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2
Asia-Pacific Spends & Trends 2008-2017
CONTENTS
OVERVIEW OF THE ASIA-PACIFIC REGION 4
Asia-Pacific Energy Balance 5
Energy Supply 7
Business & Macroeconomic Environment 9
ASIA-PACIFIC OIL & GAS FIELDS 10
ABBREVIATIONS 62
IMPORTANT NOTICE 63
3
Asia-Pacific Spends & Trends 2008-2017
OVERVIEW OF THE
ASIA-PACIFIC REGION
Asia-Pacific (Australia, Brunei, China, India, Indonesia, Malaysia, Myanmar, Philippines, Thailand and
Vietnam) can be characterised as a region that has seen high levels of hydrocarbon demand growth,
driven by industrialisation, urbanisation, population growth and increasing vehicle ownership.
Many of the countries in the Asia-Pacific region are non-OECD members which have been pivotal drivers
of global economic expansion in recent years. Among the key non-OECD countries in Asia-Pacific are
China, India, Indonesia, Malaysia, Thailand and Vietnam. Broadly speaking, these countries share similar
rates of crude oil demand growth, while having limited reserves to meet this demand.
Imports, typically from the Middle East, plug the gap in supply. Significant investment is underway to
increase South East Asia’s oil production capacity to decrease its dependence on imports. The gas outlook
however, is markedly different. South East Asia is one of the major liquefied natural gas (“LNG”) exporting
regions in the world and is well positioned to supply the broader Asia region’s two largest economies,
China and India. This is in addition to supplying the developed but resource poor economies of Japan,
South Korea and Taiwan. The vast majority of natural gas that is liquefied for export from South East Asia
to the broader Asian region is sourced from offshore reserves – predominantly in Indonesia and Malaysia.
With South East Asian oil demand rising at twice the global average, the region’s nations are seeking to
develop domestic reserves and ease their dependence on imports. Reversing this trend will be difficult,
and, as such, imported hydrocarbons are likely to meet an increasing share of South East Asia’s rapidly
growing energy needs. However, this should not detract from the fact that regional industry players –
both national oil companies (“NOCs”) and private energy firms, including the majors and independents,
are expected to continue their efforts developing offshore oil and gas prospects within the region itself.
Indeed, the South East Asian offshore oil and gas (“O&G”) market continues to grow, and investment
activity is likely to be robust over the longer term. This growth is reflected in forecasted offshore capital
expenditure (“Capex”) levels which show significant upstream activity over the next five year business cycle.
New offshore developments across Asia-Pacific are set to push regional Capex to 25% of the global
spend between 2013 and 2017 – the largest share of any region globally. Asia-Pacific is therefore an
increasingly important part of the offshore industry; not just as a source of demand growth but also as
a source of new investment and production.
A key country within South East Asia trying to add
value to its offshore O&G industry is Indonesia. The ASIA-PACIFIC SHARE OF GLOBAL CAPEX (%)
government has realised that deep rooted production 2013-2017
decline, coupled with a lack of recent hydrocarbon
discoveries has led to an unsustainable situation.
Indeed, declining production and significant increases Asia-Pacific 25%
in demand for liquid fuels resulted in Indonesia South America 17%
becoming a net importer in 2004. In response, the Africa 16%
Indonesian Government decreased its domestic Europe 15%
North America 12%
fuel subsidy and temporarily withdrew from OPEC.
MENA 8%
Neighbouring Malaysia also sees many of its mature FSU 7%
fields facing the prospect of production decline while
domestic gas consumption has increased. However,
4
Asia-Pacific Spends & Trends 2008-2017
the country has remained in place as a net-exporter of natural gas (not oil) and production has been
buoyed by strong natural gas demand from Japan.
Along with Japan, China, the world’s most populous country, is arguably the key driver of regional (and
also global) hydrocarbon demand dynamics. Indeed the relentless pace of Chinese industrial growth
has pushed the country to become the world’s fourth largest natural gas consumer and second largest
consumer of crude oil, driving the country’s key operators that primarily consist of NOCs, to maximise
production and expand reserves. India has seen similar levels of hydrocarbon demand growth, which
has also driven increases in natural gas production. In fact, India overtook the (albeit mature) UK in 2011
as a natural gas producer, however the country has failed to replicate this success with regards to oil
production.
Further South, Australia is suitably placed to meet South East Asian, Chinese and Japanese natural gas
demand and has vast reserves in place to achieve this. Moreover, the country has the potential to become
the world’s largest natural gas exporter if these reserves are fully exploited.
Asia-Pacific
4,000
North America
3,000 Europe
MENA3
2,000
Former Soviet Union
South America
1,000
Africa
0
1995 1997 1999 2001 2003 2005 2007 2009 2011
1
IEA, World Energy Outlook, 2012 (new policies forecast)
2
BP Statistical Review of World Energy 2012
3
MENA: Middle East & North Africa
5
Asia-Pacific Spends & Trends 2008-2017
Adding to this, the region’s import burden is rising just as oil prices reach record levels. This is taking its toll
on fiscal accounts as many developing economies in the region run increasingly expensive fuel subsidies.
Many policymakers are therefore prioritising new offshore developments in deep and ultra-deep waters
as a means of reversing declining production and reducing the burden on the public finances. The most
prominent of these new offshore plays include Australia’s Briseis, Scarborough, and Laverda; Malaysia’s
Rotan, Gumusut-Kakap, and Petai; India’s KG-D6 complex; and Indonesia’s Gehem project. Towards the
end of the forecast period work could also start on the likes of Timor Leste’s Sunrise, and Indonesia’s
Gendalo fields. At the same time, Australia is emerging as a major supplier of LNG, fed in part by new
deepwater fields such as Achilles and Janz. These projects will be critical to meeting the region’s
growing demand as gas takes an increasing share of Asia-Pacific’s energy mix.
As detailed below, Asia-Pacific’s consumption of primary energy has grown rapidly over the last eleven
years from 2,600Mtoe in 2000 to 4,750Mtoe in 2011. The most significant driver of this demand growth has
stemmed from coal (+125% growth). However, demand for natural gas in Asia-Pacific is expected to grow
rapidly over the next twenty years whilst demand for coal is expected to plateau over the same period.
4,500
4,000
3,500 Oil
3,000
Gas
2,500
Coal
2,000
1,500 Nuclear
1,000
Hydro
500
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
4
BP Statistical Review of World Energy 2012
6
Asia-Pacific Spends & Trends 2008-2017
While the developing economies of the Asia-Pacific are collectively heading towards a consumption level
rivalling that of North America, current estimates reveal that the region’s top six oil producers (Brunei,
China, India, Indonesia, Malaysia and Vietnam) possess just 2.2% of the world’s proven oil reserves.
Deepwater exploration may help to boost the reserve base somewhat but it is very unlikely to reverse the
region’s increasing dependence on imported sources of crude oil. Indeed, almost all Asia-Pacific countries
are currently dependent on oil imports (only Brunei is a net exporter according to the BP statistical
Review of World Energy 2012) despite the fact that many have large volumes of domestic production.
5
BP Statistical Review of World Energy 2012
6
BP Statistical Review of World Energy 2012
7
Asia-Pacific Spends & Trends 2008-2017
The rapid industrialisation of economies such as India, China, and the ASEAN-57 means that the region’s
oil deficit is only likely to grow. Indeed, the IEA anticipates that net imports to China alone could exceed
12.5 million bpd by 2035, up almost 8 million bpd from present levels8. The story for India is the same;
net imports are projected to grow by 4 million bpd to nearly 7 million bpd by 20359. The reliance on
imports in developing Asia as a whole increases from 56% of total needs in 2010 to 84% in 2035.
The outlook for natural gas is more positive. Indonesia, Malaysia, and Australia are all currently net
exporters, supplying the region with approximately 98Bcm of pipeline gas and LNG10. That volume is likely
to increase as new supply from deepwater and unconventional plays begins to come on-stream. Australia
is leading the way and may well become the world’s largest supplier of LNG by the end of the decade.
While these new volumes are likely to limit the import burden, regional consumption is set to explode as
gas begins to eat away at the share of coal and nuclear in the region’s energy mix. Demand in China alone
is projected to rise from less than 10Bcm in 2009 to 125Bcm in 2020 and 210Bcm in 2035. As a result,
Asia-Pacific will still require substantial supplies of gas from other regions to meet its long term needs.
LNG will remain the dominant form of trade given Asia-Pacific’s disparate geography and distance from
the main producing areas of the Middle East, Russia and Central Asia.
7
Indonesia, Malaysia, Philippines, Thailand, and Vietnam
8
IEA, World Energy Outlook (2011), ‘New Policies Scenario’ data.
9
IEA, World Energy Outlook (2011), ‘New Policies Scenario’ data.
10
BP Statistical Review of World Energy 2012
11
BP Statistical Review of World Energy 2012
8
Asia-Pacific Spends & Trends 2008-2017
12
World Bank report, Global Economic Prospects, June 2012.
13
IMF report, Regional Economic Outlook – Asia-Pacific, October 2012.
14
IEA, World Energy Outlook, (2011)
9
Asia-Pacific Spends & Trends 2008-2017
10
Asia-Pacific Spends & Trends 2008-2017
ASIA-PACIFIC
RESERVES & PRODUCTION
According to published data, Asia-Pacific holds up to 44.15 billion barrels of
crude oil and 16.34Tcm of natural gas; accounting for 2.5% of global oil 2.5% world’s total
reserves and 8.5% of the global proven gas reserves. Regional oil production oil reserves
has historically trended at around eight million barrels per day (“bpd”).
