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
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 2
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 3
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. 4
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 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. 5
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). 6
Table 3 South East Asia: Oil Production, 1998-2008 Country 1998 2008 Change (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. 7
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). 8
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 * Reserves Remaining 35 years (bn cfd) Production 17.0 Consumption 11.8 Net Trade 5.2 * At year-end Based on 2008 s production Source: (Reserves) Oil & Gas Journal (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). 9
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 Source: (Reserves) Oil & Gas Journal (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 Country 1998 2008 Change (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 10
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 Source: (Philippines) Oil press 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. 11
Table 9 South East Asia: Gas Consumption, 1998-2008 Country 1998 2008 Change (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 Source: (Philippines) Oil press 12
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 Proven Reserves 3.99 bn bbl * Reserves Remaining 11 years (kbd) Production Oil 865 NGL 125 Total 990 Consumption 1,200 Imports 510 Exports 300 Net Trade (210) * At year-end Based on 2008 s production Source: (Reserves) Oil & Gas Journal (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 13
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. 14
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. 15
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. 16
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 subbituminous 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 * Reserves Remaining 38 years (bn cfd) Production 7.5 Consumption 4.0 Net Trade 3.5 * At year-end Based on 2008 s production Source: (Reserves) Oil & Gas Journal (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 17
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 18
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 Proven Reserves 4.00 bn bbl * Reserves Remaining 14 years (kbd) Production Crude Oil 694 NGL 60 Total 754 Consumption 475 Net Trade 279 * At year-end Based on 2008 s production Source: (Reserves) Oil & Gas Journal (NGL) OET Annual Statistical Review, 2009 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 19
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 Proven Reserves 83.0 trillion cf * Reserves Remaining 38 years (bn cfd) Production 6.0 Consumption 3.0 Net Trade 3.0 * At year-end Based on 2008 s production Source: (Reserves) Oil & Gas Journal The growing surplus of natural gas in Malaysia has allowed it to become the world s secondlargest 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 20
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 jointventure 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 21
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 Proven Reserves 1.10 bn bbl * Reserves Remaining 17 years (kbd) Production Crude Oil 145 NGL 30 Total 175 Consumption 20 Net Trade 155 * At year-end Based on 2008 s production Source: (Reserves) Oil & Gas Journal (NGL) OET Annual Statistical Review, 2009 (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). 22
Table 17 Brunei: Gas Balance, 2008 Proven Reserves 13.8 trillion cf * Reserves Remaining 31 years (bn cfd) Production 1.2 Consumption 0.3 Net Trade 0.9 * At year-end Based on 2008 s production Source: (Reserves) Oil & Gas Journal 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 LNG Volume (bn cfd) Japan 0.79 South Korea 0.09 Total 0.88 Totals rounded and refer to contract volumes only Source: BP Statistical Review of World Energy, 2009; Cedigaz 23
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 Proven Reserves 0.44 bn bbl * Reserves Remaining 4 years (kbd) Production Crude Oil 225 NGL 100 Total 325 Consumption 797 Net Trade (472) * At year-end Based on 2008 s production Source: (Reserves) Oil & Gas Journal (NGL) OET Annual Statistical Review, 2009 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. 24
Table 20 Thailand: Gas Balance, 2008 Proven Reserves 11.2 trillion cf * Reserves Remaining 11 years (bn cfd) Production 2.8 Consumption 3.6 Net Trade (0.8) * At year-end Based on 2008 s production Source: (Reserves) Oil & Gas Journal 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 Pipeline Volume (bn cfd) Burma 0.83 Total 0.83 Totals rounded and refer to contract volumes only Source: BP Statistical Review of World Energy, 2009; Cedigaz 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 25
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 Proven Reserves 0.14 bn bbl * Reserves Remaining 24 years (kbd) Production Crude Oil 16 NGL Total 16 Consumption 288 Net Trade (272) * At year-end Based on 2008 s production Source: (Reserves) Oil & Gas Journal (NGL) OET Annual Statistical Review, 2009 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. 26
Table 23 Philippines: Gas Balance, 2008 Proven Reserves 3.5 trillion cf * Reserves Remaining 32 years (bn cfd) Production 0.3 Consumption 0.3 Net Trade * At year-end Based on 2008 s production Source: (Reserves) Oil & Gas Journal 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. 27
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 Source: (Reserves) Oil & Gas Journal 28
Table 26 Singapore: Gas Imports, 2008 Supplier Volume (bn cfd) Pipeline Indonesia 0.64 Malaysia 0.16 Total 0.80 Totals rounded and refer to contract volumes only Source: BP Statistical Review of World Energy, 2009; Cedigaz 29