Asia's Oil, Gas Sector At Important Crossroads - Business Times (Malaysia), June 5
BY LOKMAN MANSOR
OIL producers and refiners are smiling, for now. Since late 1999, world crude prices have increased from the previous year's slump, and refiners are optimistic that their refining margins will improve.
The use of gas meanwhile, has been on an uptrend and is expected to grow further. Prospects for natural gas remains bright, particularly as an alternative to oil. Oil now accounts for 37 per cent of the total energy demand while natural gas, 12 per cent.
Many believe Asia will remain the engine of growth in the global economy, with its energy demand increasing by 6 per cent this year, mainly supported by robust expansion in export-oriented industries.
As a comparison, the world energy demand is expected to register a growth rate of 3.4 per cent per annum up to the year 2005.
According to industry forecasts, the uptrend in the region's energy demand is likely to continue for the next 10 years, at a 3.6 per cent growth per annum.
Despite its position as a major energy consumer, the Asia Pacific region itself has limited indigenous oil and gas supply. Production in the region is just slightly more than 10 per cent of the global total, and reserves less then 5 per cent, which is estimated to last only over a decade at the current rate of production.
This has led the Asian countries to become more dependent on West Asia, whose share of oil imports to the region is expected to rise steadily from about 75 per cent now to nearly 95 per cent by 2010. Hence the need to reduce this over-dependency is very crucial, particularly given the delicate political scenario in West Asia which would affect the global oil supply and the price regime.
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