China is the most significant regional oil player with total proven oil reserves of
14.7 billion barrels. Chinese total liquid (crude oil and condensates) production
is currently estimated at 4.1 million bpd, with the offshore share estimated at 8.5% world’s total
one million bpd (approximately 23% of China’s oil daily production). gas reserves
According to the EIA,
TOTAL ASIA-PACIFIC OIL RESERVES BY COUNTRY
China, Asia-Pacific’s – ONSHORE & OFFSHORE
largest producer, saw Total Proven
oil production increase China 33%
Oil Reserves
by 24% over the 2001 Malaysia 13% (Billion Barrels)
to 2011 period. India India 13% by Country (EIA):
has also driven up oil Vietnam 10% China 14.70
production, which has Indonesia 9% Malaysia 5.90
Australia 9% India 5.68
increased by 18% during
Myanmar 7% Vietnam 4.40
the same time span, Brunei 3% Indonesia 3.99
although the country Other 3% Australia 3.90
remains a relatively small Philippines 0% Myanmar 3.20
producer. Elsewhere in Brunei 1.10
Asia-Pacific, many other Other 1.14
key producing countries, including Malaysia and Indonesia, have seen declining Philippines 0.14
levels of oil production over the past 10 years. Other smaller Asian oil producers Total 44.15
including Vietnam, Brunei and Australia have also seen oil production fall in the
last decade. The Philippines and Myanmar buck this trend however, with both
countries seeing production increase.
ASIA-PACIFIC OIL PRODUCTION (000s OF BARRELS PER DAY) – ONSHORE & OFFSHORE
9,000
8,000
7,000 China
6,000 Indonesia
Malaysia
5,000
India
4,000 Australia
3,000 Vietnam
Brunei
2,000
Other
1,000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
11
Asia-Pacific Spends & Trends 2008-2017
Unlike the oil sector, Asia-Pacific natural gas production has grown significantly from just over 282Bcm
in 2001 to almost 480Bcm in 2011. China, Australia, Malaysia and Indonesia have contributed to the
majority of this output growth, with China expanding production from just over 30Bcm to 103Bcm in 2011.
No other country has matched this level of production; however Australian production (which has already
increased by 41% over the previous decade) has arguably the most potential for growth going forward.
This is due to the vast natural gas reserves held offshore in the country’s Browse-Basin, North West
Shelf and off the coast of East Timor.
Total Proven Gas
Reserves (Tcm) by
Country (EIA):
TOTAL ASIA-PACIFIC GAS RESERVES BY COUNTRY
(TCM) – ONSHORE & OFFSHORE Australia 3.8
China 3.1
Australia 23% Indonesia 3.0
China 19%
Malaysia 2.4
Indonesia 18%
India 1.2
Malaysia 15%
Pakistan 0.8
India 7%
Pakistan 5%
Vietnam 0.6
Vietnam 4% Bangladesh 0.4
Bangladesh 2% Brunei 0.3
Brunei 2% Thailand 0.3
Thailand 2% Myanmar 0.2
Other 2% Other 0.3
Myanmar 1% Total 16.3
12
Asia-Pacific Spends & Trends 2008-2017
13
Asia-Pacific Spends & Trends 2008-2017
ASIA-PACIFIC
CAPEX FORECASTS 2008-2017
This section provides an overview of offshore investment potential across the Asia-Pacific region.
Capex forecasts for the region as a whole have been broken down by: operator, build process type,
market segment, water depth and by country.
Asia-Pacific’s greenfield O&G investment levels are primarily driven by NOCs and IOCs – with a relatively
lower contribution from independent operators. Capex levels, split by operator, are provided in the figure
above. As shown, the market is relatively fragmented with a large number of players contributing to overall
capital outlay. In terms of NOCs, the major regional players include; China’s CNOOC, Malaysia’s Petronas,
India’s ONGC, Thailand’s PTT, Vietnam’s PetroVietnam and Indonesia’s Pertamina. Major regional IOCs
include Chevron, Shell, ExxonMobil, ConocoPhillips and Eni. In addition to NOCs and IOCs a host of
independent operators complete E&P activities across the region, these include; Reliance, Murphy,
Husky, Premier and Inpex.
14
Asia-Pacific Spends & Trends 2008-2017
Whilst the Asia-Pacific region is open to foreign investment, participation is often strictly regulated.
In Malaysia, for example, participation in the oil and gas industry contains several barriers to entry
meaning that business within this sector is only likely to be awarded to external contractors in the most
specific of circumstances. The primary driver behind this situation is the Petroleum Development Act of
1974, which established Petronas as the owner and developer of all hydrocarbon resources in Malaysia.
Petronas was given the remit of developing these reserves with as much of the value being retained within
Malaysia as possible, and, due to its mineral ownership rights, all companies wishing to work within
Malaysia must partner with Petronas in some form. This means that whilst companies such as Murphy
and Shell are active within Malaysia, they are working in strict partnership with Petronas.
Capex over the historical 2008-2012 period totalled ASIA-PACIFIC CAPEX BY OPERATOR 2008-2012
an estimated US$85bn. Of this capital outlay the
primary operators included CNOOC (12%), ONGC
(9%), PTT (8%), Chevron (8%), Petronas (8%), Other (Ex-Top 7) 46%
Woodside (5%) and Shell (4%). CNOOC’s primary CNOOC 12%
ONGC 9%
spending over the period was directed towards
Chevron 8%
the development of their deepwater Liwan project,
Petronas 8%
the shallow water Jinzhuo 25-1 field and the PTT 8%
currently under development shallow water Woodside 5%
Bozhong 29-4S project. Shell 4%
Capex levels over the forecast period from 2013- ASIA-PACIFIC CAPEX FORECAST BY OPERATOR
2017 total an estimated US$152bn. The primary 2013-2017
operators over this period include Chevron (8%),
Woodside (6%), Shell (6%), CNOOC (5%), ONGC
Other (Ex-Top 7) 61%
(5%), Petronas (5%), and PTT (4%). The Asia- Chevron 8%
Pacific market is likely to become increasingly Shell 6%
fragmented over the forecast period as a greater Woodside 6%
number of oil companies become active across CNOOC 5%
the region. In total, 61% of Capex is forecast to ONGC 5%
be invested by operators falling in the ‘Other’ Petronas 5%
PTT 4%
category, as shown opposite.
15
Asia-Pacific Spends & Trends 2008-2017
• Fastest Growing Capex 2008-2017: Procurement and Construction / Development Drilling (CAGR 11%)
• Fastest Growing Capex 2008-2012: Detailed Engineering (CAGR 16%)
• Fastest Growing Capex 2013-2017: Procurement and Construction / Development Drilling (CAGR 5%)
This section discusses Capex levels by build process type. In this respect, build process type refers to
the stage of development of an offshore oil and gas project. The build processes include (in chronological
order); Detailed Engineering, Procurement & Construction, Development Drilling and Offshore Installation.
Following the same ASIA-PACIFIC CAPEX BY BUILD PROCESS TYPE 2008-2017 (US$M)
pattern and trends 35,000
as the wider global
30,000
industry, Capex in the
Asia-Pacific is primarily 25,000
directed towards the
20,000
procurement and
construction of offshore 15,000
infrastructure. Second
10,000
to procurement and
construction is offshore 5,000
installation, which is,
0
in turn, followed by 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
development drilling
Detailed Engineering Development Drilling
and detailed
engineering in roughly Install Procurement And Construction
equal proportions.
Asia-Pacific is the leading global region in terms of procurement and construction capabilities. Indeed,
following the region’s significant successes in the ship building sector, the region’s offshore fabrication
sector is now the most capable of any globally. Today, Asia-Pacific is home to the world’s largest
constructors of FPSOs, including; Sembcorp Marine of Singapore, Keppel Corporation of Singapore
and the three heavyweight South Korean shipyards of Hyundai Heavy Industries (“HHI”), Samsung Heavy
Industries (“SHI”), Daewoo Shipbuilding and Marine Engineering (“DSME”). These major yards, alongside
other highly capable yards across Asia-Pacific, are well placed to capture future procurement and
construction contracts for offshore developments across Asia-Pacific.
16
Asia-Pacific Spends & Trends 2008-2017
The historical split of Capex by build ASIA-PACIFIC CAPEX BY BUILD PROCESS TYPE
process type shows that procurement 2008-2012
and construction activity accounted
for 67% of total field development cost
over the 2008-2012 period. The largest
projects in this respect include Procurement and Construction 67%
Liwan (China), Zawtika (Myanmar), Install 21%
Kim Long (Vietnam), Reindeer Detailed Engineering 9%
(Australia), Wanaea (Australia) Development Drilling 3%
and Tapis (Malaysia).
Looking forward over the forecast ASIA-PACIFIC CAPEX FORECAST BY BUILD PROCESS TYPE
period, the procurement and 2013-2017
construction sector is set to continue
to account for the greatest share of
field development Capex. However,
its share is expected to decline from Procurement and Construction 64%
67% to 64% as development drilling Install 22%
activity increases proportionally. Detailed Engineering 7%
Indeed, development drilling Capex Development Drilling 7%
is expected to increase significantly
though the forecast period, driven
by an increase in wells numbers,
complexity and the water depth
in which they will be drilled.
17
Asia-Pacific Spends & Trends 2008-2017
This section discusses Capex levels by market segment. In this respect, market segment has been
broken down into platforms, pipelines, control lines, subsea completions and single point moorings.
Investment on pipeline and fixed platform projects is forecast to dominate regional offshore oil and gas
Capex. These two markets will also be the main contributors to the forecast increase in regional Capex,
with pipeline Capex expected to increase from US$41.3bn to US$67.2bn, and platforms Capex expected
to increase from US$36.7bn to US$62.2bn over the 2008-2017 period.
The subsea, umbilicals, risers and flowlines (“SURF”) and trunk/export markets are expected to gain
ground over the conventional line installation market. However, conventional lines continue to represent
the largest market segment, both in terms of Capex and in pipeline length installed. In terms of overall
growth rate, the subsea market is expected to be particularly strong, increasing from US$4.2bn to
US$16.5bn over the forecast period.
