Oil & Gas in South East Asia - John Wiley &...

©Blackwell Publishing Ltd, 2009

GLOBAL ENERGY REVIEW

Oil & Gas in South East Asia

A Report by Dr Paul McDonald

Consulting Editor, Oil and Energy Trends

A survey of the oil and gas reserves of South East Asia;

Together with an details of production, consumption and trade;

Covering the following countries:

o Indonesia

o Malaysia

o Brunei

o Thailand

o The Philippines and

o Singapore

30 November, 2009


2

Contents

Introduction 4

Overview of the Oil Sector 5

Overview of the Gas Sector 9

Country Surveys 13 Indonesia 13

Oil Production 13 New Fields 15 Long Term Decline 16 Oil Demand 16 Natural Gas 17

Malaysia 19 Oil Production 19 Natural Gas 20

Brunei 22 Oil Production 22 Natural Gas 22

Thailand 24 Oil Production 24 Natural Gas 24

Philippines 25 Oil Production 25 Natural Gas 26

Singapore 27 Oil and Gas Production 27


3

List of Tables

Table 1 South East Asia: Oil Balance, 2008 5

Table 2 South East Asia: Oil Consumption, 1998-2008 6

Table 3 South East Asia: Oil Production, 1998-2008 7

Table 4 South East Asia: Oil Production, 2008 v Highest Level 8

Table 5 South East Asia: Gas Balance, 2008 9

Table 6 South East Asia: Gas Reserves and Production, 2008 10

Table 7 South East Asia: Gas Production, 1998-2008 10

Table 8 South East Asia: Gas Production, 2008 v Highest Level 11

Table 9 South East Asia: Gas Consumption, 1998-2008 12

Table 10 Indonesia: Oil Balance, 2008 13

Table 11 Indonesia: Gas Balance, 2008 17

Table 12 Indonesia: Gas Exports, 2008 18

Table 13 Malaysia: Oil Balance, 2008 19

Table 14 Malaysia: Gas Balance, 2008 20

Table 15 Malaysia: Gas Exports, 2008 21

Table 16 Brunei: Oil Balance, 2008 22

Table 17 Brunei: Gas Balance, 2008 23

Table 18 Brunei: Gas Exports, 2008 23

Table 19 Thailand: Oil Balance, 2008 24

Table 20 Thailand: Gas Balance, 2008 25

Table 21 Thailand: Gas Imports, 2008 25

Table 22 Philippines: Oil Balance, 2008 26

Table 23 Philippines: Gas Balance, 2008 27

Table 24 Singapore: Oil Balance, 2008 28

Table 25 Singapore: Gas Balance, 2008 28

Table 26 Singapore: Gas Imports, 2008 29


4

Introduction

South East Asia was until recently an important producer of oil and gas. It includes Indonesia,

formerly a member of OPEC, and a major exporter of crude to East Asia. Now, Indonesia is a

net importer of oil and is no longer a member of OPEC. The only net exporters of oil are

Malaysia and Brunei and their exports are in decline. Consumption meanwhile is rising across

the region.

Production of oil is falling across the region as a whole, though there has been a slight increase

for Malaysia and Thailand. Malaysia’s production, however, is below its peak. Indonesia is

seeking to revive its production but any successes are likely to be limited and short-lived.

In view of the general prospects for oil, there is rather more interest in natural gas. Output has

been rising in Brunei, Malaysia and Thailand, but in Indonesia–the region’s main producer–it is

in decline. Small volumes of gas are produced in the Philippines.

Singapore has no oil or gas production but acts as the main oil trading and refining centre for

South East Asia and the Asia/Pacific market.


5

Overview of the Oil Sector

The countries of South East Asia produce 2.3 mn bpd of crude oil and natural gas liquids.

Consumption is 3.7 mn bpd, making the region a net importer of nearly 1.5 mn bpd. It has

proven reserves of 9.7 bn barrels, which are sufficient for about 12 years at current rates of

production (see Table 1).

