ASIA: Region’s economic outlook remains resilient despite tough environment, says ADB

(EnergyAsia, September 30 2016, Friday) — Asia’s developing economies remain on course for another two years of strong growth despite the headwinds of tough global conditions, predicts the Asian Development Bank (ADB).
In its latest survey of the region, the bank said it expects the 45 developing economies to grow by a collective 5.7% in 2016 and 2017, down slightly from last year’s 5.9%. The survey covered some of the region’s smallest economies like the Cook Islands, Fiji, Kiribati and the Marshall Islands to giants like China, India and South Korea.
China’s nearly US$11-trillion economy, the world’s second largest, is expected to grow by 6.6% in 2016 and 6.4% in 2017, down from last year’s 6.9%. With export growth weakening and external demand for its products slowing, China will rely on a combination of strong fiscal measures and monetary stimulus to keep its economy expanding, said the bank.
The Indian economy will continue to outperform China’s over the next two years, boosted by expanded private consumption as a result of rising wages and pensions, and improving rural incomes. The ADB expects India’s economy to grow by 7.4% in 2016 and 7.8% in 2017, compared with 7.6% last year.
The ADB said Asia’s mostly net-energy importers will benefit from the subdued inflationary outlook on account of oil prices likely staying near low levels for another year. Barring any new major supply disruptions, the bank expects the Brent crude price to average US$43 per barrel in 2016 and US$50 next year.
Regional inflation is hovering well below the 10-year average of about 4%, the bank said. Consumer prices are seen rising by 2.6% in 2016 and 2.9% in 2017.
On the other hand, the region’s net energy exporters will continue to feel the impact of weak oil prices now entering its third year since crashing in mid-2014.
“While many energy exporters have sovereign wealth funds to allow early windfalls to be applied to later contingencies, prolonged low energy prices will require reviews on how the funds should be managed and used,” said the ADB.
The region’s net energy exporters include Azerbaijan, Kazakhstan, Turkmenistan, Uzbekistan, Mongolia, Brunei, Indonesia, Malaysia, Myanmar, Vietnam, and Papua New Guinea.

ASIA: Oil and gas import dependence to rise as refiners missed chance to add capacity, says Bain

(EnergyAsia, September 22 2016, Thursday) – Asia’s import dependence on oil and gas products is set to rise further as the region’s refiners have largely failed to add or upgrade production capacity to take advantage of low feedstock cost over the last two years, said Bain & Company.

As a result, the consulting firm predicts that “significant challenges” will force out the industry’s laggards for failing to prepare for the challenges of increased global competition, the expanded flows of new crude grades, tightened regulations and higher environmental standards.

“While these global trends will affect the entire refining sector, some countries are better positioned than others to thrive over the next decade,” said Dale Hardcastle, leader of Bain’s Southeast Asia oil and gas practice.

Market, operating conditions and quality of asset portfolio will be key to the refiners’ ability to compete as spelt out in detail in the firm’s latest report, “Full Potential for Oil Refiners in a Challenging Environment”.

The report found that the region has largely failed to reduce oil and gas product imports as its refining capacity expansion have not kept pace with demand growth.

On a global scale, Bain’s analysts found that independent refiners in the Asia-Pacific region, Middle East national oil companies (NOCs), and the Commonwealth of Independent States are among the most competitive while African and Latin America state firms and independents in the European Union are lagging behind.

“As oil costs stabilize, refineries are in for tough times,” said Mr Hardcastle.  “It’s important for refiners around the world to tackle competitiveness in a structured way, which is where a full potential agenda can create a strategic advantage.”

State-owned firms in China and other parts of Asia are expected to benefit from the region’s rising oil demand.

“Refiners in the Asia-Pacific are well positioned to withstand the shift in the flows of crude feedstock and refined products around the world, but we anticipate continued pressure amid ongoing changes in the sector,” said Mr Hardcastle.

“This means that even the most favoured players will have to work hard to maintain their full potential.”

The consulting firm recommends that refiners focus on competing in four strategic areas:

– Access to large and growing markets, especially in the Asia-Pacific region;

– Maintain high-level operating conditions including feedstock strategy, operational efficiency and capital expenditure project excellence;

– Managing portfolio strategy that balances scale, complexity and location

– Having a robust operating model and organizational framework that reduces costs and raises effectiveness. Refiners must know how to manage regulators and stakeholders and have a vision that captures the promise of digitalisation.

MIDDLE EAST: Region’s market for protecting oil and gas industry worth US$13 billion by 2018

(EnergyAsia, September 19 2016, Monday) — The market for protecting oil and gas infrastructure in the Middle East is worth US$18 billion by 2018, with cybersecurity spending in the global industry expected to reach US$1.87 billion, according to an Abu Dhabi event organiser citing separate studies.

The Middle East study was undertaken by MarketsandMarkets while US-based ABIresearch provided the forecast for the global cybersecurity spending on oil and gas infrastructure.

For the first time, security for energy infrastructure will be a topic all on its own at the upcoming Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC 2016), said organiser dmg events.

Former NATO Commander General Sir Richard Shirreff will deliver the keynote address at the inaugural ‘Security in Energy’ exhibition and conference to be held at the Abu Dhabi National Exhibition Centre on November 7 to 10.

The programme will feature technical sessions and panel discussions on disaster prevention, emergency readiness, event recovery, security solutions and risk mitigation for the energy sector.

“The promise of emerging technology brings with it a growing concern of data and infrastructure protection within the industry, which has proven to be a persistent challenge that needs to be immediately addressed in the region and across the world,” said a dmg events statement.

The market to protect government, energy and critical infrastructure in the Middle East will grow to US$34 billion by 2020, the statement said, citing a recent Frost & Sullivan report.

Cyber threats and attacks against the oil and gas industry are becoming increasingly common and sophisticated, forcing organisations to continuously improve cybersecurity safeguards and protocols to protect information, equipment and processes.

“In 2016, there is an urgency for nations to adopt national integrated cyber/physical security frameworks to pre-empt the growing external threats that are now constantly exploring vulnerabilities in energy facilities across the supply chain,” said Sally Leivesley, managing director of UK-based risk management firm Newrisk Limited.

“Global advances in technology have allowed us to connect with others in a way we never have before. In the energy sector, it has propelled stakeholder collaboration and the sharing of knowledge and information, enabling real-time interaction between experts, professionals, and those working on the field,” said Hamad Obaid Al Mansoori, director general of the UAE Telecommunications Regulatory Authority (TRA).

“However, with greater interconnectivity comes greater challenges within information security, making it crucial that we are always one step ahead when it comes to protecting sensitive data. This means organisations need to develop a consolidated, multi-layered strategy for safeguarding critical industry information.”

TRA and the Critical Infrastructure and Coastal Protection Authority (CICPA) are supporting the “Security in Energy” event, said dmg events. The conference and exhibition will address both the physical and virtual threats to critical infrastructure.