Singapore-based oil explorer finds niche in Southeast Asia

Singapore-based oil explorer finds niche in Southeast Asia

Martin Abbugao, Agence France-Presse, Singapore

A Singapore-based company has found a niche in exploring for
oil and gas in Southeast Asia at a time when bigger players are
focused on potential major discoveries in other parts of the
world.

PEARL Energy Ltd. believes Southeast Asia has fallen under the
radar of big-league oil companies and the newly listed firm is
aiming take advantage of less competition to stake a major claim
in the region.

"We are big believers that Southeast Asia is underexplored,"
Richard Allan Lorentz, PEARL's chief business development
officer, told AFP in an interview.

"We see a lot of opportunities. We're hoping to expand our
exploration portfolio and our production base as rapidly as
possible."

News that the company's Jasmine oil field in the Gulf of
Thailand started production on June 7, a month ahead of schedule,
has further boosted confidence its gamble on the region is paying
off.

Jasmine is the company's fourth oil-producing field -- the
three others are located in Indonesia.

PEARL Energy, established in 2000, has nine contract areas in
Indonesia, Thailand and the Philippines covering 33,000 square
kilometres (13,200 square miles), comprising producing fields,
development projects and exploration prospects.

The company, which listed on the Singapore Exchange in April,
hopes to return to profitability this year after posting a net
loss of nearly US$6 million in 2004.

It already has the confidence of the stock market with shares
in the company closing at S$1.69 ($1.0) on Friday, up 141 percent
from its initial share offer of 70 U.S.cents in April.

Lorentz said the trend among many oil companies was to focus
on potentially bigger yielding fields in the North Sea in Europe,
the U.S. Gulf Coast, Central Asia and West Africa.

But for independent exploration and production firms such as
PEARL Energy, the modestly sized fields that Southeast Asia
offers are tantalizing enough.

Lorentz said the size of potential discoveries in the region
ranged from 50-250 million barrels as opposed to the billion-
barrel targets in the world's major oil fields.

"The former Soviet Union countries, West Africa are all focal
points right now for the major oil companies, among others, which
means that their backs are turned to Southeast Asia," he said.

"This allows us to go for targets that are still very, very
large for a company our size. The prospects for the region are
quite good when you are targeting those type of projects or field
sizes.

"In short, we saw a niche. It's a part of the world that has
high chances of commercial exploration success, it has similar
geology around the entire region and we have a team of people who
have lived and worked in Southeast Asia most of their careers."

Part of Southeast Asia's allure is that the chances of finding
oil or gas is higher than the world average and the region's
robust economies provide a captive energy market, Lorentz said.

One in every four wells drilled in the region is a discovery
well, and for PEARL Energy the success rate is even higher at 50
percent so far. This rate compares with the global average of one
discovery well in 10.

"Southeast Asia is unique to the world in terms of the oil and
gas business right now. It has a higher rate of success than the
worldwide average," said Lorentz, who is also president of the
Southeast Asia Petroleum Exploration Society.

"If you find gas, there is a growing infrastructure, a growing
pipeline network. The economies are all growing, which means
there's a high demand for energy.

PEARL Energy drilled nine exploration wells in 2003 and 2004,
five of them commercial discoveries. Another two wells have been
drilled this year and 20 more are programmed for drilling between
now and 2006.

Weerawat Chantanakome, director general of the ASEAN Center
for Energy, said the steep climb in world crude prices was an
important factor in the interest on the region from firms such as
PEARL Energy.

"I think the oil price hikes have boosted exploration in ASEAN
(Association of Southeast Asian Nations)," he told AFP.

PEARL Energy is backed by PT Austindo Nusantara Jaya, a
private Indonesian investment firm owned by the Tahija family,
and Japan's Itochu Corp. -- two of the biggest shareholders.