Table 1

South East Asia: Oil Balance, 2008

Proven Reserves 9.67 bn bbl *

Reserves Remaining 12 years †

(kbd)

Production

Crude Oil 1,945

NGL 315

Total 2,260

Consumption 3,738

Net Trade (1,478)

* At year-end † Based on 2008’s production

Source: (Reserves) Oil & Gas Journal

(NGL) OET Annual Statistical Review, 2009

(Other) BP Statistical Review of World Energy, 2009

The consumption of oil is rising in South East Asia except in the Philippines where there has

been a concerted attempt to substitute oil with domestically-produced natural gas (see Table 2).

Substitution of oil by gas looks likely to grow over the coming 5-10 years which, given the

expected rate of change in gas production, is likely to result in a fall in net exports of gas.


6

Table 2

South East Asia: Oil Consumption, 1998-2008

Country 1998 2008 Change

(kbd) (kbd) (kbd) (%)

Indonesia 914 1,217 303 33

Malaysia 404 475 71 18

Brunei 10 30 20 200

Thailand 691 797 106 15

Philippines 392 288 (104) (27)

Singapore 651 958 307 47

Total 3,062 3,765 703 23

Source: (Brunei) OET Annual Statistical Review, 2009; GER estimate


Discounting the figures from Brunei because of the low volumes involved, the main increases in

both volume and percentage terms have been in Singapore and Indonesia. In the former case,

this has been a result of the island’s strong economic growth. Indonesia’s oil consumption has

grown largely as a result of the low, subsidized prices (see following section).

Consumption of oil has risen by 23% over the last decade, with double-digit increases

everywhere except in the Philippines. Over the same period, the production of oil has fallen by

12% (see Table 3).


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Table 3

South East Asia: Oil Production, 1998-2008


(kbd) (kbd) (kbd) (%)

Indonesia 1,520 1,004 (516) (34)

Malaysia 779 754 (25) (3)

Brunei 157 175 18 11

Thailand 130 325 195 150

Philippines 8 16 8 100

Singapore — — — —

Total 2,594 2,274 (320) (12)

The 2008 figures for Indonesia are taken from a different source to that used in Table 10.

Figures differ slightly from those in Table 1 owing to use of additional sources to BP Statistical

Review in this table

Source: (Philippines) OET Annual Statistical Review, 2009; Oil & Gas Journal


The main decrease in production in volume and percentage terms occurred in Indonesia, where

output has fallen by over a third in the last decade. Malaysia has witnessed a much smaller

decline, of only 25,000 bpd, or 3%. It is nevertheless significant that the two countries posting a

decline are the region’s two largest oil and natural gas liquids (NGL) producers by a

considerable margin. The only significant volume and percentage gain has come from Thailand.

Volume gains from Brunei and the Philippines have been more or less negligible.

Output in Indonesia, Malaysia and Brunei is below the levels previously seen (see Table 4). It

seems reasonable to assume that all three countries are now in long-term decline, though

Malaysia expects a small–and almost certainly temporary–increase over the next year or so.

Output from Thailand and the Philippines may grow for a few years longer.


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Table 4

South East Asia: Oil Production, 2008 v Highest Level

Country Production

2008 Highest Total Difference

Volume Volume Year Volume

(kbd) (kbd) (kbd)

Indonesia 1,004 1,670 1991 666

Malaysia 754 793 2004 39

Brunei 175 221 2006 46

Thailand 325 325 2008 —

Philippines 16 16 2008 —

Source: GER based on data in BP Statistical Reviews of World Energy

Indonesia’s peak was as long ago as 1991, since which time its output has declined by 40%.

Malaysia’s and Brunei’s previous peaks were 2004 and 2006, respectively. It is possible their

production could exceed their former peak in future years, though this appears unlikely in

Brunei’s case. Malaysia’s output could yet exceed the 793,000 bpd seen in 2006, but it is

unlikely to go much beyond this level (see country surveys below).