Although Capex on
deepwater developments ASIA-PACIFIC CAPEX BY MARKET SEGMENT 2008-2017 (US$M)
is expected to gather
35,000
momentum, the historical
dominance of shallow 30,000
water plays has meant
25,000
that the use of subsea
infrastructure has not 20,000
been as extensive in
15,000
comparison to other
regions. Robust fixed 10,000
platform Capex is reflective
5,000
of the dominance of shallow
water developments in 0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Asia-Pacific, although it is
anticipated that deepwater ControlLine Pipeline Platform SPMs SubseaCompletion
development in the region
will also gather momentum.
18
Asia-Pacific Spends & Trends 2008-2017
The most capital intensive development under planning for the 2012-2017 timeframe is the Liwan pipeline
project, located in the South China Sea. The contract award to construct and install the Liwan pipeline
was won by Saipem in May 2011. The contract includes the engineering, procurement, construction and
installation (“EPCI”) of two 22inch, 79km pipelines, umbilicals and the transportation/installation of a
subsea production system linking the wellheads to the processing platform. It is expected the pipeline
component of the Liwan 3-1 development will require an investment of some US$2.26bn. The Liwan
project is due for completion in 2014.
Platform and pipeline Capex has dominated ASIA-PACIFIC CAPEX BY MARKET SEGMENT 2008-2012
the historical spend in Asia-Pacific by market
segment with 48% and 43% of total capital
outlay respectively. For platforms more
specifically, the sub-split shows that fixed
structures have been more prevalent in Asia- Pipeline 48%
Platform 43%
Pacific having accounted for an estimated 77%
Subsea Completion 5%
of total platform Capex. The primary markets Control Line 2%
for floating platform installations have included SPMs 2%
Australia (Kitan, Van Gogh, Stybarrow, Vincent),
Malaysia (Kikeh, Bunga Orkid, Sepat), Vietnam
and Indonesia.
The forecast for Capex by market segment in Asia-Pacific suggests that operators are slowly changing
the way they develop their assets. Indeed, the subsea completion market is expected to jump from
5% of total spend in the historical period to 11% of total spend in the forecast period (this relates to
an increase from US$4.2 to US$16.4bn). This increase is driven both by the increasing use of FPSOs
across the Asia-Pacific region as well as the deployment of subsea satellite wells tied back into
existing infrastructure.
For platforms, floating structures are expected ASIA-PACIFIC CAPEX FORECAST BY MARKET SEGMENT
to account for an increasing proportion of total 2013-2017
spend. Indeed, having only accounted for 23%
of platform Capex in the historical period,
floaters are set to account for 44% of platform
Capex in the forecast period. This growth is Pipeline 44%
driven by projects right across Asia-Pacific. Platform 41%
Subsea Completion 11%
Control Line 2%
SPMs 2%
19
Asia-Pacific Spends & Trends 2008-2017
Water depth groups are referenced throughout this Report, and are defined as: Shallow Water, 0-499m;
Deep Water, 500-1499m and Ultra-deep Water, >1,499m. These water depth definitions have in some part
been defined by the upper water depth limits for certain technologies, i.e. fixed platforms are very rarely
installed in 500m of water. The figures and commentary below describe investment levels by water depth
group and how they have changed over the last fi ve years.
30,000
25,000
Shallow
20,000
Deepwater
15,000
5,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Shallow water fields have dominated offshore Capex in the Asia-Pacific region over the last fi ve years.
From 2008 to 2012 this category absorbed US$82.1bn or approximately 91% of the total spend. The largest
share of this shallow water Capex went to Australia with US$11.6bn while developments in India, Malaysia,
Thailand, and Vietnam all drew spending of over US$8bn each. Shallow water developments are forecast
to continue to absorb the lion’s share of offshore Capex in Asia-Pacific between 2013 and 2017.
However, deepwater and ultra-deepwater developments are set to play an increasingly significant role over
the course of the forecast period with a significant number of developments centred on the South China
and Celebes Seas (see Southeast Asia Deepwater Fields to 2017 Map below). In all, deepwater’s share
of total spending will grow from 9% of the market in 2008-2012, to 17% in 2013-2017.
20
Asia-Pacific Spends & Trends 2008-2017
These deepwater plays will be focused primarily on four countries: Australia, Malaysia, India, and Indonesia.
Malaysia and Australia alone will make up 58% of the total deepwater spend between 2013 and 2017 on the
back of flagship developments such as Australia’s Briseis, Scarborough, and Laverda and Malaysia’s Rotan,
Gumusut-Kakap, and Petai.
Ultra-deepwater developments, which were non-existent over the last fi ve years, will command US$5.3bn
in Capex from 2013-2017. Capex will be focused primarily on India and Indonesia. India alone is forecast
to see US$3.7bn, or 69% of ultra-deepwater spending, boosted by the approval of Reliance Industries’
US$1.53bn investment programme for four satellite fields within the KG-D6 block. The plan, which had
been awaiting government approval for two years, will see four fields brought in to production by 2016
with output of approximately 353Mcf/d.
Indonesia’s Gehem project will also require approximately US$1bn in spending between 2013 and 2017.
Other fields such as Australia’s Achilles, Timor Leste’s Sunrise, and Indonesia’s Gendalo could require
significant investment by the end of the forecast period. The latter may require as much as US$7-8.5bn
to bring to production, though the majority of this spend falls outside the forecast period of this report.
21
Asia-Pacific Spends & Trends 2008-2017
An estimated 91% of total Asia-Pacific Capex was ASIA-PACIFIC CAPEX BY WATER DEPTH GROUP
directed towards shallow water developments 2008-2012
over the historical period.
Shallow 91%
Deepwater 9%
Like the wider global offshore industry, operators ASIA-PACIFIC CAPEX FORECAST BY WATER DEPTH
in Asia-Pacific are beginning to explore, appraise GROUP 2013-2017
and develop fields in increasingly deeper waters.
This trend is reflected in the region’s forecast
Capex profile by water depth, where shallow
water Capex is set to fall from 91% to 80%,
deepwater Capex to rise from 9% to 17% Shallow 80%
and ultra-deep water to rise from zero to 3% Deepwater 17%
of total Capex. Ultra-Deep Water 3%
22
Asia-Pacific Spends & Trends 2008-2017
ASIA-PACIFIC
CAPEX BY COUNTRY
The bullet points below provide an overview of the primary capital investment markets across the
Asia-Pacific region.
An increase in offshore exploration and production activity is expected to drive Capex levels across the
Asia-Pacific region. Over the period of analysis (2008-2017), Asia-Pacific offshore Capex is expected to
amount to a total of US$237.4bn, of which a far greater percentage is expected to fall into the forecast
period, as shown by the figure below. Particularly strong levels of Capex are expected to occur in
Australia (US$59bn), China (US$32bn), Southeast Asia (Malaysia US$37bn, Indonesia US$25.6bn) and
India (US$30.2bn). Looking forward, Australia is expected to attract the largest share of Capex over the
2013-2017 forecast period with an estimated investment of US$45.3bn.
30,000
Australia
25,000
Malaysia
20,000 China (PRC)
India
15,000 Indonesia
10,000 Vietnam
Thailand
5,000 Other (Ex-Top 7)
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Over the previous fi ve year period, the Chinese offshore market has attracted the highest level of
infrastructure Capex. Indeed, Chinese Capex reached an estimated US$15.8bn over the period – equating
to 18% of wider regional spend. Malaysia (17%), Australia (16%), India (13%), Thailand (11%), Vietnam (10%)
and Indonesia (8%) account for the remaining top-seven countries by Capex over the historical period.
The largest single projects contributing to this capital spend have included developments such as ONGC’s
Mumbai High development offshore India, Husky’s deepwater Liwan 03-1-1 project offshore China,
Woodside Energy Ltd.’s Pluto development offshore Australia and Shell’s Gumusut-Kakap (SB-J & SB-K)
development offshore Malaysia.
23
Asia-Pacific Spends & Trends 2008-2017
Whilst China saw the greatest capital investment over the historical period, Australia is expected to
attract the greatest Capex level over the forecast period. Indeed, current estimates suggest Australia
will account for 30% of total Asia-Pacific Capex between 2013 and 2017. This growth in Capex is being
driven by the continued development of Australian LNG projects and development of associated pipelines,
platforms and subsea infrastructure. Malaysia (15%), China (11%), India (13%), Indonesia (12%), Vietnam
(7%) and Thailand (6%) make up the remaining top countries by Capex. The largest single projects due
for development over the forecast period are all offshore Australia with the excpeption of Inpex’s Abadi
in Indonesia. The Australian developments include Inpex’s Ichthys, ConocoPhillip’s Poseidon/Kronos,
Woodside’s Calliance and Hess’s Briseis (Equus Project). Other significant Australian projects include
Sunrise, Wheatstone, Scarborough, Prelude and Cash/Maple.
24
Asia-Pacific Spends & Trends 2008-2017
Australia
Country Profile
Business & Macroeconomic Environment
The rapid industrialisation of Asia-Pacific’s developing economies has driven
a global commodities boom of which Australia has been a primary beneficiary. 3% GDP growth
While growth is likely to remain healthy, there are signs that China’s slowdown in 2013
is beginning to have an impact on Australia’s economy.
As a result, real GDP growth is expected to slow from 3.3% in 2012 to 3% in 2013. While this slowdown is
a concern, Australia remains one of the best places to do business in Asia-Pacific. The 2013 World Bank
Doing Business Report ranks the country 10th in the world, a rise of one place on last year’s measure15.
Ichthys
The Ichthys project is located in the Browse Basin and is operated by Inpex (76%) in partnership with
Total (24%). The offshore field has estimated reserves of 12.8Tcf and 527 million barrels of condensate.
The project will use an LNG facility to process the gas from the Ichthys field16. In December 2011, the
project’s operators signed a binding sales and purchase agreement with a consortium of fi ve Japanese
utility companies for a total of 4 mega tonnes per annum (“Mtpa”) of LNG over a period of 15 years.
