Asian Oil Companies Expand Internationally to Quench Domestic Thirst

Wednesday 27 June 2012, Amsterdam

A heavy reliance on oil and gas imports is forcing key Asian countries to look further afield to meet domestic needs, finds the new Asian Oil Companies Expand Internationally to Quench Domestic Thirst report.

According to the report, the national oil companies (NOC) of China, India, South Korea and Thailand are increasing investments in overseas oil and gas exploration projects as consumption levels continue to exceed national production.

As these emerging economies continue to grow, the disparity between need and domestic production becomes more significant. India’s current oil and gas production represents around 40% of its consumption, while for South Korea that figure drops to below 10%. Both China and Thailand import approximately half of the oil and gas they require.

Mergers and acquisitions also constitute a key tactic in ensuring domestic energy security. For the period March 2010 to March 2012, Korea National Oil Corporation (KNOC) carried out 10 acquisitions and asset transactions, including planned deals – the largest figure for any of the Asian NOCs.

However, as a nation, China carried out more acquisitions during this window than any other Asian country as it continues to expand its economy. Researchers found that, through its three major NOCs (CNOOC Limited, PetroChina Company and China Petroleum and Chemical Corporation) the country invested $17.31 bn in overseas acquisitions (for the deals for which the value was disclosed).

China, India, South Korea and Thailand all have oil and gas reserve lives of seven to 26 years, but have limited capacity to swell domestic production and will continue to look to international sources to maintain resource levels.

This report provides an in-depth analysis of the role of NOCs of key Asian countries – India, South Korea, China and Thailand – in securing domestic energy security. The report details how the NOCs are increasing investments abroad to mitigate the demand-supply gap of oil and gas in their countries. The report also provides details on the major international acquisitions of key NOCs of India, South Korea, China and Thailand. It also details the estimated share of the NOCs towards ensuring oil and gas supplies for their countries. The Asian NOCs of India, South Korea, China and Thailand are playing an active role to ensure domestic energy security. Increasing demand and limited supplies of oil and gas have increased the import dependency of these countries. In order to secure oil and gas supplies, NOCs of the key Asian countries are aggressively increasing their international operations.