What does the future hold for the oil and gas industry in South East Asia?
The global economy may have been in the doldrums in the past few years, but the oil and gas industry in Southeast Asia has continued to perform well.
With businesses and consumers starting to grow in confidence, the demand for energy is expected to rise sharply in the coming years, putting even greater strain on exploration companies. It is vital that firms have access to an experienced pool of engineers to ensure demand is not outweighing supply.
What challenges lie ahead?
There has been a global surge in oil and gas exploration in recent years and many fields are now running dry. These need to be replaced, which will prove to be one of the biggest tests facing the industry. Success rates of exploration have also been in decline, so experienced engineers are required to reverse this trend.
Frost & Sullivan revealed that the cost of extracting hydrocarbons has risen considerably and sophisticated oilfield developments are draining budgets. While technology has been developed that allows companies to find new oil sources, this is also very expensive. These excessive costs are forcing investors to think twice before parting with their money, which is hindering progress.
Political tensions in nations that are renowned for their high oil output are complicating matters further. With certain countries refusing to trade with their rivals, exploration companies in Southeast Asia are under concerted pressure to deliver more barrels each day to make up for any shortfalls.
How important is Southeast Asia to the international oil and gas industry?
Frost & Sullivan has suggested that Southeast Asia is set to become a global oil and gas hotspot in the next five years. This, the consultancy said, is because the region boasts attractive hydrocarbon reserves, has the potential for sustainable economic growth and provides companies with a "robust business environment".
International companies have been desperate to increase their presence in Southeast Asia, particularly in Malaysia and Indonesia. In a recent interview with the Malaysian Reserve, Chief Executive Officer of Hwang Investment Management Teng Chee Wai explained that while the country's stock market is not expected to gain much ground before the end of 2013, the oil and gas sector will continue to perform strongly.
"The Malaysian market has done well when compared to other markets. I would say the performance is decent," he was quoted as saying.
There have been some significant developments in the country's oil and gas sector in recent months, including a huge public share offering by UMW Oil & Gas - a major Malaysian offshore and drilling services firm. Meanwhile, the Star reported that state-owned Petronas has identified 14 oilfields that it hopes have the capacity to produce between 750 million and one billion barrels of crude oil.
In June 2013, a report published by Petronas revealed that global oilfield yields had fallen by between eight and nine per cent. In Malaysia, this figure is between two and three per cent, which underlines why the country has such an important role to play in global oil production.
What role does Singapore have to play?
Although Malaysia is positioning itself as the oil and gas hub of Southeast Asia, this is a title that is usually associated with Singapore. According to Rigzone, Singapore's refining capacity increased by 11 per cent between 2007 and 2012, with the state producing nearly 1.4 million barrels of oil last year.
With Malaysia threatening to steal its limelight, the government of Singapore has sanctioned numerous projects to ensure it is capable of upping its output. A recently-built liquefied gas terminal is being expanded and an offshore hydrocarbons storage facility is also being worked on. Singapore was one of the world's top three oil traders before the economic downturn and production is expected to increase considerably in the coming years - which reiterates how important it is to the overall international market.
The future is undoubtedly bright for Southeast Asia's oil and gas industry and with so many ambitious plans in place, companies will be keen to hire skilled engineers as soon as possible. Many experts believe this region will be a world leader in the field by the end of the decade, although some sizeable obstacles will need to be overcome if Malaysia and Singapore are serious about increasing their rates of production.
Oil and gas professionals from across the globe should be fully aware that this is the place to be for lucrative contracts - at least for the the foreseeable future.