sustainable gas production. The Tangguh Ubadari Carbon Capture project in Indonesia is anticipated to become a major CCS hub.
Expected Prospects and Market Dynamics
Projected gas resources from FIDs are expected to rise to 58 trillion cubic feet by 2028. This threefold increase comes in contrast to the region's historically limited investment in such advancements over the last five years. Despite economic challenges, particularly in deepwater and sour gas ventures, the region stands to benefit from calculated investments and evolving market conditions.
One Eye on the Future
Southeast Asia’s offshore gas sector is gearing up for a transformational decade. The focus on sustainable practices and energy security ensures that this growth will not only enhance the region's energy landscape but do so in a manner that adds to global efforts for reducing carbon emissions.
