SE Asian oil firms urged to unite

SE Asian oil firms urged to unite

KUALA LUMPUR (AFP): Southeast Asia's national oil companies should explore alliances to counter the threat from the four global giants, the president of Malaysia's state energy firm Petronas said on Monday.

The biggest threat facing the world oil industry "is the domination of the super-majors," Mohamad Hassan Marican told an Asia Oil and Gas Conference.

Their low cost of capital, access to huge untapped reserves and strong technical and development skills put them in a class of their own, he told more than 700 delegates in a speech.

Mohamad Hassan said the combined reserves of Shell, ExxonMobil, BP Amoco and TotalFina Elf are the equivalent of 75 billion barrels of oil.

Their combined production capacity is the equivalent of about 13 million barrels a day.

To meet this challenge, national oil companies should seek formal and informal alliances with each other and explore niche areas of the world to invest in.

"We will need to partner with the super majors as we simply do not have the capacity to compete head on with them."

It was urgent for national oil firms "to work even closer together to keep pace with the industry giants, or risk being marginalized and forced to swallow the terms others impose on us."

Mohamad Hassan suggested that in the next five years "and purely on a hypothetical basis," the national oil firms of Indonesia, Malaysia, Thailand and Vietnam might consolidate, along with forming alliances elsewhere in the world.

Petronas chairman Azizan Zainul Abidin told the conference the Asia-Pacific region would be the world's major energy consuming region by 2010, he said.

"Unless there is an expansion in capacity, the projected increase in demand for energy in these developing countries may result in a crunch with a serious impact on both developed and developing countries."