9

Overview of the Gas Sector

The gas sector appears to have better prospects than the oil sector in some respects. Reserves are

sufficient for 35 years, compared with the 12 years for oil (see Table 5). Output is rising in

Malaysia and Thailand and may do so in the Philippines. On the other hand, it is in decline in

Indonesia and Brunei.

Table 5

South East Asia: Gas Balance, 2008

Proven Reserves 217.5 trillion cf *


(bn cfd)

Production 17.0

Consumption 11.8

Net Trade 5.2



(Other) See Tables 7 & 8

Most of the region’s proven reserves are in Indonesia and Malaysia, which account for 87% of

the total (see Table 6). Despite having the largest reserves, Indonesia may struggle to increase its

output much further (see country section below).


10

Table 6

South East Asia: Gas Reserves and Production, 2008

Country Reserves Production

(trillion cf) (bn cfd)

Indonesia 106.0 6.7

Malaysia 83.0 6.0

Brunei 13.8 1.2

Thailand 11.2 2.8

Philippines 3.5 0.3

Singapore — —

Total 217.5 17.0


(Philippines’ production) Oil press


Gas production has risen in all five of South East Asia’s gas-producing countries over the last

decade. The largest increase in volume terms has been in Malaysia, whilst Thailand has

recorded the highest percentage rise (see Table 7). Whilst Malaysia’s proven reserves are

sufficient to allow a further increase in output, Thailand will probably have to find more gas if its

production is to go on rising at its recent rate.

Table 7

South East Asia: Gas Production, 1998-2008


(mn cfd) (mn cfd) (mn cfd) (%)

Indonesia 6.2 6.7 0.5 8

Malaysia 3.7 6.0 2.3 62

Brunei 1.0 1.2 0.2 20

Thailand 1.7 2.8 1.1 65

Philippines — 0.3 0.3 —

Total 12.6 17.0 4.4 35

The 2008 figures for Indonesia are taken from a different source to that used in Table 11.

Source: (Philippines) Oil press



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Although gas production has risen since 1998, it may well have passed its peak in the case of

Indonesia and Brunei. Indonesian output has fallen by 400 mn cfd, or 6%, since 2003, whilst

Brunei’s has gone down by just under 50 mn cfd since 2006. Malaysia, Thailand and the

Philippines were all at historic highs in 2008 (see Table 8).

Table 8

South East Asia: Gas Production, 2008 v Highest Level

Country Production

2008 Highest Total Difference

Volume Volume Year Volume

(bn cfd) (bn cfd) (bn cfd)

Indonesia 6.7 7.1 2003 0.4

Malaysia 6.0 6.0 2008 —

Brunei 1.2 1.2 2006 —

Thailand 2.8 2.8 2008 —

Philippines 0.3 0.3 2008 —

Total 17.0



As with oil, so the consumption of gas is rising at a faster rate than production. Between 1998

and 2008, the production of gas rose by 4.4 bn cfd whereas gas consumption rose by 5.8 bn cfd:

almost double the level of ten years previously (see Table 9). Consumption is likely to go on

rising faster than production, causing exports to fall.


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Table 9

South East Asia: Gas Consumption, 1998-2008


(bn cfd) (bn cfd) (bn cfd) (%)

Indonesia 2.6 3.7 1.1 42

Malaysia 1.5 3.0 1.5 100

Brunei 0.3 0.3 — —

Thailand 1.5 3.6 2.1 140

Philippines * 0.3 0.3 †

Singapore 0.1 0.9 0.8 800

Total 6.0 11.8 5.8 97

* Negligible † > 1,000%

Indonesia’s 2008 total is taken from a different source from that in Table 11




13

Country Surveys

The prospects for oil and gas production are summarized in the sections below.

