Kuala Lumpur: The world is not running out of oil and gas despite decades of drilling and production, said Petronas President and Group Chief Executive Officer Tan Sri Shamsul Azhar Abbas.
If industry players were to look beyond Asia on a global scale, a significant supply is due to be on-stream or under development, and the world is still making conventional discoveries, he said in his state of the industry address at the 17th Asia Oil and Gas Conference here Monday.
"Owing to new discoveries, technological advances and operational experiences, technically, recoverable resources are estimated to last for the next two centuries at current trends of consumption," he said.
According to the International Energy Agency, proven reserves globally have increased since 1990 despite growth in consumption, and as at 2011, the estimate was around 1.5 trillion barrels with a further 5.9 trillion barrels of recoverable resources yet to be found, he added.
Shamsul Azhar said Iraq holds the world's fifth largest proven oil reserves of 143 billion barrels.
"Other notable conventional discoveries include Brazilian pre-salt, West African Transformation Margin and East Mediterranean basins.
"The new frontiers of the Arctic, East Africa, the Caspian and the Black Sea also look promising," he added.
However, as energy is a key contributor to economic prosperity, heavy dependence on short-term spot energy imports enhance the risk of supply interruptions and price volatility, he said.
"Enhancing energy security will be the single most critical challenge within Asia in the foreseeable future. Perhaps this explains the increased level of activities and investments by Asia's national oil companies in the past few years," said Shamsul Azhar.
He said numerous upstream investments in exploration blocks and construction of new pipelines and regasification terminals are a testimony to the energy security strategy.
"Similarly for Petronas, we embarked on an aggressive exploration and production strategy, testing new play types, deeper waters and more complex fields," he said, adding to ensure energy security, there is a need to allow industry players to determine the market's own commercial viability.
"By doing so, industry players will have the flexibility to manage their own risks, work to deliver security of supply and meet demand at market-determined prices," said Shamsul Azhar.
He also called for collaboration among oil companies, service providers and policy makers to craft solutions that encourage utilisation of technologies and attract best-in-class operational excellence.
"Advancements in technology, such as Enhanced Oil Recovery and carbon dioxide management, have to a certain extent increased oil extraction from depleted and mature fields while slowing down the natural production decline," he said.
Shamsul Azhar added there is a need for multilateral cooperation from all industry stakeholders to ensure a more efficient and sustainable way of managing both demand and supply.
"Our industry must continuously find avenues to operate in a responsible and environmentally sustainable manner," he said.
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