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The AAPG/Datapages Combined Publications Database

Southeast Asia Petroleum Exploration Society (SEAPEX)


Proceedings of the 2003 South East Asia Petroleum Exploration Society (SEAPEX) Conference, 2003
Pages 1-35

The Future for Asia-Pacific Oil & Gas

Michael R. Smith


Analysis of all global sources of oil shows that the world's known and yet to find reserves will be unable to satisfy 2002 level of production beyond 2022. This is a peak year — in this case the last year in which supply can meet flat demand. Of course any growth in global economic activity will increase demand bringing forward the peak year. The Asia-Pacific could take advantage of a corresponding increase in gas demand but, with its rapidly growing transport infrastructure, the region has its own dependence on imported oil as well as needing all of its currently developed indigenous gas. Without remedial action it will be seriously exposed to global competition for energy.

Of the world's 7 regions the Asia-Pacific has the second lowest oil output at just over 10% of global production, this from an area with half the world's population. Consuming 21 million barrels per day, it has to import nearly 70% and, moreover, peak production year is believed to be imminent. The region will have severe oil supply problems to contend with during the next decade. The Asia-Pacific also possesses the 3rd largest remaining gas reserves, now contributing 11% of global supply, and it seems likely that there is plenty of undeveloped resource. For gas it is expected that another decade of growth will be followed by a long plateau and then rapid decline. The region now consumes roughly as much gas as it supplies so new reserves are needed to satisfy growth and to replace oil in local and global markets.

Drilling expenditure in the Asia-Pacific is concentrated offshore. Offshore drilling levels increased through the latter part of the 1990's but are now generally in decline. A continued decline is expected over the next 5 years. There is a contradiction here. The region needs more oil and gas but only deepwater areas and remote gas fields are seeing increased investment. This is because drilling levels are opportunity-constrained. In such an environment companies and governments need to understand the problem of dwindling opportunity and consider alternatives. There are many actions that could be taken now to try to ameliorate an energy shortfall.

Presented at: 2005 South East Asia Petroleum Exploration Society (SEAPEX) Conference, Singapore, 2003

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