Indonesia

Oil Production

Oil production has been in decline for nearly two decades. Peak output was in 1991, when it

reached 1.7 mn bpd. Consumption had been rising before that date and continued to do so

afterwards. In 1991, Indonesia had net exports of 1 mn bpd. By the end of the decade, the total

was down to 400,000 bpd. In 2003–the last year of net exports–they were only 40,000 bpd. This

year, net imports look to have been in the region of 300,000 bpd.

Table 10

Indonesia: Oil Balance, 2008



(kbd)

Production

Oil 865

NGL 125

Total 990

Consumption 1,200

Imports 510

Exports 300

Net Trade (210)



(Other) BPMigas; oil press

The government has tried to stem the steady rise in imports by raising domestic prices and

increasing production. Its initial aim was to slow down the rate of decline in production or even

to stabilize output around 1 mn bpd. In recent years, however, the talk has been of reversing the


14

decline. In early 2006, it set a target for a production level in 2009 of 1.3 mn bpd, which would

have represented a rise of 200,000 bpd, or 18%, over its production at that time.

Since then, the target has been progressively lowered. The hope at the beginning of 2009 was

that Indonesia would produce just over 1 mn bpd this year. The country’s upstream regulator,

BPMigas, was reported earlier to have reduced the target to 960,000 bpd, but even this is

unlikely to be met. Official figures covering the period up to September suggest that the total for

2009 is likely to be close to 950,000 bpd, of which 830,000 bpd would be crude oil and

120,000 bpd natural gas liquids.

None of this, however, has prevented Indonesia from announcing higher targets for subsequent

years. At the start of this year, BPMigas was thinking in terms of a production target of

1.1 mn bpd for 2010. This figure, though, is already down by 100,000 bpd, or 8%, from the

target that was being talked about just a few months earlier.

Indonesia’s principal problem is one of geology. Its older, larger fields are in long-term decline

and its new discoveries tend to be much smaller in size. The plan for 2008 was to commission

about a dozen new fields, but their combined production resulted in a net gain of only

10,000 bpd.

Geology, though, is not the only problem. Foreign oil companies complain privately of

corruption, bureaucracy, official secrecy over various aspects of the upstream oil business and

high taxes. Last year, the government responded by promising to streamline the process of

awarding upstream licences and to cut the taxes levied by regional governments on foreign oil

companies. Jakarta has also said it will improve the profit split in its production sharing

contracts for exploration blocks in frontier regions.

There are an estimated 65 oil companies operating in Indonesia’s upstream sector. The largest of

these is US major, Chevron, which produces just over 400,000 bpd. Pertamina, the state oil

company, is second with around half that amount. Other significant producers are Total, ENI

and ExxonMobil. The country’s largest oilfield is the onshore Sumatran field of Duri, which

produces about 200,000 bpd. Output has been falling there, but Chevron has been trying to stem

the decline by enhanced oil recovery there, including the injection of steam into the reservoir and

the drilling of new prospects, like North Duri, in the same formation. The long-term future for

Duri though is for its decline to continue.


15

New Fields

Pertamina has been busy commissioning new fields and increasing output from existing ones.

Recent projects include new developments at Banyu Urip and Matindok and additions to existing

fields at Poleng and Pondok Tengah.

Banyu Urip is part of the Cepu field in East Java, which Pertamina is developing in conjunction

with ExxonMobil. The field is estimated to have reserves of 600 mn bbl, of which Banyu Urip’s

share is about 250 mn bbl. Cepu is the most prospective of Indonesia’s new fields and ambitious

targets have been set for its production. It was supposed to be producing 180,000 bpd now, but

its output is only about 16,000 bpd and fell to zero between April and August. Its peak output is

now forecast at only 165,000 bpd and is unlikely to occur until 2014.

Cepu has been subject to a number of problems, some of which foreign operators in Indonesia

say privately are typical of the oil sector across the whole of Indonesia. In the first place, its

development was delayed by interminable arguments between ExxonMobil and Pertamina over

the terms of the joint-operating agreement covering the block.