This means that around 70% of the LNG produced from the Ichthys project will be exported to Japan –
the rest is targeted towards other East Asian countries. The Final Investment Decision (“FID”) was signed
in January 2012, with construction expected to start shortly. LNG production is likely to start in 2017.
15
World Bank report, Doing Business Economy Profile: Australia (2013)
16
http://www.inpex.com.au/projects/ichthys-project.aspx
25
Asia-Pacific Spends & Trends 2008-2017
Gorgon
The Gorgon project is one of the world’s largest natural gas projects and is the largest single source of
natural gas in Australia. The project will benefit both international and domestic markets. The Gorgon
Project is operated by Chevron and is owned by a joint venture, which is comprised of Chevron (47% equity),
ExxonMobil (25%), Shell (25%), Osaka Gas (1.25%), Tokyo Gas (1%) and Chubu Electric Company (0.417%).
The area is located between 130km and 200km off the coast of North-West Australia. The project is made
up of several fields which are located in varying water depths ranging from 220m to 1,300m. The fields will
be connected to the onshore LNG facilities at Barrow Island by a 34” subsea pipeline. A 90km pipeline will
connect facilities on Barrow Island to the Australian mainland from which supplies will be made available
to the Australian domestic market.
Pluto
The Pluto development is owned and operated by Woodside (equity 90%) with Tokyo Gas (5%) and Kansai
Electric (5%) completing the consortium. The development was approved in July 2007. The foundation
project utilizes gas from the Pluto field, which is located in the Carnarvon Basin, about 190km north-west
of Karratha in Western Australia. The Pluto gas field has reserves of 4.1Tcf17. In August 2007, a Heads of
Agreement was signed between Woodside and Tokyo Gas for the supply of between 1.5 and 1.75 Mtpa
of LNG for 15 years, with an option for a fi ve year extension. Pluto was originally due on-stream in 2010,
however first gas was delayed and production did not start until March of 2012.
Greater Sunrise
The Greater Sunrise development is located in the Timor Sea. Operated by Woodside, Greater Sunrise is
being developed by the Sunrise joint venture, which consists of Woodside (33.4% equity), ConocoPhillips
(30%), Shell (26.6%) and Osaka Gas (10%). The development consists of the Sunrise and Troubadour gas
fields. It is located 150km south-east of Timor-Leste and 450km north-west of Darwin. The two fields
have combined reserves of 5.13Tcf dry gas and 225.9 million barrels of condensate18. The fields which
make up the Greater Sunrise project are not expected to be brought in to production before 2019.
Australia Capex
The main driver of Australian Capex over the next five years will be the massive
Carnarvon basin gas-to-LNG projects mentioned above. These will drive total Investment
offshore spending in the country to US$45.3bn over the next five years, up from in Australia
US$44.6bn over the last five years. This spending represents the largest share represents
of regional Capex at 24.9% of the total Asia-Pacific spend of US$152.1bn in 24.9% of the
the 2013-2017 period. total for
17
http://www.woodside.com.au/our-Business/pluto/Pages/default.aspx Asia-Pacific
18
http://www.woodside.com.au/Our-Business/sunrise/Pages/default.aspx
26
Asia-Pacific Spends & Trends 2008-2017
In terms of total Capex by operator type, Woodside AUSTRALIA CAPEX FORECAST BY OPERATOR
(21%), Inpex (16%), Chevron (11%), ConocoPhillips 2013-2017
(12%), Shell (7%), ExxonMobil (7%) and Hess (5%)
are forecast to be the most active players in the
Australian offshore O&G market between 2013 and Other 21%
Woodside 21%
2017. Whilst Apache ranks in seventh place over
Inpex 16%
the entire 2008-2017 period, much of this Capex
ConocoPhillips 12%
is associated with the historical period. Therefore, Chevron 11%
Hess takes its place as the seventh largest Shell 7%
operator by Capex for the forecast period as it ExxonMobil 7%
develops the Briseia, Glencoe, Toporoa, Rimfire Hess 5%
and Nimblefoot projects. The remaining 21% of
Capex, equating to nearly US$10bn, will be split
amongst a host of smaller independent operators.
27
Asia-Pacific Spends & Trends 2008-2017
10,000
8,000
6,000
4,000
2,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
28
Asia-Pacific Spends & Trends 2008-2017
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Over the 2013-2017 period, an estimated 81% AUSTRALIA CAPEX FORECAST BY WATER DEPTH
of offshore capital investment is forecast to 2013-2017
be directed towards shallow water projects,
the remainder will be spent in deep and
ultra-deep water.
Shallow 81%
Deepwater 18%
Ultra-Deep Water 1%
29
Asia-Pacific Spends & Trends 2008-2017
Ichthys Inpex Browse Inpex Browse Pty Ltd (66.1%), 2000 2019 230 Under 2,784 Semi-Sub, 7,229
(WA-285-P Pty Ltd Total Exploration Australia Development Ship-
Browse) SA (30%), Tokyo Gas Co (1.6%), Shaped
(Ex Brewster) Osaka Gas Company (1.2%),
Chubu Electric Power Company
(0.7%), Toho Gas Company
(0.4%)
Poseidon/ ConocoPhillips ConocoPhillips Australia 2009 2019 300 Possible 1,354 Piled, 4,220
Kronos Australia Exploration Co (51%), Karoon Semi-Sub,
(WA-315-P & Exploration Co Gas Australia Ltd (49%) Ship-
WA-398-P) Shaped
Calliance Woodside Woodside Energy Ltd (50%), 2000 2016 420 Firm Plan 1,056 Piled, 3,053
(WA-31-R Energy Ltd BP Developments Australia TLP
Browse) Pty Ltd (16.7%), Chevron
(Ex Brecknock Australia Pty Ltd (16.7%),
Sth) BHP Billiton Petroleum Pty
Ltd (8.3%), Shell Development
(Australia) Pty Ltd (8.3%)
Briseis Hess Hess Exploration (Carnarvon) 2008 2019 1,118 Probable 149 Semi-Sub, 2,193
(WA-390-P) Exploration Pty Ltd (100%) Ship-
(Equus Project) (Carnarvon) Shaped
Pty Ltd
Wheatstone Chevron Chevron Australia Pty Ltd 2004 2016 216 Under 617 Gravity 1,971
(WA-17-R & Australia (80.2%), PE Wheatstone Pty Development
WA-253-P) Pty Ltd Ltd (10%), Shell Development
(Australia) Pty Ltd (8%),
Kyushu Electricity Company
(1.8%)
Scarborough Esso Australia Esso Australia Resources Ltd 1979 2018 912 Probable 1,322 Semi-Sub 1,962
(WA-1-R) Resources Ltd (50%), BHP Billiton Petroleum
Pty Ltd (50%)
Prelude Shell Shell Development (Australia) 2007 2017 200 Under 649 Ship- 1,923
(WA-371-P) Development Pty Ltd (67.5%), Inpex Browse Development Shaped
(Australia) Pty Ltd (17.5%), Korea Gas
Pty Ltd Corporation (10%), Chinese
Petroleum Corporation (CPC)
(5%)
Sunrise Woodside Woodside Energy Ltd (33.4%), 1974 2019 180 Possible 611 Piled, 1,857
(Greater Sunrise Energy Ltd ConocoPhillips Australia Ship-
NAGV) Exploration Co (30%), Shell Shaped
Development (Australia)
Pty Ltd (26.6%), Osaka Gas
Company (10%)
Cash/Maple PTTEP PTTEP Australasia Pte Ltd 1989 2018 125 Probable 119 Ship- 1,477
(AC/RL7) Australasia (100%) Shaped
Pte Ltd
Evans Shoal Shell Shell Development (Australia) 1989 2021 160 Possible 1,387 Piled, 1,274
(NT/P48) Development Pty Ltd (32.5%), Eni Australia Ship-
(Australia) Ltd (32.5%), Petronas Australia Shaped
Pty Ltd Pty Ltd (25%), Osaka Gas
Company (10%)
30
Asia-Pacific Spends & Trends 2008-2017
India
Country Profile
Business & Macroeconomic Environment
While India’s economy continues to grow well above the global average, its
performance is less impressive measured against regional peers. According 6% GDP growth
19
to the IMF, India’s real GDP growth is expected to average 6% in 2013 as in 2013
supply and infrastructure constraints and fiscal concerns took their toll on
investor sentiment and growth. Infl ation also remains above trend for the region, limiting Delhi’s scope
for monetary stimulus. Perhaps of greatest concern, however, are the large food and fuel subsidies
designed to ease the burden on the country’s vast low-income rural population. These mean that any
future commodity price rises are likely to have a severe impact on already stretched public finances.
India remains 132nd in the 2013 World Bank Global Economic Prospects Report20 largely due to low
scores for enforcing contracts, dealing with construction permits, starting a business, and paying taxes.
Key Fields
As of 2012, the Indian offshore industry comprises of 29 currently producing fields and 104 discovered but
undeveloped prospects. The majority of producing offshore fields have been developed in shallow water in
India. Indeed, just three are currently considered deepwater (Dhirubhai D26 (KG D6 MA) (KG-OSN-2001/2),
Dhirubhai 3 (D6-K) (KG-DWN-98/3) and Dhirubhai 1 (D6-A) (KG-DWN-98/3)). Looking ahead, deepwater
fields are expected to become increasingly important in India as 24 of the undeveloped fields are located
in water depths exceeding 500m.
19
IMF report, Regional Economic Outlook – Asia-Pacific, October 2012.
