Looking to the east: The rise of oil and gas in Asia Pacific30 January, 2012
For the energy industry, this means there is one way to look for future opportunities east.
China itself is already stepping up its plans for oil and gas development. Last year, saw the surveying investment for oil and gas rise by 6.7 per cent, leading to the discovery of two major oil fields and six gas fields, each of which had an estimated 30 billion cubic meters of gas, China Daily reported.
Gas imports through the Central Asian pipelines are expected to hit 55-60 billion cubic meters by 2015, according to figures from China National Petroleum Corporation, double the capacity expected at the end of 2012.
In July, use of natural gas doubled year-on-year, in part as an effort to slash emissions and demand is only expected to rise.
With this is mind, the oil and gas industry is scrambling for development opportunities in Asia, where it can tap into this huge market.
Thailand is among the countries at the forefront of these developments, with its new energy minister recently reviving plans for the country to become a huge regional oil trading hub to rival Singapore.
The plans are hugely dependent on the building of a 180km bridge for road, rail and pipelines which would allow for the transportation of crude from the Middle East, Reuters reported.
Energy minister Pichai Naripthaphan said: "If we have the land bridge, Thailand has the potential to become a centre for oil trading and a leader in biofuel in the region."
At the same time, Thailand is looking to invest more in reserves overseas, with Myanmar, Cambodia and Vietnam all key targets, the latter of which has found itself at the centre of an energy dispute between India and China recently.
ONGC Videsh Ltd (OVL), a unit of India's Oil and Natural Gas Corp, inked a deal with Vietnam Oil & Gas Group which will see both countries' investment in oil and gas increase during the next three years.
OVL already owns a 45 per cent share in the 06.1 offshore block and along with its partners, including PetroVietnam, has developed the Lan Tay field in the block and the new deal brings the pair even closer.
However, the pair's exploration activities in the disputed South China Sea have led to China calling on India to cease its activities in the region, just days after China and Vietnam signed a pact to end the dispute in this area.
With the Philippines, Brunei, Malaysia and Taiwan all also placing claims over sections of the South China Sea, disputes over its reserves are unlikely to be resolved anytime soon, but companies are experiencing success in other areas of Vietnam. Premier Oil announced the start of production from the Chim Sáo field in Block 12W in October, which is expected to plateau at 25,000 barrels of oil per day.
Looking further South, Indonesia is looking to make a name as a regional producer of shale gas. The country recently set itself a 100 trillion cubic feet production target and state-run oil and gas company Pertamina is expanding is exploration activities.
"With such huge potential, we are in favour of speeding up the operations. Shale gas is a new gas source for Pertamina. We hope to follow the United States and Canada, which use shale gas as primary contributor to national gas production," upstream director Muhamad Husen said.
And even further south Australia is seeing increased fire in its energy industry, with two major projects being given the green light in the past month although the subject of China is never far away from the discussion.
Chevron gave the go ahead to its Wheatstone LNG project in Western Australia, which when up and running will have two trains with a capacity of 8.9 million tons per annum.
John Watson, chairman and chief executive officer, Chevron Corporation, said: "This project, along with Gorgon LNG, is well-positioned to provide a large, secure energy supply to meet growing demand in the Asia-Pacific region, and to place Chevron as one of the world's leading LNG suppliers."
Apache also recently announced the $438 million (£318 million) development of the Balnaves oil field in Production License WA-49-L offshore Western Australia. First production is expected to begin in 2014, with peak daily production expected to hit 30,000 barrels.
The development consists of two horizontal production wells connected to a floating production, storage and offloading (FPSO) vessel via subsea tiebacks and as with investments of this size comes benefits for oil services companies, which are also benefiting from Chinese demand.
Woodside's North West Shelf Oil Redevelopment Project involved the conversion and installation of the Okha FPSO as well as the replacement of associated subsea infrastructure. Figures from International Maritime Associates suggest South East Asia accounts for 33 of the FPSO projects in the pipeline, and this could rise in line with demand.
Market analyst Wang Meng told China Daily the country has been constructing more LNG terminals along the coast with the aim of boosting imports and the projects in Australia and other Asia Pacific countries are only too keen to oblige.
Chevron vice chairman George Kirkland, speaking upon the announcement that 50 per cent of the investment in the Wheatstone LNG project will go on local content, highlighted Australia is ideally placed to help meet China's veracious appetite for energy.
He told the Sydney Morning Herald: "The opportunities and economic benefits are on a scale that has never been seen before in Australia."
Indeed, the scale of opportunity offered by the huge demand for energy seen from China and the emerging economies of Asia Pacific is one which has likely not been seen recently by the entire oil and gas industry.