Oil and gas terminal at Kemaman, Malaysia
Southeast Asian project plans scale back
Only developments with both low breakeven costs and favourable locations are likely to proceed for the foreseeable future
The prospect of a sustained low oil price environment raises questions over whether a range of development projects in Southeast Asia will proceed. Producers in the region have not distinguished themselves in terms of cost efficiency, creating a degree of vulnerability, says Sittidath Prasertrungruang, head of research at investment firm Country Group in Bangkok. Greater proximity to Asian demand centres than competing supply options in the Mid-East Gulf has made it feasible to operate projects with oil at around $30/bl, he says. But prospect of prices lingering below that level have “changed the whole scenario”. Complex problems Projects awaiting FID that are, in Prasertrungruang’s view, l
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