Press Release
Home > Press Release > PR Newswire
Recovery of US Economy Crucial to Increase Crude Oil Demand
Font Scale: 
SINGAPORE, Jan. 6 /PRNewswire/ -- 2008 was a historic year for the Oil &Gas industry as oil prices hit a record high of close to US$150/barrel andfell steeply to below US$50/barrel in a matter of 3 months.
(Logo: http://www.newscom.com/cgi-bin/prnh/20081117/FSLOGO)
According to Frost & Sullivan Asia Pacific Research Manager of Energy &Power Systems Practice Subramanya Bettadapura, Exxon Mobil and Shell reaped arecord third quarter profit of US$14.8 billion and US$8.45 billion, whileother industry sectors had their market cap and profits evaporate, which ledto a huge outcry regarding the unregulated oil & gas futures trading markets.
He added that Singapore and Malaysia have immensely benefited from the oil& gas boom of 2008 as it translated into more order bookings for offshore rigs,platforms, Floating Production Storage & Offloading (FPSO) vessels, and crudeoil.
However, the global financial crisis and slowing down of the US economywill have an impact on the Oil & Gas industry in Asia for the coming year.
"The recovery of the US economy is crucial for crude oil demand toincrease as the US imports far more crude oil than China or India. Demand fromthese two countries alone is not enough to keep prices above US$100 per barrelas was earlier speculated when oil prices were at a peak of US$147 perbarrel," Bettadapura said.
In terms of industry specifics, Bettadapura says that there will becancellation of large oil & gas projects across the globe because of thedecrease in crude oil prices. "However, the Southeast Asian region is notaffected as most of the investments in oil & gas projects are governmentfunded," he adds.
He continues to say that the current cutback on investments into theupstream segment will have a negative impact on future supplies as crude oilprice is likely to be very steep when demand recovers.
According to Bettadapura, there will be an increase in Malaysian upstreamOil & Gas investment in 2009 as PETRONAS is keen on increasing domesticreserves and production. The Oil & Gas industry in Singapore for the comingyears sees encouraging activity as well.
"The order booking for marine vessels and drilling rigs are complete tillQ1 2011. This should keep the shipyards in Singapore busy till then. However,new bookings in 2009 for the supply period beyond Q2 2011 might suffer," headded.
One of the hot sub-sectors for 2009 to 2011 identified by Bettadapurainclude marine support vessels which cover offshore supply vessels, divingsupport vessels, and ROV support vessels, as increased offshore explorationand production activities will lead to an increase in demand for such vessels.
Other areas include a strong demand for the supply of drilling rigs in theAsian region, especially India, and an increasing demand in Brownfieldservices where there is a pressing need to retain current levels of productionin mature fields in Malaysia.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, partners with clients toaccelerate their growth. The company's TEAM Research, Growth Consulting andGrowth Team Membership(TM) empower clients to create a growth-focused culturethat generates, evaluates and implements effective growth strategies. Frost &Sullivan employs over 45 years of experience in partnering with Global 1000companies, emerging businesses and the investment community from more than 30offices on six continents. For more information about Frost & Sullivan'sGrowth Partnership Services, visit http://www.frost.com.
MEDIA CONTACT: Donna Jeremiah Corporate Communications - Asia Pacific P: +603 6204 5832 F: +603 6201 7402 E: djeremiah@frost.com Carrie Low Corporate Communications - Asia Pacific P: +603 6204 5910 E: carrie.low@frost.comSOURCE Frost & Sullivan
According to Frost & Sullivan Asia Pacific Research Manager of Energy &Power Systems Practice Subramanya Bettadapura, Exxon Mobil and Shell reaped arecord third quarter profit of US$14.8 billion and US$8.45 billion, whileother industry sectors had their market cap and profits evaporate, which ledto a huge outcry regarding the unregulated oil & gas futures trading markets.
He added that Singapore and Malaysia have immensely benefited from the oil& gas boom of 2008 as it translated into more order bookings for offshore rigs,platforms, Floating Production Storage & Offloading (FPSO) vessels, and crudeoil.
However, the global financial crisis and slowing down of the US economywill have an impact on the Oil & Gas industry in Asia for the coming year.
"The recovery of the US economy is crucial for crude oil demand toincrease as the US imports far more crude oil than China or India. Demand fromthese two countries alone is not enough to keep prices above US$100 per barrelas was earlier speculated when oil prices were at a peak of US$147 perbarrel," Bettadapura said.
In terms of industry specifics, Bettadapura says that there will becancellation of large oil & gas projects across the globe because of thedecrease in crude oil prices. "However, the Southeast Asian region is notaffected as most of the investments in oil & gas projects are governmentfunded," he adds.
He continues to say that the current cutback on investments into theupstream segment will have a negative impact on future supplies as crude oilprice is likely to be very steep when demand recovers.
According to Bettadapura, there will be an increase in Malaysian upstreamOil & Gas investment in 2009 as PETRONAS is keen on increasing domesticreserves and production. The Oil & Gas industry in Singapore for the comingyears sees encouraging activity as well.
"The order booking for marine vessels and drilling rigs are complete tillQ1 2011. This should keep the shipyards in Singapore busy till then. However,new bookings in 2009 for the supply period beyond Q2 2011 might suffer," headded.
One of the hot sub-sectors for 2009 to 2011 identified by Bettadapurainclude marine support vessels which cover offshore supply vessels, divingsupport vessels, and ROV support vessels, as increased offshore explorationand production activities will lead to an increase in demand for such vessels.
Other areas include a strong demand for the supply of drilling rigs in theAsian region, especially India, and an increasing demand in Brownfieldservices where there is a pressing need to retain current levels of productionin mature fields in Malaysia.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, partners with clients toaccelerate their growth. The company's TEAM Research, Growth Consulting andGrowth Team Membership(TM) empower clients to create a growth-focused culturethat generates, evaluates and implements effective growth strategies. Frost &Sullivan employs over 45 years of experience in partnering with Global 1000companies, emerging businesses and the investment community from more than 30offices on six continents. For more information about Frost & Sullivan'sGrowth Partnership Services, visit http://www.frost.com.
MEDIA CONTACT: Donna Jeremiah Corporate Communications - Asia Pacific P: +603 6204 5832 F: +603 6201 7402 E: djeremiah@frost.com Carrie Low Corporate Communications - Asia Pacific P: +603 6204 5910 E: carrie.low@frost.comSOURCE Frost & Sullivan
For more iinformation, go to www.prnewswire.com
- Sponsored By
-
Recent Press Release
Advertisement
POS Magnetic Card Readers
Online distributor for point of sale equipment, TYSSO and Pegasus.
