Thursday March 7, 2013

End of era of easy oil shifts interest to relatively cheaper means of extracting gas


<B>Waldie:</B> ‘It is tougher to find easy oil.’ Waldie: ‘It is tougher to find easy oil.’

KUALA LUMPUR: Energy companies will put greater emphasis on developing their gas production facilities further this year due to the relatively cheaper means of deriving them, energy market research firm Douglas-Westwood said.

Associate director Jason Waldie said this was mainly due to developments in the wider industry which saw the era of easy oil and the associated low production ceiling costs vanishing on finite supply.

“The (oil) majors seem to be very interested to increase their gas supplies. We have a large amount of spending, a decrease in overall production while the peak reserves years have passed this is not good for shareholders,” Waldie said.

“What this means is that it is getting tougher to find easy oil (with lower ceiling costs) with the more hostile environments offshore. There is a reason why gas is making a big move globally and this is likely the reason for it,” he added.

At the opening of the Offshore Asia 2013 conference here yesterday, Waldie said that in relation to this, there was a trend developing where governments around the world were also keen to build more gas-fired power plants as opposed to coal-fired ones.

He said that in the oil segment, the biggest expenditure this year was expected to be in the exploration and production sub-segments.

Meanwhile, chairman of the Malaysian External Trade Development Corp (Matrade) Datuk Mah Siew Keong said the government agency would take several small and medium enterprises (SMEs) to an offshore conference in the United States and Europe.

“The SMEs can thus offer their services to these multinational companies and we (Matrade) plan to invite them to set up their bases here as well,” Mah added.

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