Some years ago, a start-up date of 2006 was being mentioned, but this was delayed by lengthy

negotiations between the two main parties. Finally, in 2005, it was agreed that ExxonMobil’s

subsidiary, Mobil Cepu Ltd, should be appointed operator of the field. That decision led to talk

of a new start-up date around the end of 2007, but then Pertamina demanded that the

operatorship should alternate between it and Mobil Cepu on a five-year cycle. The issue was

only resolved when the government, frustrated by the length of time it was taking to reach a

resolution, replaced the head of Pertamina with a less intransigent candidate. A compromise deal

was agreed under which ExxonMobil was left in charge but the national oil company was

designated ‘joint operator’.

The field finally came on-stream in December 2008 with an output of only 800 bpd. There was

worse to come: the building of a pipeline to handle the crude was delayed by the regional

government, leaving the use of trucks as the only option to carry the crude. Objections to this

from local communities forced the ending of the practice and the field was shut down between

April and August 2009 until the pipeline was completed. Its output was reported to be in the

region of 20,000 bpd shortly afterwards, but then to have fallen to 16,000 bpd.

Nor is Banyu Urip the only one of Pertamina’s fields to be late on-stream or to be producing

below expectations. Its Oyong field was delayed by a year owing to shortages of equipment.


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Output from its Pondok Tengah field in West Java is below expectations. Production was

supposed to reach 26,000 bpd, but the upstream regulator, BPMigas, has said that output will

probably be “lower than earlier estimated”.

Long-Term Decline

Some new output is expected from fields such as Pertamina’s Matindok and extensions to fields

such as Bekapai and Handil in West Kalimantan, which are operated by France’s Total. It

remains difficult, however, to see how Indonesia can reverse the long-term decline in its

production. Apart from the delays to new projects, which continue to occur, there is the fact that

the new discoveries are just a lot smaller than the older fields that they are meant to be replacing.

Pertamina is now talking of boosting its output by the use of enhanced oil recovery, but this only

works well when it is planned for at the outset of a field’s development rather than–as appears to

be the case here–being added almost as an afterthought. The Ministry of Energy and Mines says

it is working on new and more attractive contracts, but these alone will not be sufficient to

reverse the decline. The Ministry has also mysteriously floated the idea of developing the

country’s oil shales. A Ministry official recently mentioned a possible production level of

1 mn bpd by 2025 but gave no particulars of the reserves or how they were to be exploited. They

would, in any case, require large inputs of energy to extract the oil from the shale. Such energy

inputs would almost certainly have to come from natural gas; and it is by no means certain that

Indonesia has enough of this either.

Oil Demand

At the end of 2008, Indonesia ceased to belong to OPEC on the not unreasonable grounds that it

was no longer a net exporter of oil. It nevertheless remains the country’s aim to rejoin the cartel

once it has returned to having a surplus of oil. Raising production is only one half of its strategy

to achieve its aim. The other half is to curb the rise in domestic consumption.

Indonesia’s oil consumption has risen by 33% over the last ten years. Over the same period its

production of oil has fallen by 35%. It has tried for some years to reduce the rate of growth by

cutting subsidies on domestic product prices. It is also trying to substitute other fuels for oil. In

order to tackle a countrywide shortage of middle distillate, the government has been promoting

the use of liquefied petroleum gas. Some LPG ought to be available from Indonesia’s domestic

gas production but much of it needs to be imported.


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A more promising form of substitution is to replace oil in electricity generation with coal.

Indonesia has its own coal resources, with proven reserves estimated at 4.3 bn t: sufficient for

about 20 years at current rates of production, compared with a reserves:production ratio of 11:1

for oil. The problem for Indonesia is that around 60% of its reserves are of poor quality sub-

bituminous coal and other low grades.

Natural Gas

With all the problems connected with both the production and consumption of oil, it is perhaps

not surprising that the Ministry of Energy and Mineral Resources is placing more emphasis on

natural gas. Gas production has been fairly stable around 7 bn cfd for the last few years and even

rose by 3% in 2008. This year it is up further. From January to September, output was up by

nearly 6% compared with a year earlier. This year’s gas production, at 7.9 bn cfd, is comfortably

above the government’s target of 7.5 bn cfd.

