Southeast Asian oil and gas producers could reap a windfall of more than $16 billion this year in the face of soaring and now high energy prices, according to Wood Mackenzie Consultants Ltd., Edinburgh. The clear leaders are Indonesia and Malaysia, where the cash windfall could amount to around $8 billion and $4.4 billion, respectively.
The analysis, which excluded Myanmar and the bulk of Viet Nam's state-controlled production, said the windfall calculation was based on the end-1999 forecast that benchmark Brent crude would average $17/bbl this year, compared with the more recent forecast of $28. It said Brunei's gains were estimated at around $1.2 billion, while offshore China's windfall was at $1.3 billion. The figures include foreign contractors' share of the revenue.
Wood MacKenzie went on to say that international oil companies, which hold production sharing contracts, will experience big revenue increases from the region that could amount to $4.4 billion. ExxonMobil Corp. and the Royal Dutch/Shell Group led the field with expected windfalls of $619 million and $403 million respectively.
The consultants said hefty domestic fuel subsidies were burdening countries such as Indonesia and, to a lesser extent, Viet Nam, eating into what would otherwise be substantial gains from soaring crude prices.
The consultants estimated that in Indonesia, the gas oil or diesel subsidy alone could be as high as $2.9 billion. When the remaining oil product subsidies are factored in, the upstream state cash windfall of some $6.3 billion is likely to have a limited impact on Indonesia's balance of payments, they added.