20
World Bank report, Doing Business Economy Profile: India (2013)
31
Asia-Pacific Spends & Trends 2008-2017
Mumbai High
Having been discovered in 1974 and brought in to production in 1976, the Mumbai High complex is
India’s largest oil field, both offshore and onshore, and produces oil at a rate of approximately 245,000
bpd. The Mumbai High fields also produce associated gas at a rate of 140Mcf per day. The shallow
water region is located 161km north-west of Mumbai in the Arabian Sea. The field is 100% owned and
operated by India’s state-owned NOC, ONGC. Mumbai High has been undergoing redevelopment over
the last decade in order to reverse production declines. In 2009, ONGC announced the second phase of
Mumbai High’s redevelopment, in which the NOC stated that it will produce an additional 127.2 million
barrels of oil and 103Bcf of natural gas by 2030.
Krishna Godavari, Dhirubhai and Deen Dayal West offshore gas fields are located off India’s East Coast
in the Bay of Bengal and reflect India’s efforts to develop its offshore reserves to meet rapidly growing
domestic natural gas consumption. Key drivers for the investment offshore India include several fields
in the Krishna-Godavari and Dhirubhai deepwater areas that are expected to come on-stream in the near
term. Seven fields in the Krishna-Godavari group are expected to be developed by 2018, the largest of
which is Krishna-Godavari UD-1 (KG-DWN-98/2) (D5), with reserves of 2,400Bcf.
Krishna Godavari
Within the Krishna-Godavari basin are the Deen Dayal West and Central fields, which are expected to
come on-stream in 2013 and 2015 respectively, both are shallow water developments. Deen Dayal West
has 1,600Bcf of gas reserves while Deen Dayal Central has reserves of 1,260Bcf. Both fields are operated
by the Gujarat State Petroleum Corporation, which has an 80% share of a consortium with GeoGlobal
Resources and Jubilant Energy, both of which have a 10% share.
Dhirubhai
A further 22 fields in the Dhirubai group are expected to come on-stream over the next decade, the
largest two of which are Dhirubhai East and South (both 1,000 Bcf). These fields were originally held
by Reliance and Niko Resources with a 90% and 10% respective share. However, in 2010 Reliance and
BP announced a strategic partnership in which BP assumed a 30% stake in 23 of Reliance’s operations
offshore India. For BP the deal allows for an easy entry into India’s exploration sector whilst for Reliance
it will provide access to IOC’s expertise in locating and producing oil and gas from deepwater fields.
The deal should also ease tensions between the Indian Ministry of Petroleum and Natural Gas and
Reliance, concerning the decrease in gas production from the latter’s offshore assets.
India Capex
Key drivers of Capex offshore India include several fields in the Krishna-
Godavari and Dhirubhai deepwater areas that are expected to come on- Investment
stream in the near term. Seven fields in the Krishna-Godavari group are in India
expected to be developed by 2018, the largest of which is Krishna-Godavari represents
UD-1 (KG-DWN-98/2) (D5), with reserves of 2.4Tcf. 13% of the
Indian deepwater gas plays are expected to be a significant hub of Asian total for
offshore natural gas activity over the forecast period. Asia-Pacific
32
Asia-Pacific Spends & Trends 2008-2017
The development of these reserves is crucial for India as the share of natural gas of total energy demand
is expected to rise rapidly. As a result, the development of domestic deepwater reserves should provide
India with some ability to mitigate against growing dependence on natural gas imports in the form of LNG.
In terms of total capital outlay, ONGC and INDIA CAPEX FORECAST BY OPERATOR 2013-2017
Reliance are forecast to account for 79%
of total spend over the 2013 to 2017 period
with 42% and 37% share respectively. ONGC 42%
The remaining Capex is expected to stem Reliance 37%
Essar 6%
from a BG/ONGC/Reliance partnership,
Other 6%
relating to the development of the BG Group ONGC Reliance 5%
Pann/Mukta field, Essar, GAIL and Cairn. GAIL 2%
Cairn Energy 1%
Gujarat State 1%
33
Asia-Pacific Spends & Trends 2008-2017
5,000
4,000
3,000
2,000
1,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
34
Asia-Pacific Spends & Trends 2008-2017
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Total capital investment in India’s offshore INDIA CAPEX FORECAST BY WATER DEPTH 2013-2017
market is expected to amount to an estimated
US$18.8bn over the 2013 to 2017 forecast
timeframe, of which 61% will be directed towards
shallow water projects, 20% towards deepwater
projects and 19% towards ultra-deepwater Shallow 61%
projects. Many of the future field development Deepwater 20%
scenarios for deepwater projects in India involve Ultra-Deep Water 19%
35
Asia-Pacific Spends & Trends 2008-2017
Dhirubhai 34 Reliance Reliance Petroleum Limited 2007 2016 2,010 Probable 233 No 1,374
(D6-R Series) Petroleum (60%), BP India Ltd (30%), platforms
(KG-DWN-98/3) Limited Niko Resources Ltd (10%) on field
Dhirubhai 39 & Reliance Reliance Petroleum Limited 2009 2017 1,600 Possible 71 Piled 1,265
41 (Block D3) Petroleum (60%), BP India Ltd (30%),
(KG- Limited Hardy Exploration &
DWN-2003/1) Production (India) Ltd (10%)
Mukta (PMT) BG/ONGC/ Oil & Natural Gas Corporation 1981 1998 80 Producing 188 Piled, Ship- 689
(Mumbai B-19 & Reliance (ONGC) (40%), BG International Shaped
B-57) Consortium Ltd (India) (30%), Reliance
Petroleum Limited (30%)
Dhirubhai Reliance Reliance Petroleum Limited 2005 2016 1,400 Probable 56 Ship- 592
(D6-G1) Petroleum (60%), BP India Ltd (30%), Shaped
(KG-DWN-98/3) Limited Niko Resources Ltd (10%)
Annapurna Oil & Oil & Natural Gas Corporation 2001 2016 1,030 Probable 106 Piled 551
(KG-DWN-98/2 Natural Gas (ONGC) (90%), Cairn Energy
R-Cluster) Corporation India Pty Ltd (10%)
(ONGC)
Dhirubhai 1 Reliance Reliance Petroleum Limited 2002 2009 900 Producing 564 Jack-Up, 521
(D6-A) Petroleum (60%), BP India Ltd (30%), Piled
(KG-DWN-98/3) Limited Niko Resources Ltd (10%)
P Field Oil & Oil & Natural Gas Corporation 2001 2018 493 Possible 101 Ship- 518
(KG-DWN-98/2) Natural Gas (ONGC) (90%), Cairn Energy Shaped
(Kanaka Durga) Corporation India Pty Ltd (10%)
(ONGC)
India NEC-25-A1 Reliance Reliance Petroleum Limited 2004 2016 74 Probable 182 Jack-Up, 517
(NEC-OSN-97/2) Petroleum (60%), BP India Ltd (30%), Piled
(Dhirubhai 9-11) Limited Niko Resources Ltd (10%)
Vashishta VA-1 Oil & Oil & Natural Gas Corporation 2005 2014 553 Firm Plan 71 No 516
(KG-OS-DW-IV) Natural Gas (ONGC) (100%) platforms
Corporation on field
(ONGC)
Krishna- Oil & Oil & Natural Gas Corporation 2000 2015 844 Possible 176 No 486
Godavari KD-1-1 Natural Gas (ONGC) (100%) platforms
Corporation on field
(ONGC)
36
Asia-Pacific Spends & Trends 2008-2017
China
Country Profile
Business & Macroeconomic Environment
China’s economy continues to outperform both regionally and globally,
with the IMF forecasting real GDP growth of 8.2% in 2013. The majority of this 8.2% GDP growth
growth continues to be manufacturing-led but strong retail sales figures also in 2013
suggest that policymakers are making headway in their efforts to rebalance
the economy by boosting domestic consumption. While this is a robust growth outlook, the overleveraging
of local government financing vehicles, in particular real estate lenders, is a major macroeconomic
concern. In addition, infl ation risks may recur if food and oil prices rise once more, limiting Beijing’s
ability to loosen monetary policy. Either could prompt a ‘hard landing’ that would be extremely
damaging for both the domestic and global economy.
At a microeconomic level, China remained 91st out of 185 countries, against a regional average of 86.
China’s main strengths remain enforcing contracts (19) and registering property (44) but it scores poorly
for starting a business (151) and dealing with construction permits (181).
37
Asia-Pacific Spends & Trends 2008-2017
Key Fields
As of 2012, the Chinese offshore industry comprises of 114 currently producing fields and 83 discovered
but undeveloped prospects. All currently producing assets in China are considered to be shallow water.
However, the deepwater market is expected to grow in China as four undeveloped fields are located in
water depths of over 500m (Lingshui, Liuhua LH 34-2-1, Liwan and Liuhua LH 29-1).
Bohai Bay
The Bohai Bay region is China’s largest offshore oil and gas production hub and one of China’s major
oil-producing regions. Bohai Bay is located off the coast of north-east China approximately 200km east
of Beijing. CNOOC is the foremost operator in the area. Other operators in the region include the Chinese
firms Petrochina and Sinopec, as well as foreign operators such as Anadarko, ConocoPhillips and EDC.
According to CNOOC, net proven reserves of oil and gas in the Bohai Bay region amounted to 1.1bn barrels
of oil equivalent (“boe”) in 2011, accounting for 37.7% of the company’s total reserves. CNOOC also stated
that the Bohai Bay fields were producing 426,190 bpd, or 50% of the company’s 2011 production. Bohai Bay’s
dominance of China’s offshore oil and gas scene is reflected in the fact that about half of China’s offshore
fields are located in this region: which includes the Peng Lai 19-3 field – China’s largest offshore discovery
– which produces around 60,000 bpd.
Liwan
The Liwan offshore gas field, located in Chinese territorial waters in the South China Sea, lies at a water
depth of 1,480m. This project constitutes a major offshore deepwater natural gas development for both
China and the Asian region as a whole. The field, operated by Canadian Independent Husky Oil – in a 49:51
partnership with CNOOC – is expected to come on-stream in 2013. Once on-stream, Liwan will be China’s
largest producing offshore gas field. The significance of Liwan is that its development as a deepwater
project forms part of China’s strategy to diversify its sources of natural gas supply; which also includes
the construction of international overland pipelines, developing LNG import capacity, and boosting
onshore production.