Table 11

Indonesia: Gas Balance, 2008

Proven Reserves 106 trillion cf *


(bn cfd)

Production 7.5

Consumption 4.0

Net Trade 3.5



(Production) BPMigas

(Other) OET estimate

Reserves have also been rising. Between January 2008 and January 2009, Indonesia’s proven

reserves are estimated to have gone up by just over 12 trillion cf, or 13%, to 106 trillion cf (see

Table 11). BPMigas puts the country’s proven, probable and possible gas reserves at a combined

170 trillion cf.

Several large gas schemes are under way or planned: some of them designed to produce liquefied

natural gas for export. Indonesia already exports liquefied natural gas (LNG) to Japan, South

Korea, Taiwan, China and the US. Exports to the last two countries began recently with the


18

commissioning of Indonesia’s newest LNG project at Tangguh, where BP and its partners are

developing a 14 trillion cf discovery. Last year, Indonesia had contracts for the export of

2.6 bn cfd of LNG (see Table 12).

Table 12

Indonesia: Gas Exports, 2008

(bn cfd)

LNG

Japan 1.8

South Korea 0.4

Taiwan 0.4

Total 2.6

Pipeline

Singapore 0.6

Total 0.6

Exports

Total 3.2

Figures refer to contractual volumes only and exclude spot sales

Source: Cedigaz

Other LNG export schemes are planned. One is for a massive field in the South China Sea

known as Natuna. Pertamina has discussed its development with ExxonMobil for several years

but the project has been stalled over disagreements over contractual terms and the fact that the

field will be extremely costly to develop owing to the high carbon dioxide content of the gas.

Recoverable reserves have been put as high as 46 trillion cf.

In central Sulawesi is the Donggi Senoro LNG project: a joint venture between Pertamina,

another Indonesian company, Medco, and Japan’s Mitsubishi. The partners plan to export

265 mn cfd of LNG to Japan from 2012, but details of the project and the sale of its output have

still to be finalized.

One problem that has arisen at Donggi Senoro is a disagreement over the volumes that can be

exported. As part of its policy to use less oil at home, the Indonesian government is trying to

restrict the amount that can be exported from future large scale gas projects. Such is the

domestic demand for gas that some consumers in Indonesia appear ready to pay higher prices for

Indonesian gas than those that can be realized on the export market. The Ministry of Energy and

Mines is now looking into existing and future contracts to see if the country is obtaining the best


19

value for its exports. A restriction on the future level of exports might result in the provision of

more gas to the domestic market but it is unlikely to compensate for the expected decline in oil

production or to enable Indonesia to become a net exporter of oil once more.

Malaysia

Oil Production

Malaysia’s 2008 crude and NGL production of 754,000 bpd is slightly below 2004’s peak so far

of 793,000 bpd. On the other hand, output has been rising since 2006. Between 2006 and 2008,

it rose by 37,000 bpd, or 5%.

Table 13

Malaysia: Oil Balance, 2008



(kbd)

Production

Crude Oil 694

NGL 60

Total 754

Consumption 475

Net Trade 279





The recovery in output since 2006 is largely due to the commissioning of the offshore Kikeh

field, which came on-stream in 2007 at 20,000 bpd and is now producing about 120,000 bpd.

Kikeh is one of several deepwater fields off Sabah, in the South China Sea. More production is

expected from this area over the coming decade.

Much of this new production, however, will be required to offset the natural decline of

Malaysia’s older fields, such as Tapis, where output has declined from a peak of 700,000 bpd in

the late 1990s to just over 200,000 bpd. The new fields are also expected to contain heavier


20

crude than in Malaysia’s older fields. There are nevertheless signs that Malaysia could produce

up to 800,000 bpd despite the country’s modest reserves (see Table 13). The country’s central

bank, Bank Negara, however, says that the Oil & Gas Journal’s estimate of 4 bn bbl is too low

and that reserves are now above 5 bn bbl.

