THE ASIAN OIL PROBLEM Regional Cooperation in ASEAN

THE ASIAN OIL PROBLEM: Regional Cooperation in ASEAN By Guillermo R. Balce ASEAN Centre for Energy Jakarta, Indonesia 2001

Introduction To analyse the oil situation in Asia and unravel the underlying problems, Southeast Asia must be treated as a distinct entity from Northeast Asia and South Asia. This is dictated by at least two major reasons: Geography and the Association of South East Asian Nations (ASEAN). This presentation provides a brief view of the oil industry situation in the ASEAN region, as follows: Oil Industry Structure Supply – Demand Crude Oil Trade Flows and Chokepoints Petroleum Reserves ASEAN Cooperation

Oil Industry Structure of the ASEAN Countries DOMINANT SECTOR ACTIVITY AREA COUNTRY Regulation Upstream Downstream BOGA BSP & Private Contractors Importers, Retailers INDONESIA Pertamina / Contractors / Operators LAO PDR MTT None MALAYSIA Petronas / Contractors / Operators MYANMAR MOGE/Contractors Gov’t Enterprises PNOC / Private BSP CNPA Gov’t Deregulated 1998 BRUNEI D. CAMBODIA PHILIPPINES DOE MTT SINGAPORE EMA None Deregulated THAILAND PTT / Contractors Deregulated 1991 VIETNAM Petro. Vietnam / Contractors Gov’t Companies BOGA: Brunei Oil & Gas Authority; BSP: Brunei Shell Petroleum; CNPA: Cambodia National Petroleum Authority; MTT: Ministry of Trade and Tourism; MOGE: Myanmar Oil and Gas Enterprise; DOE: Department of Energy; PNOC: Philippine National Oil Company; EMA: Energy Market Authority; PTT: Petroleum Authority of Thailand.

Oil Supply - Demand ASEAN Crude Oil Production (in KTOE) COUNTRY BRUNEI DARUSSALAM CAMBODIA INDONESIA LAO PDR MALAYSIA MYANMAR PHILIPPINES SINGAPORE THAILAND VIETNAM ASEAN Source: ACE 2001 Note : * (1 st semester only) 1995 8, 680. 00 76, 741. 00 0. 00 35, 090. 00 97. 00 0. 00 2, 550. 00 7, 880. 00 131, 038. 00 1998 7, 801. 17 0. 00 68, 372. 56 0. 00 35, 784. 00 549. 00 25. 44 0. 00 3, 618. 00 N. A. 116, 150. 17 2000 9, 597. 68 0. 00 *27, 777. 01 0. 00 *14, 260. 00 544. 00 46. 10 0. 00 4, 891. 00 N. A. ++57, 115. 79

Oil Supply - Demand Petroleum Product Consumption of the ASEAN Countries (in KTOE) COUNTRY 1995 1998 2000 BRUNEI DARUSSALAM 449. 00 548. 88 900. 18 CAMBODIA 431. 00 525. 20 974. 00 37, 132. 32 42, 517. 04 *22, 624. 02 378. 00 607. 00 MALAYSIA 18, 986. 00 20, 883. 40 *8, 279. 00 MYANMAR 1, 322. 00 548. 88 638. 65 12, 437. 00 19, 766. 18 13, 145. 10 INDONESIA LAO PDR PHILIPPINES SINGAPORE THAILAND VIETNAM ASEAN Source: ACE 2001 Note : * (1 st semester only) 4, 726. 00 N. A. 32, 476. 00 22, 853. 44 5, 278. 00 5, 806. 00 113, 615. 32 114, 056. 02 N. A 27, 048. 36 N. A. ++ 73, 609. 31