China Capex
The main driver of Chinese Capex over the next five years will be shallow water
developments in established basins such as Bohai Bay. However, the strongest Investment
growth will come from new deepwater projects in the South China Sea such in China
as the Lingshui, Liuhua LH 34-2-1, Liwan and Liuhua LH 29-1 fields mentioned
represents
above. These will drive total offshore Capex in the country to US$16.4bn over
11% of the total
the next five years, up from US$15.6bn in the 2008-2012 period. This spending
represents the fourth largest share of regional Capex at 11%.
for Asia Pacific
38
Asia-Pacific Spends & Trends 2008-2017
CNOOC
CNOOC ConocoPhillips Husky Eni Chevron
Sinopec CITIC CPC Other
Over the 2008 to 2017 period, a number of CHINA CAPEX FORECAST BY OPERATOR 2013-2017
changes regarding Capex by operator are
expected. Historically, CNOOC has been
dominant and the minor players have included CNOOC 44%
CPC, CITIC Resources and Sinopec. However, Other 33%
looking forward, BG Group and Husky are Conoco Phillips 7%
expected to become more dominant as these Husky 7%
CNOOC Eni Chevron 3%
two players develop the Lingshui and the
Sinopec 3%
Liuhua and Liwan projects respectively. CPC 3%
39
Asia-Pacific Spends & Trends 2008-2017
5,000
4,000
3,000
2,000
1,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
40
Asia-Pacific Spends & Trends 2008-2017
1,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Shallow Deepwater
As shown to the right, total investment in China’s CHINA CAPEX FORECAST BY WATER DEPTH
2013-2017
offshore O&G industry is expected to be focused
in the country’s shallow water – commanding a
91% share of total Capex outlay. In contrast to
Australia and Southeast Asia, China is unlikely
to witness any significant growth in deepwater
activity over the forecast period. Shallow 91%
Deepwater 9%
41
Asia-Pacific Spends & Trends 2008-2017
Liwan LW 03-1-1 Husky Oil China China National Offshore Oil 2006 2013 1,480 Under 912 Piled 649
(Block 29/26) Ltd Corp (CNOOC Ltd) (51%), Development
Husky Oil China Ltd (49%)
Peng Lai 09-1 ConocoPhillips China National Offshore Oil 2000 2014 25 Firm Plan 150 Piled 545
China (COPC) Corp (CNOOC Ltd) (51%),
ConocoPhillips China (COPC)
(49%)
F Field Chinese Chinese Petroleum 1971 2015 120 Firm Plan 53 Piled 535
(CFC Taiwan Petroleum Corporation (CPC) (100%)
South West) Corporation
(CPC)
Wenchang 09-1 China National China National Offshore Oil 1991 2016 100 Possible 56 Piled, 485
Offshore Oil Corp (CNOOC Ltd) (50%), Ship-
Corp BP China E&P Company (50%), Shaped
(CNOOC Ltd)
Enping 24-2 China National China National Offshore Oil 2010 2014 90 Firm Plan 190 Piled, 428
Offshore Oil Corp (CNOOC Ltd) (100%) Ship-
Corp (CNOOC Shaped
Ltd)
Liuhua 16-2 China National China National Offshore Oil 2010 2016 400 Probable 54 Ship- 400
Offshore Oil Corp (CNOOC Ltd) (100%) Shaped
Corp
(CNOOC Ltd)
Suizhong 36-1 CNOOC Bohai China National Offshore Oil 1986 1993 26 Producing 450 Piled, 398
Corporation Corp (CNOOC Ltd) (100%) Ship-
Shaped
Peng Lai 19-3 ConocoPhillips China National Offshore Oil 1999 2008 28 Producing 618 Piled, 395
(Main Phase) China (COPC) Corp (CNOOC Ltd) (51%), Ship-
ConocoPhillips China (COPC) Shaped
(49%)
Dongfang 13-1 CNOOC China National Offshore Oil 2010 2016 65 Probable 55 Piled 342
Nanhai West Corp (CNOOC Ltd) (100%)
Corporation
Cheng Dao Sinopec Corp Sinopec Corp (100%) 2008 2011 10 Producing 300 Piled 312
(Phase 2)
42
Asia-Pacific Spends & Trends 2008-2017
Brunei
Approximately 90% of Brunei’s GDP is based on its O&G industry. As a result,
economic growth is highly dependent on oil and gas prices. With Brent crude 1.5% GDP
averaging a record high of US$111 per barrel in 2011, it is perhaps unsurprising growth in 2013
that growth was an impressive 2.2% according to the IMF. With prices remaining
high in 2012, growth is projected to come in at a strong 2.7%. Growth for 2013 is estimated at 1.5%.
Brunei is a relatively stable country with the fifth highest per capita GDP in the world. It operates under
nominal martial law but is relatively friendly towards foreign investment and is perceived to be one of the
less corrupt countries in the region. Recent reforms that have made it easier for companies to procure
electricity have also boosted the aggregate score for ease of doing business in Brunei. It now ranks
79th in the 2013 World Bank Doing Business Report.
Myanmar
Myanmar operates under military leadership but is showing signs of
implementing a gradual liberalisation of its political process and economy. 6.3% GDP
If these reforms are implemented and international sanctions dropped, then growth in 2013
Myanmar could draw more foreign direct investment (“FDI”) in key industries
such as oil and gas, low-cost manufacturing, and agriculture.
21
Indonesia, Malaysia, Philippines, Thailand and Vietnam
22
With the exception of Thailand which was hit by catastrophic flooding in 2011
23
See IMF report, World Economic Outlook, October 2012.
24
This figure is skewed by a very slow score for Thailand in 2011.
25
IMF report, World Economic Outlook, October 2012.
43
Asia-Pacific Spends & Trends 2008-2017
While the promise of reform is encouraging, for now the economy remains dominated by the military with
trade ties largely restricted to regional partners such as India and China. Indeed, India has been one of
the primary investors in the country’s critical oil and gas industry and has long been the largest export
market for Myanmar26.
Despite its international isolation, high oil prices are likely to support strong real GDP growth in the
medium term with the IMF projecting expansion of 6.2% in 2012 and 6.3% in 2013.
Malaysia
With an estimated 5.9 billion barrels of proven oil reserves and 2.4Tcm of proven natural gas reserves,
Malaysia is South East Asia’s primary source of hydrocarbons. Indeed, in 2011, Malaysia’s oil production
stood at 573,000 bpd whilst natural gas production amounted to 61.8Bcm. These production figures make
Malaysia the second most productive combined oil and gas producer in Southeast Asia, behind Indonesia,
and Asia-Pacific’s fourth largest oil producer and number three natural gas producer.
However, oil production slumped in 2011 by 10% on 2010 figures, pushing the country to become a net
oil importer. Indeed, in 2011, daily oil consumption averaged 573,000 bpd resulting in an output gap of
35,000 bpd. In terms of gas, Malaysia was Southeast Asia’s second largest producer and the world’s
third largest exporter of LNG, behind only Qatar and Indonesia.
Vietnam
Vietnam became a net oil importer in 2011 as consumption (358 thousand bpd) outstripped production
(328 thousand bpd). The country holds 4.4bn bbls of oil in proved reserves however, ranking it above
Indonesia in the region. The country also holds significant proved natural gas resources which totalled
0.6Tcm in 2011. While these reserves are substantial, they remain yet to be fully exploited and currently
the country’s supply and demand situation is at equilibrium.
Brunei
Brunei’s oil production has trended downwards over the past decade with 2011 production totalling 166,000
bpd. Proved oil reserves have remained static over the past decade however, totalling 1.1bn barrels in 2011.
The picture for gas is more positive, with the Kingdom steadily increasing natural gas output to a new
high of 12.8Bcm in 2011.
26
http://www.atimes.com/reports/CB21Ai01.html#top5
44
Asia-Pacific Spends & Trends 2008-2017
Brunei’s position in the South China Sea has meant potential offshore reserves are contested by
China and others. Whilst it does not claim sovereignty over the Spratly or Paracel islands, Brunei’s
200 nautical mile exclusive economic zone overlaps with those claimed by Vietnam, the Philippines,
Malaysia and China.
Myanmar
Relatively speaking, Myanmar has very little in the way of oil reserves. However, the country’s economy
is opening up and the nation holds natural gas reserves of 0.2Tcm. Myanmar produced 12.4Bcm of
natural gas in 2011, up from the 2001 total of 7Bcm.
Key Fields
Indonesia
As of 2012, Indonesia’s offshore industry comprises 216 currently producing fields and a further
113 discovered but undeveloped prospects.
Vorwata
Among the most important developments in recent years is the giant 2.2 billion boe Vorwata field that
feeds the BP-operated two train 7.6 million tpy Tangguh LNG project in Bintuni Bay, West Papua.
On-stream since 2009, the facility utilises two fixed production platforms which send gas onshore to
be processed and liquefied. Plans to expand the project by an additional 3.8 million tpy LNG train were
submitted to BP Migas in September 2012 and have now been approved by the regulator. A final investment
decision on the US$12bn project is expected in 2014.
West Seno
West Seno is Indonesia’s first deepwater development, lying in 953m of water in the Makassar Strait PSC
offshore Kalimantan. It contains 476 million boe of oil and gas reserves and has been producing since
2003. West Seno has been developed using two tension leg platforms (TLP) and a floating production
unit. Further fields in the region, such as the 70 million boe Bangka, could be tied back to West Seno
infrastructure in due course. A final investment decision is due in 2013, according to former upstream
regulator BP Migas.