Whatever happens to production, Malaysia’s net exports of oil and NGL are unlikely to rise,

given the likely increase in consumption in future. Demand rose by 71,000 bpd between 1998

and 2008, compared with a fall in production of 25,000 bpd (see Tables 2 and 3). Over the

coming decade as a whole, the rise in demand is likely to exceed any increase in production.

Natural Gas

Unlike oil, natural gas production has been rising steadily over the last ten years (see Table 7).

Moreover, the rise in production has been greater than that which has occurred in domestic

production. Whereas production went up by 2.3 bn cfd between 1998 and 2008, consumption

rose by only 1.5 bn cfd over the same period (see Table 9).

Table 14

Malaysia: Gas Balance, 2008



(bn cfd)

Production 6.0

Consumption 3.0

Net Trade 3.0




The growing surplus of natural gas in Malaysia has allowed it to become the world’s second-

largest producer of LNG. The country appears to have ample reserves (see Table 14) and Bank

Negara says they are even higher than given by some independent outside sources. According to

the central bank, the number is closer to 90 trillion cf.

Malaysia exports gas by pipeline as well as LNG (see Table 15). Its pipeline gas goes to

Singapore, whilst LNG is supplied to China, Japan, South Korea and Taiwan. Bank Negara


21

expects exports to go on rising, but output may not rise as expected and domestic demand may

increase faster than forecast. A number of concerns have been expressed about the long term

sustainability of the Bintulu LNG production complex. Bintulu has a capacity of 3 bn cfd.

In a surprise announcement in 2009, however, the state oil and gas company, Petronas, said it

intended to import 265 mn cfd of LNG from Australia from 2014 from its Gladstone joint-

venture with Santos which is to be based on coal-bed methane from Queensland. The aim

appears to be to enable Petronas to meet future contract obligations from Bintulu, which may in

turn indicate that the company anticipates a decline in Malaysian gas production from the middle

of the decade. It is also possible that Petronas intends to resell the Australian gas to customers

outside Malaysia. It may even be that the state company wants to put pressure on the

government to raise domestic gas prices by suggesting that current domestic prices are

insufficient to encourage future exploration and that there may be shortage of gas within five

years as a result. It nevertheless seems likely that Malaysia’s gas production is nearing its peak.

Table 15

Malaysia: Gas Exports, 2008

Country Volume

(bn cfd)

LNG

Japan 1.68

South Korea 0.80

Taiwan 0.35

China *

Total 2.84

Pipeline

Singapore 0.16

Total 0.16

Exports

Total 2.99

* < 0.01

Totals rounded and refer to contract volumes only

Source: BP Statistical Review of World Energy, 2009; Cedigaz


22

Brunei

Oil Production

Brunei’s oil production is in long term decline, having peaked at 221,000 bpd in 2006. Its

reserves are modest but sufficient to support production levels around 150,000 bpd for some

years to come. Most of Brunei’s output is exported and domestic demand is not expected to rise

by very much in volume terms (see Table 16). There is even scope for a slight increase in

production, but long term decline appears more likely.

Table 16

Brunei: Oil Balance, 2008



(kbd)

Production

Crude Oil 145

NGL 30

Total 175

Consumption 20

Net Trade 155




(Consumption) GER estimate


Natural Gas

Gas production also appears to be past its peak, though reserve levels suggest that output could

be held around 1 bn cfd for some years (see Table 17).


23

Table 17

Brunei: Gas Balance, 2008



(bn cfd)

Production 1.2

Consumption 0.3

Net Trade 0.9




Most of Brunei’s gas is exported (see Table 18). There may be a slight fall in export levels as

production declines gently over the next few years. Consumption, on the other hand, is not

expected to go up by very much.

