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."