Enhancing your value chain
In each dynamic landscape, success is largely dependent on understanding the entities of change and the frameworks in which these entities operate. Such is the case with the oil and gas industry in the region. The industry has undergone substantial reform and accounting standards have improved in an attempt to stabilise and strengthen the markets following the Asian financial crisis. The resultant deregulation and privatisations have, in turn, created opportunities for foreign and domestic investments.
From an upstream viewpoint, energy security and price instability have been, and will increasingly continue to be, the most important energy issues faced by regional economies. They are looking at strategising energy security to counter short–term interruptions due to contingencies (e.g. accidents or acts of war) and ensure sustainable energy supply to fuel economic growth.
The trend of Asian majors gaining a stronger hold regionally, and globally, is being evidenced as they race to secure supply and replace declining reserves. There is also a move towards consortium investment which offers the possibility of sharing investment risks in an environment of capital constraints. The lack of major oil discoveries in the region, in recent years, has also increased the focus on gas portfolios.
On the downstream side, the privatisation of major refineries and deregulation of the industry, and the inadequacy of facilities enabling transportation of oil and gas within the region, and for export to elsewhere in the world, present investment opportunities.
Oil & Gas Sector Challenges (A Regional Perspective)