Table 18

Brunei: Gas Exports, 2008

Country Volume

(bn cfd)

LNG

Japan 0.79

South Korea 0.09

Total 0.88




24

Thailand

Oil Production

Thailand is a modest producer of oil and NGL, with a total of 325,000 bpd in 2008. Its high

consumption, however, means that it must import nearly 60% of its oil requirements (see Table

19). This import requirement is likely to grow in future.

Table 19

Thailand: Oil Balance, 2008



(kbd)

Production

Crude Oil 225

NGL 100

Total 325

Consumption 797

Net Trade (472)





Output of crude and NGL has grown steadily since the 1990s (see Table 3) and there is on the

face of it scope for further rises, but the country’s proven reserves are low, even allowing for the

fact that they may be understated. Thailand’s liquids output is probably close to its maximum

and may be expected to go into long-term decline within three years.

Natural Gas

Thailand is a net importer of gas as, well as oil (see Table 20), though the reserves are higher in

terms of remaining years of production. Imports look set to rise as consumption continues to

increase. Output should also rise, though not at the same rate.


25

Table 20

Thailand: Gas Balance, 2008



(bn cfd)

Production 2.8

Consumption 3.6

Net Trade (0.8)




Thailand’s imports all come from Burma by pipeline (see Table 21). The Thais would like to

import more from Burma and begin importing from Indonesia’s Natuna field, but neither source

is likely to provide all the gas Thailand wants, leaving further volumes to be imported as LNG.

Qatar has already been approached to begin supplying LNG.

Table 21

Thailand: Gas Imports, 2008

Supplier Volume

(bn cfd)

Pipeline

Burma 0.83

Total 0.83



Philippines

Oil Production

The Philippines is a fairly new oil producer. Most of its oil comes from the offshore Malampaya

and Galoc fields. A further field Calauit, is under development. Output from the second two

fields should be more than sufficient to offset the natural decline of the Malampaya field, which


26

dates from the late 1990s. The country’s proven reserves (see Table 22) should be more than

sufficient to allow the Philippines to double its output at least.

Table 22

Philippines: Oil Balance, 2008



(kbd)

Production

Crude Oil 16

NGL —

Total 16

Consumption 288

Net Trade (272)





Output is nevertheless unlikely to be large. Further exploration bidding rounds could uncover

more fields, but they are likely to be small in size. Filipino production is unlikely to exceed

50,000 bpd, leaving the country largely dependent on imports.

Natural Gas

There is a small production of natural gas from the Malampaya field with the prospect of some

further small discoveries. The Philippines would like to make much more extensive use of

natural gas but its output is unlikely to grow by very much.


27

Table 23

Philippines: Gas Balance, 2008



(bn cfd)

Production 0.3

Consumption 0.3

Net Trade —




The Philippines has relied on domestic production for all its gas. If it wishes to fulfil its plans for

greatly increased use of gas it will have to import. A pipeline appears to be ruled out on grounds

of distance, leaving LNG as the more realistic option.

Singapore

Oil and Gas Production

Singapore produces no oil or gas and has no proven reserves (see Tables 24 and 25). Its

importance as an oil centre is as a swing refining centre, acting as the marginal supplier for

markets east of Suez and as a pricing point for these markets.


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Table 24

Singapore: Oil Balance, 2008

Proven Reserves —

Reserves Remaining —

(kbd)

Production

Crude Oil —

NGL —

Total —

Consumption 958

Net Trade (958)

Source: BP Statistical Review of World Energy, 2009

Singapore’s gas is supplied by pipeline from Indonesia and Malaysia (see Table 26). Any

increase in demand will have to be met by more pipeline gas from these countries or from LNG.

Table 25

Singapore: Gas Balance, 2008

Proven Reserves —

Reserves Remaining —

(bn cfd)

Production —

Consumption 0.9

Net Trade 0.9




29

Table 26

Singapore: Gas Imports, 2008

Supplier Volume

(bn cfd)

Pipeline

Indonesia 0.64

Malaysia 0.16

Total 0.80



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