Righting the Ship in SE Asia
It’s been a few months since this viewpoint was published in E&P Magazine, but we felt it prudent to weigh in on the activity outlook for Indonesia and other countries in Southeast Asia. International operating companies are indeed moving out of Southeast Asia and regional operators are moving in. This mimics the current global trend for operators to focus more specifically on certain regions, specializing on the most promising areas where an operator has had past success.
While project development lifecycles worldwide have increased, we have seen that development projects in Indonesia historically take longer than other markets and often much longer than initially anticipated. Politics, and specifically elections, play a significant role in delaying these projects. Development of ExxonMobil’s estimated 450 million barrel Banyu Urip oil field in the Cepu block off Indonesia took 10-15 years longer than expected to achieve first oil. However, ExxonMobil now reports that production from the field delivers 25 percent of the national production.
The Abadi field in the Timor Sea was discovered in 2000, but it took until 2010 for authorities to approve development plans that included production from a floating LNG facility capable of processing 2.5 million tons annually. In 2015 INPEX submitted a revised plan for the offshore LNG with processing capacity of 7.5 million tons annually. In 2017 authorities requested INPEX submit a new development plan that included an onshore LNG facility, further delaying this development project.
Typical project length in the region from discovery to initial full field production can take between 7 and 10 years. Fast track developments can be accomplished in about 5 years, but these are few and far between (certainly not the norm).
EMA provides accurate and dependable quarterly reports for the Floating Production Sector.
Clients tell us that our reports are the best source for information about upcoming developments.
It’s been a few months since this viewpoint was published in E&P Magazine, but we felt it prudent to weigh in on the activity outlook for Indonesia and other countries in Southeast Asia.
