Golak Patnaik, Principal Analyst, Asia Pacific Upstream Research, Wood Mackenzie, looks back at 2024’s upstream highlights for the Asia Pacific region, revealing the distinct dynamics at play in its varied oil and gas markets.
Asia Pacific remains a diverse hub for upstream oil and gas activities, characterised by varied exploration and development projects, strategic mergers and acquisitions (M&A), and evolving licensing rounds.
This article provides a comprehensive overview of upstream oil and gas activities in the region so far this year, focusing on four key parameters – exploration, field development, M&A and licensing rounds – across Southeast Asia, Australasia and the Indian subcontinent.
Southeast Asia: balancing exploration and development
In Southeast Asia, 2023 was a standout year, with material discoveries in Malaysia and Indonesia reinvigorating interest in key basins. With some of the largest finds of the year, it signalled that the region was not as mature as many thought, and there was still considerable upside left to find.
Although 2024 has not been quite as blockbuster by comparison, it has still revealed new finds across the region. In Indonesia, exploration primarily focused on the North Sumatra, South Sumatra, East Java, Tomori, and Salawati basins. The biggest find of the year to date has been Mubadala-operated Tangkulo gas discovery in the emerging deepwater North Sumatra play. Next up is the key appraisal of the giant Layaran find from 2023. Exploration drilling in Malaysia’s Sarawak, Sabah and Malay basins resulted in a number of discoveries, but unlike last year, where most of the finds were in Sarawak, this year all the finds – most notably the Bunga Aster and Bekok Deep fields – have been made in the mature Malay basin.
In Vietnam, Eni’s long awaited Sao Truc wildcat in the frontier Phu Kanh basin was unsuccessful. However, Murphy Oil has plans to drill two wells in the Cuu Long basin near its under-development Lac Da Vang oil field, which could add commercial volumes for tie-in.
Also oil-focused was Valeura Energy’s drilling in Thailand’s Pattani basin, resulting in the small Nong Yao D and Wassana North discoveries. Recent exploration successes have generated interest from exploration and production operators, and governments and regulators are keen to capitalise on this with new licensing rounds. To this end, Malaysia has offered five exploration blocks in the frontier areas of Langkasuka and Eastern Sabah. The country is also offering discovered resources opportunities.
Production began on several key Malaysian gas projects, including TotalEnergies’ Jerun, PETRONAS Carigali-operated Kasawari and the Hess-operated Bunga Teratai. Development activities in Indonesia include the Jadestone-operated Akatara gas field and the Pertamina Hulu Energi-operated Titi oilfield, both of which were brought onstream. Genting has begun construction on the 1.2 million tpy FLNG facility that will receive its gas supply from the Kasuri PSC, which includes three gas fields: Asap, Kido, and Merah (AKM).
On a far bigger and more consequential scale, Eni had its plan of development for four deepwater gas fields in the Kutei basin approved by the authorities. This includes the multi-trillion f3, Geng North field, which was only discovered in September 2023. Eni is aiming to set new speed records for the development of deepwater gas both in Indonesia and further afield.
After a wait of over a decade, state NOC PetroVietnam and its partners sanctioned the development of US$3.2 billion ‘Block B’ gas project in Vietnam’s Malay basin. Valeura started production at the Nong Yao C field in Thailand’s Pattani basin. M&A activities in Southeast Asia generated over US$1.6 billion of deal-spend in 1H24, with the most notable deals being TotalEnergies’ acquisition of SapuraOMV’s assets in Malaysia and then divesting its interests in Brunei to Hibiscus. The transactions align with TotalEnergies strategy to monetise mature assets and focus on gas production growth from low-cost and low emission assets.
Australasia: energy security and sustainability
Exploration drilling has been subdued across the region in recent years, in part due to strict environment and emission guidelines, and this is reflected in rather low-key results in 2024. In Australia, key exploration wells like INPEX’s Basset Deep-1 in the Browse basin were dry, although there continued to be small gas discoveries made in the Perth basin, one of the areas of Western Australia that is still seeing regular drilling.
In New Zealand a new government is reversing the previous administration’s ban on offshore oil and gas exploration, in place since 2018. Falling gas production and reserves has led to severe gas shortages and a spike in energy prices, prompting the government’s decision to review energy policy and the role of gas in the energy mix.
Exploration activities in Papua New Guinea also began to gather momentum after a dormant period with the news that PETRONAS was acquiring a 50% interest in the TotalEnergies-operated deepwater exploration block PPL 576. The block holds the large Mailu prospect, which is planned to be drilled in 2025, the country’s first deepwater well. On the field development front, work continued on key large gas fields needed to backfill LNG projects, such as Santos’ Barossa field, due onstream in late-2025, and Woodside’s Scarborough, due onstream in 2026. On a smaller scale, Beach Energy fired-up its Enterprise gas and condensate field in the Otway basin, but unfortunately pressure levels were lower than expected and reserves on the field have been downgraded. Woodside also took the final investment decision (FID) for on its Lambert West field, a subsea gas development in the North Carnarvon basin.
Like its E&A drilling, Australia’s licensing activities have seen steep declines in recent years, with no awards in 2023 and limited interest in the 2022 licensing round. However, the government did award offshore exploration acreage to ExxonMobil and Beach Energy on the east coast and to Chevron, INPEX, Melbana and Woodside on the west coast. Additionally, 10 CCS exploration permits were put up on offer. On the M&A front, the market in Australia was more muted than a rather frenetic 2023, but investors’ appetite for quality Australian gas assets remains strong. Japan’s LNG giant JERA acquired a 15.1% interest in the Woodside-operated Scarborough field in February.
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