Asia oil companies must ally 'against oil giants'
Asia oil companies must ally 'against oil giants'
SINGAPORE (Reuters): Asian states should foster energy
alliances with neighbours in the wake of global industry
consolidation that has created a handful of international oil
giants, an ASEAN energy conference was told on Wednesday.
Solutions among Asian oil companies may not always give the
best bottom line, but tangible and political benefits will be
more profitable in the longer run, said Baihaki Hakim, President
of Indonesia's Pertamina.
"In line with the new trend of merger and acquisitions, we
(Pertamina) don't feel that it will be beneficial for us to work
with the big oil corporations," Hakim told reporters on the
sidelines of the 26th ASEAN Council on Petroleum (ASCOPE) in
Singapore.
"They are so big and have different strategies and agendas in
different markets. Realistically we see, for example, our
partners as Petronas or SPC. We don't put all deals strictly on
bottom line values, there are other issues to pursue."
ASCOPE comprises Indonesia, Brunei, Malaysia, Philippines,
Thailand, Singapore, Vietnam and Cambodia.
Choo Chiau Beng, chairman of Singapore Petroleum Company
(SPC), told delegates that mega-mergers such as BP-Amoco-Arco ,
Exxon-Mobil and Total-Fina-Elf had given these companies
political clout in negotiations for oil and gas projects with
host governments.
"We need to explore ways to ensure that we are not out-muscled
by these mega players," Choo said.
SPC recently made its first foray into the upstream sector, by
buying a 15 percent stake in the Kakap production sharing
contract in the West Natuna Sea offshore Indonesia.
Pertamina has signed memoranda of understanding for upstream
projects with Petronas and Petrovietnam.
Pertamina's Hakim said Asian oil counterparts were more
committed than before to working up regional solutions upstream
and downstream.
"I am inclined to see the spirit of cooperation and the
momentum becoming stronger and stronger as compared with what
happened in the last two decades," he said.
"Without forming and developing our competitive advantage
through synergy today, it would be hard for all of us to survive
in a more and more competitive environment."