Oil Supply - Demand ASEAN Refinery Outputs (in KTOE) COUNTRY BRUNEI DARUSSALAM CAMBODIA INDONESIA LAO PDR 1995 1998 528. 00 N. R. 34, 051. 71 N. R. 2000 888. 84 539. 75 N. R. 44, 509. 20 N. R. 1 N. R. 26, 354. 31 N. R. MALAYSIA 16, 686. 00 16, 732. 40 MYANMAR 926. 00 888. 84 821. 29 15, 303. 00 * 16, 144. 00 14, 858. 30 * 46, 629. 00 * 47, 694. 00 22, 211. 00 32, 707. 89 PHILIPPINES SINGAPORE THAILAND VIETNAM ASEAN N. R. 136, 334. 71 Source: ACE 2001; *IEA – Oil Information 2000; Note : N. R. – No Refineries; 1 (1 st semester only) N. R. 159, 565. 17 1 10, 552. 00 N. A. 33, 700. 26 N. R. ++86, 825. 91

Current Oil Security Situation: Self Sufficiency COUNTRY BRUNEI DARUSSALAM CAMBODIA INDONESIA LAO PDR MALAYSIA MYANMAR PHILIPPINES SINGAPORE THAILAND VIETNAM Source: ACE 2001 Note : * (1 st semester only) SELF SUFFICIENCY (CRUDE OIL PROD. / TOTAL PETRO. CONSUMPTION) 1995 1998 2000 19. 330 14. 210 10. 660 0. 000 2. 070 1. 610 *1. 230 0. 000 1. 850 1. 710 *1. 720 0. 000 0. 850 0. 010 0. 060 0. 004 0. 000 0. 080 0. 160 0. 180 1. 490 N. A.

Life Expectancy of Reserves 196. 00 RESERVE LIFE Reserve/Production or *Consumption (Years) 25 0. 00 0 1, 372. 00 20 0. 00 0 MALAYSIA 478. 80 13 MYANMAR 28. 00 51 PHILIPPINES 39. 90 *3 0. 00 0 21. 84 6 364. 00 46 2500. 54 * 22 COUNTRY BRUNEI DARUSSALAM CAMBODIA INDONESIA LAO PDR SINGAPORE THAILAND VIETNAM ASEAN Source: ACE 2001 OIL RESERVE (MTOE)

Crude Oil Trade Flows & Chokepoints

Petroleum Reserves ASEAN* 17. 861 Source: BP Statistical Review 2001 * ACE 2001

Petroleum Reserves VIETNAM MYANMAR LAO PDR Oil Gas Oil : Gas : - : 2. 6 BBl : 25 TCF Oil : 0. 20 BBl Gas : 12. 07 TCF PHILIPPINES Oil : 0. 285 BBl Gas : 4. 6 TCF Oil : Gas : - THAILAND Oil : 0. 156 BBl Gas : 12. 2 TCF CAMBODIA BRUNEI Oil : 1. 4 BBl Gas : 13. 8 TCF SINGAPORE Oil : Gas : - MALAYSIA Oil : 3. 42 BBl Gas : 84. 4 TCF INDONESIA Legend Oil field/s Gas/condensate field/s Oil/gas field/s Oil : 9. 8 BBl Gas : 166 TCF

Petroleum Reserves COUNTRY BRUNEI DARUSSALAM OIL (Billion Barrel) GAS (Trillion Cubic Feet) 1. 400 13. 800 - - 9. 800 166. 000 - - MALAYSIA 3. 420 84. 400 MYANMAR 0. 200 12. 070 PHILIPPINES 0. 285 4. 600 - - THAILAND 0. 156 12. 200 VIETNAM 2. 600 25. 000 17. 861 318. 070 CAMBODIA INDONESIA LAO PDR SINGAPORE TOTAL Source: ESSPA Report 2001; BP Statistical Report 2001.

