Asia-Pacific’s (APAC) oil and gas sector looks set to rebound over the next 12 months as rising demand, stronger commodity prices and an uptick in merger and acquisition (M&A) activity bring greater confidence to the region.
That is according to Wood Mackenzie (WoodMac), which predicts rising Asian LNG demand, the return of China’s national oil companies (NOCs) to growth mode and new appetite for upstream investment to be key factors influencing the sector, not only in APAC, but also globally into 2019.
APAC LNG demand is set to grow a further 60 percent by 2030, WoodMac said in a statement sent to Rigzone. China’s “national energy champions” are starting to become more active too, according to WoodMac Senior Analyst Maxim Petrov.
“CNOOC and PetroChina are raising their domestic budgets and returning to the international stage,” Petrov said in a WoodMac statement.
“Investment at home is increasingly shifting to gas, driven by its strategic national importance and lower carbon intensity. The NOCs will aim to capitalise on China’s growing gas demand, with shale gas, LNG storage and pipeline infrastructure gaining prominence,” Petrov added.
“Expect the Chinese NOCs to continue focusing on large conventional oil fields in the Middle East and Latin America, but also target integrated gas opportunities in Russia, Qatar and Asia-Pacific,” he continued.
WoodMac said M&A activity is also seeing a resurgence in the region, with over $6.8 billion worth of upstream assets changing hands in 2018.
“Australia accounts for much of this uptick, with Santos’s $2.2 billion acquisition of Quadrant Energy, the pick of the deals down under,” WoodMac said in a company statement.
Santos announced the acquisition of 100 percent of Quadrant Energy for $2.15 billion, plus potential contingent payments, in August this year. Santos said the acquisition of Quadrant “is fully aligned with Santos’ growth strategy to build on existing infrastructure positions around the company’s core assets,” in a company statement released in August.
Back in February, WoodMac announced that decommissioning APAC’s offshore assets could cost over $100 billion. In a company statement released at the time, WoodMac described the task as a “mammoth” one for which “the various stakeholders are largely unprepared.”
WoodMac produces independent analysis across a range of sectors, including upstream oil and gas, LNG and refining. The company, which is the official knowledge partner for the 2018 CWC World LNG & Gas Series, 10th Asia Pacific Summit, has locations all over the world.
