The upstream landscape in Asia Pacific has been redefined in recent years driven by five key themes: 1) a renewed focus on energy security with gas playing a bigger role in the future energy mix; 2) exploration generating success that could drive new development hubs and also support needed backfill to existing facilities; 3) changing above-ground dynamics that have resulted in divergent investor attractiveness in key producing countries; 4) spending upcycle which has resulted in cost escalation in the supply chain; and 5) a parallel drive towards a lower emissions future.

With these themes in mind, key upstream players in the region have showcased varying strategies to better position themselves to achieve growth in a competitive environment wherein the chase for advantaged barrels remains tight and opportunities evolve. This presentation will look at selected Asia Pacific NOCs who are establishing a bigger role outside their home country; global IOCs that are reestablishing growth in focus areas; and regional or locally focused players taking advantage of new opportunities based on their core capabilities. We will look to also address the following: How are these companies driving capital efficiency to generate growth? How are they taking on opportunities in either exploration or M&A markets to generate the needed value growth short to long term? Are companies focusing still on basin mastery or are they looking to partner and expand?

This presentation will also explore some of the challenges and enablers of the afore-mentioned themes driving the upstream landscape. In terms of exploration, will it continue to deliver in 2024 following resource growth in 2023? Clear pathways to commercializing new discoveries and unlocking stranded assets will be key in effectively tapping the region’s upside potential. There’s a projected increase in the number of FIDs and new projects onstream within the next 3-5 years. Domestic gas demand is projected to grow but more effort is required to accelerate this through infrastructure development and policy drivers. The flexibility to export gas will continue to be needed in key producing countries but upstream players need to be aware of the growing competition in the global LNG market.

Supply chain cost escalation is one the challenges upstream companies face in the region which impacts exploration and development activities. Focusing on the rig market, utilization for jackups and floaters remains high. Demand continues to be driven by development work in the region and with longer contract durations for most units, supply is expected to remain low. Day rates are also on the rise.

Lastly on energy transition, we’ll look at opportunities for upstream players and also see where movements and investment are being undertaken in this space. CCUS will be one of the opportunities.