ASEAN Energy Cooperation Energy Security : The driving force 2000 GLOBAL OIL CRISIS 1995 1990 1985 1980 Gulf War (1990) Iran – Iraq Tanker War (1981 -1988) 2 nd Oil Shock (1979) 1975 1 st Oil Shock (1973) 1970 ASEAN ENERGY COOPERATION E R G Y S E C U R I T Y ASEAN Plan of Action for Energy Cooperation (1999 -2004) Establishment of ACE (1999) Hanoi Plan of Action ASEAN Vision 2020 (1999) ASEAN Program of Action on Energy Cooperation (19951999) ASEAN Energy Amendment (1995); AEMEC to AMEM Priority for ASEAN Power Grid, APSA and TAGP (1994) Thai-Indo Coal Coop. (1990) AEEMTRC creation (1988) Phil – Indo Coal Coop. (1987 ASEAN Energy Cooperation Agreement (1986) ASEAN Petroleum Security Agreement (APSA, 1986) 2000 1995 1990 1985 ASEAN Emergency Petroleum Sharing Scheme Supplementary to ASCOPE’s (1983) 1 st Meeting of HAPUA (1981) Indonesia & Malaysia assisted other ASEAN Countries on oil needs / 1 st AEMEC (1980) ASCOPE’s Emergency Petroleum sharing scheme (1977) ASCOPE creation (1976) ASEAN Establishment (1967) ASCOPE: ASEAN Council on Petroleum ; AEEMTRC: ASEAN-EU Energy Management Training and Research Centre; TAGP: Trans-ASEAN Gas Pipeline; AMEM: ASEAN Ministers on Energy Meeting 1980 1975 1970

The ASEAN Energy Sector ASEAN HEADS OF STATE/GOVERNMENT OTHER MINISTERIAL MEETINGS AMM ASC SOM AMMST OTHER MINISTERIAL MEETINGS AMEM COST ASEAN CENTRE FOR ENERGY (ACE) LEGEND: AEBF: ASEAN Energy Business Forum AEM: ASEAN Economic Ministers AFOC: ASEAN Forum on Coal AMEM: ASEAN Ministers of Energy Meeting AMM: ASEAN Ministerial Meeting AMMST: ASEAN Ministerial Meeting on Science & Technology ASC: ASEAN Standing Committee ASCOPE: ASEAN Council on Petroleum COST: Committee on Science & Technology EE&C SSN: Energy Efficiency and Conservation Subsectoral Network HAPUA: Heads of ASEAN Power Utilities/Authorities NRSE SSN: New & Renewable Sources of Energy Subsectoral Network SCNCER: Sub-Committee on Non-Conventional Energy Research S G: Secretary General SOM: Senior Officials Meeting SOME: Senior Officials Meeting on Energy AEM ASEAN SG SCNCER NRSE SSN ASEAN SECRETARIAT EE & C SSN SOME HAPUA ASCOPE AEBF AFOC

Energy Cooperation in General ASEAN VISION 2020 “Interconnecting arrangements in the field of energy … for electricity, natural gas … within ASEAN through the ASEAN Power Grid and a Trans-ASEAN Gas Pipeline. ” Declared by the ASEAN Heads of State / Government at the 2 nd ASEAN Informal Summit in Kuala Lumpur, 14 – 16 December 1997

ASEAN Plan of Action for Energy Cooperation 1999 -2004 PROGRAMME AREAS ASEAN Power Grid Trans-ASEAN Gas Pipeline Coal Energy Efficiency and Conservation New and Renewable Sources of Energy Regional Energy Outlook, Energy Policy and Environmental Analysis

TAGP Master Plan 2001

ASEAN Power Grid 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 15 Peninsular Malaysia – Singapore Thailand – Peninsular Malaysia Sarawak – Peninsular Malaysia Sumatra – Peninsular Malaysia Batam – Bintan – Singapore Sarawak – West Kalimantan Philippines – Sabah Sarawak – Sabah – Brunei Thailand – Lao PDR – Cambodia Thailand – Myanmar Vietnam – Cambodia Lao PDR – Vietnam Thailand – Cambodia Sabah – East Kalimantan

Other ASEAN Cooperation Schemes Related to Oil • ASEAN Petroleum Sharing Agreement (APSA, 1986) • Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Area (AFTA, 1992) • Agreement for the Facilitation of Search of Ships in Distress and Rescue of Survivors of Ship Accidents (1975) • ASEAN Framework Agreement on Multimodal Transport (2001) • The remaining transport-related Protocols for the ASEAN Framework Agreement on the Facilitation of Goods in Transit (2001) • ASEAN Framework Agreement on the Facilitation of Inter. State Transport (2001).

