Malaysia warns ASEAN of energy supply risks
Malaysia warns ASEAN of energy supply risks
Lawrence Yong, Reuters, Kuala Lumpur
Malaysia, an oil producer and promoter of a massive regional
gas pipeline, on Monday urged fellow ASEAN nations to increase
energy cooperation in the face of threats to supply.
"The current risk of supply disruption is very real and may
perhaps carry greater repercussions than the 1973 oil embargo,"
Malaysia's Deputy Prime Minister Abdullah Ahmad Badawi told an
energy conference.
"ASEAN should review the ASEAN petroleum security
agreement ...to minimize exposure towards emergency situations
owing to short term shortages in petroleum supply," Abdullah
said.
He cited the Israel-Palestinian crisis, threats of terrorism
and high-running tensions between India and Pakistan as factors
that could lead to supply disruptions.
The two-day 7th Asia Oil & Gas Conference is the first major
gathering of Asian oil company leaders since the Sept. 11 attack
on the United States.
Politics and economic factors largely outside the industry's
control have rocked oil prices since the September assaults and
sent them swinging between US$18 and almost $30 a barrel.
Asia pumps only around one-third of its crude requirements of
some 20 million barrels per day (bpd) and is dependent on the
Middle East for 70 to 80 percent of imports.
President and CEO Hassan Marican of Malaysia's state oil
company Petronas, said measures underway include a review of the
Association of South East Asian Nations oil security agreement
and closer upstream cooperation.
"What the 21st century oil and gas industry needs is not only
a dynamic business plan, but also real time strategies that could
swiftly respond to different scenarios," Hassan said.
He said the ASEAN energy security pact needed urgent review
following expansion of the group of Southeast Asian countries --
Malaysia, Singapore, Indonesia, Vietnam, Thailand, Brunei, Laos,
Cambodia, the Philippines and Myanmar .
"The key thing is that ASEAN today is made up of 10 member
countries compared to the four or five countries when this
concept was introduced," Hassan said.
"It's timely for this provision to be relooked, redefined. It
would result in a new set of understanding."
Hassan did not detail the arrangement but said it calls on
member countries to provide mutual help during times of supply
gaps. Only four ASEAN countries -- Malaysia, Indonesia, Vietnam
and Brunei -- export crude oil.
Hassan said the petroleum security agreement had been
activated only several times in the last 30 years, most recently
when Indonesia's Arun liquefied natural gas plant was down after
Exxon Mobil withdrew staff because of local unrest.
The Malaysian deputy prime minister said border politics
should be downplayed where energy is concerned.
"We need to speed up in implementation of cross-border oil and
gas supply infrastructure," Abdullah said.
Malaysia, through Petronas, has championed the massive Trans-
ASEAN gas pipeline project as well as recent cooperation with
Indonesia, Thailand and Vietnam to explore for oil and gas in
common areas.
Japan, Asia's largest oil consumer and virtually entirely
import dependent, however, appeared not to share Malaysia's
appetite for regional oil security cooperation.
"I don't think so. We have energy dialogue, not security,"
Kazuo Matsunaga, Director general of Japan's Agency of Natural
Resources and Energy said.
Matsunaga said Japan was ready only to deliver technical
assistance and experience in stockpile issues.