The past ten years have seen major changes in the Asia Pacific petroleum position. Significant new offshore reserves have come onstream, petroleum position. Significant new offshore reserves have come onstream, as have major gas fields and LNG facilities. The region as a whole, while not totally insulated from the cycle affecting the worldwide petroleum business, nevertheless has retained a more comfortable position in the most recent recession, protected by the indigenous demand in the region, prior success ratios and the relatively attractive economics. Significant discoveries of gas within the region have created a position of over-abundance as it remains difficult to develop indigenous gas utilization - something which must be a task over the next decade. The prospects, opportunities and legislation in many countries are excellent, the question must be whether the industry will extend its efforts further and whether other competing regions get a greater share of exploration dollars in the next decade as many of the competing areas lie in hostile, expensive environments. We continue to believe that the signs remain set for continued growth in the region across a broad spread of the industry.
The Asia Pacific region remains a dynamic petroleum environment which has stood the current downturn in the world petroleum economy better than most other areas and remains an area where prospects and opportunities are excellent. To see the reasons why this has happened, there is no better way than to look back ten years and compare the production, significantly up in oil equivalent terms, the reserves, significantly increased in overall terms and of course, the proportion of offshore production, up significantly from the relatively small beginnings in the late sixties and early seventies.
Perhaps however, the most striking aspect continues to be the widespread discoveries within the region both geographically and within the geological column. While the gross reserves shown below, illustrate a preponderance of Tertiary oil and gas, the significance is that many preponderance of Tertiary oil and gas, the significance is that many discoveries have been made in older rocks, and as the drill moves deeper this is inevitably likely to increase.
ASIA PACIFIC ESTIMATED PROVEN RESERVES BY GEOLOGICAL AGE
PERIOD OIL GAS PERIOD OIL GAS (BILLION (TRILLION BBLS) CUBIC FEET)
TERTIARY 49 141 CRETACEOUS 6 1 JURASSIC 2 2 TRIASSIC 2 TR PERMIAN 6 8 PERMIAN 6 8 TOTAL 65 152
While the pace of exploration drilling has fluctuated over the last ten years, the consistency of success and the improving logistical and operating environment has continued to make it possible for new operators to enter the region without some of the risks which were part of the package in earlier times. package in earlier times.
Inevitably, as we have said before, in reviewing operations within the region, those who have stayed have reaped the benefits of time, and the benefits of a cyclical industry. Suffice to say that rates of return, particularly if we pick key countries, such as Indonesia, are as favorable particularly if we pick key countries, such as Indonesia, are as favorable as those achievable in any of the top competitors for exploration funds elsewhere in the world, particularly the United Kingdom, or even the United States. If countries in the region are to continue to attract a flow of significant exploration funds, their legislation will have to reflect that element of competition with the other main operating regions, and particularly with the new glamour areas that come across the geological particularly with the new glamour areas that come across the geological scene from time to time.
Indonesia : 23Australia : 25United Kingdom : 23