WoodMac: SE Asia lines up 54 developments

• Southeast Asian Filed Development Under Way and Expected [48,787 bytes]

Southeast Asian countries have a total of 30 oil and gas fields under development, and another 24 are expected to be developed, according to Wood Mackenzie Consultants Ltd., Edinburgh.

The analyst said the 54 fields will cost more than $25.5 billion to develop, with this outlay expected during the next 7-8 years. Combined reserves for the fields are estimated at 2.9 billion bbl of oil and 66 tcf of gas.

"Indonesia predominates," said WoodMac, "with a total of 17 projects. Malaysia is second with 11 projects, and offshore China is third with eight.

"The most common development concept continues to be the fixed platform, featured in 63% of projects in this year's survey. Significantly, 14% of developments feature an FPSO, a year-on-year increase from 7% in 1996."

The balance of new developments is said to show clearly an increasing emphasis on gas utilization across Southeast Asia.

"The growing domestic gas market in Java and continuing demand for liquefied natural gas (LNG) in the region have spawned several new gas projects in Indonesia," said Wood Mackenzie, "while Thailand, Myanmar, the Malay- sia-Thailand joint development area, and the Philippines also have a significant number of gas-oriented projects."

Brunei

Brunei has seen a decline in exploratory drilling in recent years, with the country's main concession holder and only producing company, Brunei Shell Petroleum Co. Sdn. Bhd., concentrating on development of existing fields rather than on exploration.

"In recent years," said Wood Mackenzie, "it had been rumored that the government was considering the introduction of a production-sharing contract-based licensing system to encourage foreign oil companies to invest in Brunei. However, this has yet to materialize."

China

China's liquids production in- creased 3% in 1996 to an average 3.1 million b/d. The offshore component of this total increased 79% to 300,000 b/d, due to building output from Xijiang, Huizhou, and Liuhua.

However, despite new production and new developments, the analyst reckons China's liquids output is likely to fall in the medium term to about 2.6 million b/d by 2000.

"China's gas production, in contrast, is at an all-time high," said Wood Mackenzie, "averaging 1.6 bcfd in 1996, and will continue to rise through the turn of the century."

Onshore China development is expected to remain focused on maintaining production from the country's large northeastern fields, through use of enhanced recovery techniques.

Indonesia

Indonesia continues to focus on development of gas for domestic use and export as LNG.

WoodMac notes that the list of Indonesian fields it identifies is not exhaustive, with operators regularly tying in small finds to existing infrastructure.

Also, Natuna D find operated by Exxon Corp., with estimated reserves of 46 tcf of gas, has been excluded from the listing, being "...unlikely to receive development approval over the next several years, given the considerable uncertainties that exist in relation to markets and price for the gas."

Malaysia

Malaysia's exploration sector remains in the doldrums, despite progress on the third Malaysia LNG export train and recent commissioning of Lawit and Bunga Kekwa developments.

State firm Petronas has introduced new fiscal terms aimed at promoting development of marginal fields.

Also, exploration acreage blocks have been redetermined, and new companies have been invited to participate: "Whether these measures have the intended effect of rejuvenating Malay- sia's mature oil industry remains to be seen."

Wood Mackenzie expects negotiations for sale of gas from Cakerawala find in the Malay-Thai joint development area, operated by a joint venture of Triton Energy Corp. and Petronas, will be ratified in the near term.

This could facilitate commercialization of other gas finds in the joint development area, said the analyst. First production from the area could come in 2001, and total reserves found so far could be 10 tcf of gas.

Other Southeast Asia

Foreign interest in Myanmar continues, WoodMac notes, despite sanctions recently imposed by the U.S. government. Significant numbers of license awards were made recently, particularly in the onshore central basin.

The Philippines' only major exploration and production activity recently has been in the Malampaya/Camago fields, earmarked for development mainly to supply gas-fired power generation schemes.

Wood Mackenzie said first gas is expected in January 2002, while Malampaya/Camago output could reach 40,000 b/d of liquids and 400 MMcfd of gas by 2004.

Thailand's growing maturity as a play is reflected in a dwindling number of new finds coming forward for development. The country is increasingly looking abroad for gas supplies, although six expected field developments are gas-based.

Offshore Viet Nam production performances of two recent oil field developments, Dai Hung and Rong, were described as "extremely disappointing."

"The development of the South Con Son gas project," said Wood Mackenzie, "driven by the BP/Statoil alliance, is making slow but steady progress. If development goes ahead, it is likely other gas discoveries in the adjacent area will be tied in at a later stage."

In the Australia/Indonesia Zone of Cooperation Area in the Timor Sea, BHP Petroleum Pty. Ltd. is marking progress on the first commercial discovery, the small Elang/Kakatua fields.

Plans by BHP and Phillips Petroleum Co. to develop Bayu/Undan as an LNG export scheme are likely to see next progress with unitization, based on an independent technical assessment of seismic data, due in November 1997.

The project partners are thought to have agreed to proceed with liquids production from the finds, with first production expected in 2001.

LNG production will depend on gas sales agreements and is not thought likely until 2003 at the earliest.

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