Company executives and analysts have said that energy companies in South Asia are boosting exploration activities, to increase natural gas output, so as to meet the growing demand drawn by recent discoveries and improved investment policies.
Recently, there have been successful upstream discoveries in Malaysia and Indonesia, part if which includes a major discovery by Mubadala Energy in the South Andaman Block, following years of underinvestment in the sector since the 2015 oil price crash.
Gas demand us expected to keep growing as economies and populations continue to grow in the Asian region. The demand which is expected to reach its peak before 2040. “There is an important window of opportunity for investments in gas and LNG (liquefied natural gas),” said Stefano Raciti, Mubadala Energy’s chief operating officer at an industry conference in Kuala Lumpur this week.
“In Southeast Asia, we believe this means continuing investing in exploration and expanding in gas production,” he added.
Mubadala is working on expanding output at its Pegaga gas field in Malaysia where two energy majors will be involved for the first time through recent acquisitions.
France’s TotalEnergies (TTEF.PA), opens new tab announced last month it bought a 50% stake in Malaysian-headquartered SapuraOMV and Chevron (CVX.N), opens new tab is acquiring Hess which has assets in Malaysia.
Also, Indonesia’s Pertamina and Malaysia’s Petronas acquired Shell’s 35% stake in the Inpex-operated Masela natural gas block.
Malaysian state energy firm Petronas, had in January, awarded production sharing contracts for six exploration blocks under a 2023 bidding round, and launched a fresh bid round this year for the exploration of ten blocks and clusters to potential investors.
Rystad Energy analyst Prateek Pandey, explained that “In the last two to three years, Indonesia and Malaysia have witnessed a good size of discoveries, which added on to the momentum overall. That pushes for more interest in exploration.”
He added that Malaysia is likely drill around 30 exploration wells this year and 35 wells in 2025, up from 8 in 2021, while Indonesia will see around 40 wells this year, versus 20 wells during the COVID pandemic.