Conclusions • Southeast Asia has strategic chokepoints for major Middle East oil destinations. • The oil industries in five of the ten ASEAN Countries have dominant government roles. But, Indonesia, Malaysia and Vietnam are on the road to deregulation and privatisation. • Brunei Darussalam, Indonesia, Malaysia and Vietnam are net oil exporters. Myanmar may also follow. However, ASEAN as a whole is likely to become net oil importer in 22 years. • The Association of South East Asian Nations (ASEAN) ensures unified actions on issues of energy and economic security. • The main elements of ASEAN Energy Cooperation are: – Specialized bodies on various fields of energy, with ASCOPE and ACE in the forefront of cooperation in petroleum. – ASEAN Plan of Action for Energy Cooperation guided by ASEAN Vision 2020 of a Trans. ASEAN Gas Pipeline and an ASEAN Power Grid. – ASEAN Petroleum Sharing Agreement (APSA) – ASEAN Free Trade Area Scheme (AFTA)

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Crude Oil Import and Export (in KTOE) COUNTRY BRUNEI D. CAMBODIA INDONESIA IMPORT 1995 0. 00 N. A. 1998 0. 00 N. A. EXPORT 2000 0. 00 N. A. 1995 1998 8, 319. 00 7, 509. 00 N. A. 2000 9, 415. 00 N. A. 9, 301. 00 10, 519. 00 *5, 066. 00 42, 344. 00 0. 00 MALAYSIA 1, 315. 00 2, 014. 00 3, 973. 00 19, 833. 00 18, 640. 00 *8, 503. 00 MYANMAR 536. 00 650. 00 657. 00 0. 00 PHILIPPINES 16, 005. 00 16. 00 15, 215. 00 92. 00 0. 00 SINGAPORE 54, 785. 00 THAILAND 22, 840. 00 LAO PDR VIETNAM ASEAN N. A. 104, 782. 00 Source: ACE 2001 Note : * (1 st semester only) N. A. 33, 924. 00 N. A. 39, 169. 00 N. A. 47, 123. 00 +64, 080. 00 65. 00 716. 00 7, 839. 00 79, 208. 00 35, 178. 00 *13, 313. 00 N. A. 1, 031. 00 N. A. 62, 358. 00 +31, 231. 00

Import & Export of Petroleum Products (in KTOE) COUNTRY IMPORT 1995 1998 BRUNEI D. 7. 00 51. 47 CAMBODIA * 525. 00 * 675. 00 22, 075. 09 24, 745. 81 0. 28 * 607. 00 MALAYSIA 9, 411. 00 9, 359. 50 MYANMAR 201. 00 2, 054. 00 INDONESIA LAO PDR PHILIPPINES SINGAPORE 1998 2000 0. 00 49, 260. 06 43, 144. 09 14, 134. 80 0. 00 13, 113. 00 7, 428. 00 7, 193. 80 14, 378. 00 767. 35 884. 68 10. 00 2, 122. 16 3, 269. 49 1, 496. 00 * 889. 00 1, 731. 16 9, 190. 00 1, 266. 19 VIETNAM 5, 094. 00 * 6, 518. 00 28. 42 1995 0. 84 27, 199. 00 *33, 873. 00 75, 756. 37 2000 0. 00 THAILAND ASEAN EXPORT N. A. 16, 769. 95 N. A. 1, 182. 88 N. A. 79, 985. 48 ++15, 248. 42 Source: IEA – Oil Information 2000; *ACE – ESSPA 2001 Note : 1 (1 st semester only) 66, 667. 00 *45, 654. 00 N. A. 453. 00 4, 213. 81 4, 859. 27 0. 00 125, 314. 05 101, 095. 54 ++15, 103. 23