Collaboration, fiscal terms needed to speed up deepwater projects

Collaboration among offshore service providers, conducive fiscal terms as well as improving level of competence are needed to accelerate the development of deepwater oil and gas projects in Southeast Asian region, including Indonesia, industry players said at the Deeepwater Asia Pacific 2011 conference in Hanoi, Vietnam.

Sean Middleton, Project Manager of Premier Oil Vietnam Offshore B.V. said that compared to Gulf of Mexico and South American regions, deepwater oil and gas industry has not matured in the region. Most oil and gas service players in this part of region, he said, are not large scale players. Therefore, they need to improve their level of competence.

?For example, in constructing subsea projects, there is limited capability (of service providers) in this region. What needs to be done is merger or pooling of service by service providers,? Middleton said.

One area which also needs to be addressed, he said, is creating conducive regulatory environment and fiscal terms. ?Perhaps regulators need to stimulate by offering improved fiscal and better cost recovery terms to this (deepwater) industry,? said Middleton.

Most industry players agree that there has been increasing activities in deepwater projects in this part of the region, including Vietnam, Thailand, Malaysia and Indonesia. They said that the current global financial crisis has limited impact on the development of deepwater projects as this is a long-term project.

Some industry players say that access to technology, large investment and high risks profile of deepwater projects are also hampering the development of deepwater projects.

?People need to accept the fact that deepwater projects are getting deeper and harsher. So, you need the scale and competence. Therefore, players need to polarize and consolidate,? Hassan Assad Basma, Executive Director/Chief Executive Officer of Bumi Armada Bhd of Malaysia said.

Meanwhile, Siri Jirapongphan, Executive Director of Petroleum Institute of Thailand, said that the other issues that need to be addressed in the development of deepwater projects are environmental, health and safety measures.

He said PTTEP of Thailand has a "not so positive experience" with regard to Montara case, which is considered as a deepwater project.

"We are looking forward in terms of development. But we need to prevent incidents as much as possible, prepare for containing the incidents. And, when happening, communicate that clearly to the public, so that it saves the industry as a whole,? he said. (roffie)