Malaysia
As of 2012, the Malaysian offshore industry comprises of 110 currently producing fields and 158 discovered
but undeveloped prospects. Of those fields currently in production all but two (Kikeh and Kikeh Kecil) are
located in shallow water with the primary development scenario consisting of traditional fixed platform
structures. However, following the country’s increasing emphasis on deepwater exploration, Malaysia
plays host to 17 undeveloped fields located in water depths of over 500m. Continued exploration activity in
Malaysia’s promising deepwater plays is expected to lead to the discovery of further deepwater prospects
over the coming years.
45
Asia-Pacific Spends & Trends 2008-2017
Gumusut
Malaysia’s Gumusut/Kakap fields were discovered by Murphy Oil at water depth of 1,000m during an
exploration drilling programme in 2004. The field is currently under development and is expected to begin
production in 2013. Reserves are estimated up to 1,000Bcf for gas and 400 million barrels of crude oil,
while the life of the field is estimated to be 20 years. The development is led by a consortium consisting
of Petronas (20%), Shell (33%), ConocoPhillips (33%) and Murphy (14%). At a depth of 1,000 metres,
this field is indicative of Malaysia’s efforts to develop its hydrocarbons reserves in deeper water to
compensate for declining production in its shallow water plays. A maximum production capacity of
150,000boe/d is expected from the project.
Kikeh
The Kikeh oil field is currently Malaysia’s only producing deepwater oil field, located offshore Sabah in
1,300m of water. The field, operated by Murphy Oil in partnership with Petronas, came on-stream in 2007
with estimated reserves in the region of 400-700Mboe. Production in 2011 was estimated at 52,000 bpd
of oil, 16,000 bpd lower than that recorded in 2010.
Myanmar
As of 2012, the Myanmar offshore industry comprises of three currently producing fields and 14
discovered but undeveloped prospects. Currently all but one of the offshore fields in Myanmar are located
in shallow water. The exception is the Mya South (Block A-3) field which is owned by Daewoo International
Ltd and is expected on-stream towards the end of the forecast period.
Shwe
The Shwe field was discovered in the Bay of Bengal in 2004, by Daewoo International. Stakeholders
include Daewoo International Ltd of South Korea (51%), Korea Gas Corporation (KOGAS), ONGC Videsh
Ltd of India, and GAIL Ltd of India, in a joint venture with the Myanmar Oil and Gas Enterprise (MOGE).
According to the development plan, Shwe’s produced gas will be transported through a 2,800km pipeline
to China. A parallel oil pipeline costing US$1.5bn will also be constructed alongside the gas pipeline
capable of transporting 88 million barrels of crude oil per year, the purpose of which is to open up an
alternative import route for China rather than have tankers traverse the narrow, congested Straits of
Malacca. The development is expected to come on-stream in the near term, with three fields expected
to begin production over the period 2013-2015.
46
Asia-Pacific Spends & Trends 2008-2017
Over the period running from 2013 to 2017, SOUTH EAST ASIA CAPEX FORECAST BY OPERATOR
Petronas (12%), Chevron (10%), PTT (6%), 2013-2017
Shell (8%), Murphy (6%), Shell Brunei
Government (3%) and PetroVietnam (3%)
Other 53%
are expected to account for over under Petronas 12%
of capital expenditure in the region. Chevron 10%
Shell 8%
Murbhy 6%
PTT 6%
Shell Brunei
Government 3%
PetroVietnam 2%
47
Asia-Pacific Spends & Trends 2008-2017
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Procurement And Construction Detailed Engineering
48
Asia-Pacific Spends & Trends 2008-2017
2,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Shallow water projects are forecast to account for SOUTH EAST ASIA CAPEX FORECAST BY WATER
81% of total project Capex over the period between DEPTH 2013-2017
2013 and 2017. The remaining spend is expected to
be directed towards the deep (17%) and ultra-deep
(2%) water segments. Much like the Australian
market, the shallow water market is expected
Shallow 81%
to level out from 2013 onwards. Therefore,
Deepwater 17%
deepwater activity is expected to provide the
Ultra-Deep Water 2%
growth over the next five years.
49
Asia-Pacific Spends & Trends 2008-2017
Abadi Inpex Inpex (60%), Shell Indonesia 2000 2018 457 Firm Plan 1,239 Ship- 1,643
(Masela PSC) (Indonesia B.V. (30%),EMP Energi Shaped
Petroleum Indonesia Ltd (10%)
Exploration
Ltd)
Rotan (SB-H) Murphy Sabah Murphy Sabah Oil Company Ltd 2007 2018 1,140 Firm Plan 141 Ship- 1,427
Oil Company (80%), Petronas Carigali Sdn Shaped,
Ltd Bhd (20%) TLP
Arthit PTT PTT Exploration & Production 1999 2008 70 Producing 1,103 Piled, 1,175
(Block B15A & Exploration (PTTEP) (80%), Chevron Ship-
B16A) & Production Thailand Exploration & Shaped
(PTTEP) Production (16%), Moeco Thai
Oil Development Limited (4%),
Geronggong Brunei Shell Brunei Shell Petroleum Co Sdn 2011 2017 1,000 Probable 118 Ship- 1,173
Petroleum Co Bhd (50%), PetroleumBrunei Shaped
Sdn Bhd (50%)
Su Tu Trang Cuu Long Joint PetroVietnam Exploration & 2003 2015 56 Under 634 Piled, 1,122
(White Lion) Operating Production Co (50%), Development Ship-
(Block 15-1) Company Perenco Vietnam Ltd (23.3%), Shaped
KNOC Vietnam (14.3%),
SK Energy Co Ltd (9%),
Geopetrol Vietnam SA (3.5%),
Gendalo Chevron Chevron Indonesia Company 1999 2016 1,425 Firm Plan 377 Ship- 1,120
Indonesia (55.%), Eni Indonesia Company Shaped
Company Ltd (20%), Sinopec Corp (18%),
Pertamina Hulu Energi (6.9%)
Gumusut-Kakap Sabah Shell Sabah Shell Petroleum Co Ltd 2004 2013 1,000 Under 576 Semi-Sub 1,099
(SB-J & SB-K) Petroleum (33%), ConocoPhillips Malaysia Development
Co Ltd Inc (33%), Petronas Carigali
Sdn Bhd (20%), Murphy Sabah
Oil Company Ltd (14%)
Zawtika/Zatila PTT PTT Exploration & Production 2006 2013 100 Under 539 Piled, 1,036
(M-9) Exploration (PTTEP) (85%), Myanmar Oil & Development Ship-
& Production Gas Enterprise (MOGE) (15%) Shaped
(PTTEP)
Gehem Chevron Chevron Indonesia Company 2003 2017 1,823 Firm Plan 279 Ship- 1,013
Indonesia (55.1%), Eni Indonesia Shaped
Company Company Ltd (20%), Sinopec
Corp (18%), Pertamina Hulu
Energi (6.9%)
Kasawari Petronas Petronas Carigali Sdn Bhd 2012 2015 100 Probable 543 Piled 939
(SK-316) Carigali Sdn (50%), Sarawak Shell Berhad
Bhd (50%)
50
Asia-Pacific Spends & Trends 2008-2017
ASIA-PACIFIC TOP 10
PROJECTS BY CAPEX 2013-2017
Field Country Operator Field Holdings Discovery On- Water Status Total Platforms Total
Name Year Stream Depth Reserves Capex
Year (metres) MMBBLE (US$m)
Ichthys Australia Inpex Browse Inpex Browse Pty Ltd (66.1%), 2000 2019 230 Under 2,784 Semi-Sub, 7,229
(WA-285-P Pty Ltd Total Exploration Australia SA Development Ship-
Browse) (Ex (30%), Tokyo Gas Co (1.6%), Shaped
Brewster) Osaka Gas Company (1.2%),
Chubu Electric Power
Company (0.7%), Toho Gas
Company (0.4%)
Poseidon/ Australia ConocoPhillips ConocoPhillips Australia 2009 2019 300 Possible 1,354 Piled, 4,220
Kronos Australia Exploration Co (51%), Semi-Sub,
(WA-315-P & Exploration Co Karoon Gas Australia Ltd Ship-
WA-398-P) (49%) Shaped
Calliance Australia Woodside Woodside Energy Ltd (50%), 2000 2016 420 Firm Plan 1,056 Piled, 3,053
(Ex Energy Ltd BP Developments Australia TLP
Brecknock Pty
Sth) Ltd (16.7%), Chevron Australia
(WA-31-R Pty Ltd (16.7%), BHP Billiton
Browse) Petroleum Pty Ltd (8.3%),
Shell Development (Australia)
Pty Ltd (8.3%)
Briseis Australia Hess Hess Exploration (Carnarvon) 2008 2019 1,118 Probable 149 Semi-Sub, 2,193
(WA-390-P) Exploration Pty Ltd (100%) Ship-
(Equus (Carnarvon) Shaped
Project) Pty Ltd
Wheatstone Australia Chevron Chevron Australia Pty Ltd 2004 2016 216 Under 617 Gravity 1,971
(WA-17-R & Australia Pty (80.2%), PE Wheatstone Pty Development
WA-253-P) Ltd Ltd (10%), Shell Development
(Australia) Pty Ltd (8%),
Kyushu Electricity Company
(1.8%)
Scarborough Australia Esso Australia Esso Australia Resources Ltd 1979 2018 912 Probable 1,322 Semi-Sub 1,962
(WA-1-R) Resources Ltd (50%), BHP Billiton Petroleum
Pty Ltd (50%)
Prelude Australia Shell Shell Development (Australia) 2007 2017 200 Under 649 Ship- 1,923
(WA-371-P) Development Pty Ltd (67.5%), Inpex Browse Development Shaped
(Australia) Pty Ltd (17.5%), Korea Gas
Pty Ltd Corporation (10%), Chinese
Petroleum Corporation (CPC)
(5%)
Sunrise Australia Woodside Woodside Energy Ltd (33.4%), 1974 2019 180 Possible 611 Piled, 1,857
(Greater Energy Ltd ConocoPhillips Australia Ship-
Sunrise Exploration Co (30%), Shaped
NAGV) Shell Development (Australia)
Pty Ltd (26.6%), Osaka Gas
Company (10%)
Abadi Indonesia Inpex Inpex (Indonesia Petroleum 2000 2018 457 Firm Plan 1,239 Ship- 1,643
(Masela (Indonesia Exploration Ltd) (60%), Shaped
PSC) Petroleum Shell Indonesia B.V. (30%),
Exploration EMP Energi Indonesia Ltd
Ltd) (10%)
Cash/Maple Australia PTTEP PTTEP Australasia Pte Ltd 1989 2018 125 Probable 119 Ship- 1,477
(AC/RL7) Australasia (100%) Shaped
Pte Ltd
51
Asia-Pacific Spends & Trends 2008-2017
ASIA-PACIFIC
OPEX FORECASTS 2008-2017
This section provides operational expenditure (“Opex”) forecasts for the region. Opex refers to the
costs of maintaining and operating offshore infrastructure.
