Oil and gas investors in Southeast Asia could approve the highest annual number of oil and gas fields since 2016, according to data by environmental non-profit Global Energy Monitor (GEM).
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A new report based on data from GEM’s Global Oil and Gas Extraction Tracker and Asia Gas Tracker showed that one project – Malaysian national oil firm Petronas’ Hidayah field offshore East Java, Indonesia – has already been approved this year.
Thirteen other gas projects across Southeast Asia could potentially reach final investment decisions (FID) this year, which will determine if these projects can proceed. Five of these potential gas production projects are located in Indonesia, four in Vietnam, two in Malaysia and one each in Brunei and Myanmar.
“If all projects reach FID, the region would eventually tap more than 20 billion cubic metres of gas production annually, an 18 per cent increase over current output,” said GEM in a statement today.
Since companies and countries are likely to fully deplete these reserves to ensure a complete return on investment, these projects would have a significant lifespan and lock in gas as a substantial component of the region’s energy mix, GEM said.
But such oil and gas expansion is inconsistent with these countries’ longer-term energy transition plans. For instance, Brunei’s national 2035 vision and economic blueprint outline aims to reduce the economy’s reliance on hydrocarbons.
Meanwhile, Malaysia’s Ministry of Economy has acknowledged that the country’s gas reserves are rapidly shrinking and that it will soon have to import more of the fossil fuel.
Image: Global Energy Monitor
GEM pointed out that the planned oil and gas projects are incompatible with plans to limit global warming to 1.5°C, and many are located in ecologically-sensitive areas such as the Coral Triangle and Mekong Delta.
The Coral Triangle encompasses parts of Indonesia, Malaysia, the Philippines and is considered one of the most biodiverse marine sites globally. It is home to protected areas such as the Tun Mustapha Marine Park in Sabah, where environmental groups have protested oil and gas exploration plans.
“If all current proposals go into production, more than 1.6 million square kilometres of the Coral Triangle would be directly impacted by fossil fuel development,” said GEM.
A map of the Coral Triangle Area in Southeast Asia, which is considered one of the most biodiverse marine areas in the world. Planned oil and gas exploration activities in the region overlap with these sites. Image: Coral Triangle Initiative
However, many of these projects have already faced multi-year delays and ongoing disputes could delay them further (see chart below). Given the ongoing uncertainty surrounding these developments, countries should focus on deploying more renewable energy instead, said GEM.
Vietnam, which has faced some of the longest delays to FIDs for its gas projects, has struggled to kickstart its Ca Voi Xanh or Blue Whale gas field, as US oil firm ExxonMobil, which had made the discovery in 2011, is undergoing restructuring and focusing on new energy streams. Singapore-based oil and gas firm Jadestone Energy, meanwhile, has spent years trying to secure approval to develop the Nam Du and U Minh gas fields, which it has yet to achieve.
Meanwhile in Malaysia, an ongoing dispute over gas distribution between national oil company Petronas and Sarawak state-backed oil firm Petros has spooked foreign firms. Thai national oil company PTTEP withdrew from the planned Lang Lebah gas field, which was one of its largest discoveries ever at between 6 trillion and 7 trillion cubic feet of gas. Another foreign fossil fuel company, United States oil giant ConocoPhillips said this month that it would withdraw from a US$3.1 billion project in Sarawak, amid company-wide layoff plans.
“Rather than pursuing high-risk fossil fuel ventures, Southeast Asian governments have a critical opportunity to redirect investment toward clean, scalable energy systems that support economic resilience and align with global climate commitments,” said GEM.
This view echoes those of other energy experts, which are tracking the impact of US tariffs on Asian economies and have warned that relying on liquified natural gas (LNG) will not ease the region’s energy security concerns.
Image: Global Energy Monitor
