Indonesia and Malaysia are set to become the primary drivers of upstream oil and gas investments in Southeast Asia, thanks to significant new liquefied natural gas (LNG) discoveries and carbon capture projects. According to BMI, the research arm of Fitch Solutions, the total capital expenditure (capex) by the four major oil and gas companies in ASEAN is expected to reach USD 24 billion in 2024, an 8% year-on-year increase, and USD 31 billion by 2025. BMI highlights that most of this investment will focus on the development of natural gas fields, including LNG infrastructure and regasification, which are anticipated to dominate the region’s upstream and midstream oil and gas investments. The surge in capex is also supported by increasing investments in low-carbon and energy transition projects by state-owned enterprises (SOEs) in ASEAN, such as Petronas, Pertamina, and PTTEP.
Indonesia and Malaysia have both launched successive oil bidding rounds since 2021, leading to new production-sharing contracts. Petronas, with substantial contributions from private firms, recorded 21 exploration discoveries in 2023. Petronas has allocated USD 13.1 billion for 2024, which is expected to rise to USD 14.6 billion in 2025, primarily focusing on offshore LNG projects and the Kasawari gas and CCS/CCUS projects. Pertamina’s capex is projected to increase to USD 8.5 billion in 2024, driven by successful offshore exploration, which strengthens the outlook for new greenfield gas projects. Meanwhile, PTTEP has earmarked USD 32.6 billion for 2024-2028, with 48% allocated for domestic gas projects. BMI projects that the combined efforts of these SOEs will sustain a 4.7% annual growth in natural gas production from 2024 to 2028, positioning Southeast Asia as a significant contributor to the Asia-Pacific region’s gas supply.