30,000
25,000 Australia
Malaysia
20,000 China (PRC)
Indonesia
15,000 India
Thailand
10,000 Vietnam
Other (Ex-Top 7)
5,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
The high investment in Australia is due to the large operating costs that will start during the forecast
period, once the gas fields and LNG trains are on-stream. Malaysia is also expected to grow strongly
from US$2.8bn to US$7bn, whilst China and Indonesia follow suit from US$1.7bn and US$1.8bn to
US$4.5bn and US$4.2bn
respectively. Malaysian ASIA-PACIFIC OPEX BY COUNTRY 2008-2012
Opex by Country
and Indonesian Opex
2008-2012 (US$m):
growth is likely to be the
Australia 19% Australia 15,592
driven by the deployment
Malaysia 19% Malaysia 15,543
of enhanced oil recovery
China (PRC) 14% China (PRC) 11,018
techniques. Indonesia 14% Indonesia 10,899
India 12% India 9,459
Thailand 10% Thailand 7,740
Others 7%
Vietnam 3,876
Vietnam 5%
Others 5,813
52
Asia-Pacific Spends & Trends 2008-2017
53
Asia-Pacific Spends & Trends 2008-2017
Oil companies included in the ‘Others’ segment in ASIA-PACIFIC OPEX FORECAST BY OPERATOR
the opposite figure include Sinopec, MEO, Talisman, 2013-2017
BP, Nippon Mitsubishi, Cairn and many more.
There is expected to be a total of 121 operators
Other (Ex-Top 7) 47%
involved in offshore exploration and development
CNOOC 10%
in the Asia-Pacific region over the forecast period. Woodside 9%
Shell 8%
ONGC 7%
Chevron 7%
ExxonMobil 6%
Petronas 6%
54
Asia-Pacific Spends & Trends 2008-2017
The growing number of operational floating ASIA-PACIFIC OPEX FORECAST BY WATER DEPTH
platforms across Asia-Pacific will lead to 2013-2017
increased deepwater Opex. Indeed, the number
of operational deepwater platforms is expected to
increase from just six in 2012 to 13 by 2017. These
platforms will have a host of associated pipelines,
control lines and subsea completions which Shallow 89%
Deepwater 10%
will increase Opex levels still further. A total
Ultra-Deep Water 1%
of 55 possible deepwater platform installations
are currently under consideration in the Asia-
Pacific region.
55
Asia-Pacific Spends & Trends 2008-2017
ASIA-PACIFIC
DECOMMISSIONING FORECAST
This section seeks to quantify the level of decommissioning activity expected
to take place across the Asia-Pacific region over the period until 2020.
The decommissioning market is an area of the industry which is highly uncertain. In a high oil price
environment, structures can often be legally maintained beyond their design life as mature fields remain
profitable. Furthermore, platforms can often remain in place as hosts for new subsea tiebacks.
As with many other offshore regions Asia-Pacific has seen limited platform removal activity historically,
but this is anticipated to change over the next decade. Many parts of the Asia-Pacific region are considered
mature, offering potential decommissioning opportunities. Within the wider Asia-Pacific region, Southeast
Asia is expected to host the greatest number of decommissioning opportunities over the next fi ve years.
Activity is predominantly expected to take place in Indonesia, Malaysia, Thailand and Australia.
There are three primary international conventions that apply to the removal of offshore installations,
they include: the 1958 Geneva Convention on the Continental Shelf (which states that any installations
which are abandoned or disused must be entirely removed), the 1972 London Dumping Convention and the
UN Law of Sea Convention. A set of non-binding guidelines (IMO Guidelines and Standards for the Removal
of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone)
were also drafted by the International Maritime Organization (“IMO”) in 1989.
In the Asia-Pacific region, the relevant trade body, the Association of Southeast Asian Nations’ Council
on Petroleum (“ASCOPE”), continues to press forward with guidelines for the decommissioning of oil
and gas facilities in the region, in order to provide technical references and establish a balance between
environmental protection, cost and safety, and with the aim to mutually approve and tailor guidelines
for the region’s NOC members.
The following forecasts, which are based on expected field depletion dates, therefore provide an indication
of platform decommissioning demand based on current reserves and production dynamics and not on
platform design-life estimates.
56
Asia-Pacific Spends & Trends 2008-2017
120
100 Indonesia
Malaysia
Platforms
80 Thailand
Australia
60 China (PRC)
Brunei
40
India
Other (Ex-Top 7)
20
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Compared to the more mature basins globally, such as the Gulf of Mexico and the North Sea, the Asia-
Pacific O&G industry continues to grow and is not generally considered to be mature. That said, some
corners of the industry are mature (shallow water Indonesia, Malaysia and Thailand), and it is in these
basins that an increase
in decommissioning ASIA-PACIFIC PLATFORM DECOMMISSIONING
demand is expected over FORECAST BY COUNTRY 2013-2020 Platform removals
the forecast period as a by country:
number platforms reach 2013-2020
the end of their 25 year Indonesia 47% Indonesia 269
design-life. Indeed, some Malaysia 17% Malaysia 98
structures have been Thailand 13% Thailand 73
Australia 7% Australia 40
installed for 50 years
Brunei 6% Brunei 35
already, and are likely to China (PRC) 4% China 24
be decommissioned over India 3% India 13
the next five to ten years. Others 3% Others 17
57
Asia-Pacific Spends & Trends 2008-2017
120
100 Piled
FPSO
80 FSO
Caisson
60 Jack-Up
FPS
40
FSU
Others (Ex-Top 7)
20
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
58
Asia-Pacific Spends & Trends 2008-2017
120
100 Petramina
Chevron
80 Petronas
CNOOC
60 Total
Shell Brunei Government
40
Shell
Others (Ex-Top 7)
20
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
59
Asia-Pacific Spends & Trends 2008-2017
60
40
20
Shallow
Deepwater
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
60
Asia-Pacific Spends & Trends 2008-2017
61
Asia-Pacific Spends & Trends 2008-2017
GLOSSARY
Construction Indicates the construction material of the jacket/hull of platform. Options include:
Material: Steel
Steel/Concrete – Steel jacket on a concrete base or a platform of mixed construction
Concrete
Gravel – Artificial gravel islands, such as in the Arctic
Aluminium
Forecast Period: 2013-2017 for Capex and Opex, 2013-2020 for decommissioning
Jacket Weight (t): For fixed platforms this is the weight of the jacket, excluding the piles. For a ship-shaped
facility, this is the weight of the hull.
Phased Cost: Dispersed cost of a project over the timeframe in which the project will be executed.
Status: Operational: Platform is operating in its designed function.
Installed: Platform is on site but not yet functioning.
Under Construction: Platform is under construction but not yet in place.
Under Conversion: Platform is currently being converted from a previous function.
Firm Plan: Facility is part of a development concept for a field where the development plan
(PDO) has been submitted to the relevant authority.
Probable: Facility is part of a favoured development concept for a field at development
planning stage at company level.
Possible: Unit is part of favoured development concept for field at very early stage of
evaluation.
Topside Weight (t): The weight of the platform topsides, including the decks, modules (e.g. drilling rigs if
applicable). Please note that this is the dry weight as built. It does not include the weight of
oil, drilling fluids, etc. It is not the operational topside weight, which for a large platform may
be several thousand tonnes of additional weight.
ABBREVIATIONS
APAC Asia-Pacific IMF International Monetary Fund
bbl Barrel IOC International Oil Company
Bcf Billion cubic feet LNG Liquefied natural gas
Bcm Billion cubic metres Ltrs Litres
Boe Barrels of oil equivalent m Metres
B/bn Billion (e.g. US$1bn, Bcf) Mcf Million cubic feet
bpd Barrels per day MMBLE Million barrels of oil equivalent
BRIC Brazil, Russia, India and China MODU Mobile offshore drilling unit
CAGR Compound annual growth rate MOPU Mobile offshore production unit
CAPEX Capital Expenditure Mtoe Million tonnes of oil equivalent
cf Cubic Feet Mtpa Mega tonnes per annum
CNOOC China National Offshore Oil Company NOC National Oil Company
CPC Chinese Petroleum Corporation OECD Organisation for Economic Co-operation and Development
/d Per day O&G Oil and Gas
E&A Exploration and appraisal ONGC Oil and Natural Gas Corporation – Indian NOC
E&P Exploration and production OPEC Organization of the Petroleum Exporting Countries
EIA Energy Information Administration OPEX Operational expenditure
EPCI Engineering, Procurement, Construction & Installation PTT Thai NOC
FDI Foreign direct investment SPM Single point mooring
FID Final investment decision SURF Subsea, Umbilicals, Risers and Flowlines
FLNG Floating liquefied natural gas Tcf Trillion cubic feet
FPSO Floating production, storage and offloading Toe Tonnes of oil equivalent
GDP Gross domestic product tpy Trillion tonnes per year (LNG)
IEA International Energy Agency
62
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