KUALA LUMPUR (Aug 14): BMI forecasts that the capital expenditure (capex) of 15 key Asian oil and gas (O&G) companies will reach US$136.40 billion (RM603.91 billion) in 2024, marking a 4.8% increase from 2023.

In a note on Wednesday, it said the growth will be predominantly driven by Southeast Asian national oil companies (NOCs), with significant contributions from Malaysia and Indonesia.

The research firm said Petronas Carigali Sdn Bhd's capex is estimated to have risen by 5.4% year-on-year (y-o-y) to US$11.57 billion in 2023, due to higher domestic and international investments. 

In domestic operations, capex surged by 41% due to investments in the 2.0 MTPA nearshore floating liquefied natural gas (LNG) project and the carbon capture, storage and utilisation (CCS/CCSU) project integrated with the high CO2 Kasawari gas field in Sarawak. 

"Capex requirements for investments may rise significantly in 2025, if Petronas (Petroliam Nasional Bhd) goes ahead with the Lang Lebah natural gas project," it added.

Internationally, Petronas plans to increase investments in 2024, especially with the development of the Cameia and Golfinho fields offshore Angola, in collaboration with TotalEnergies and Sonangol P&P. Petronas holds a 40% interest in this project.

In Indonesia, exploration capex is set to rise following a production sharing contract signed by Petronas E&P Bobara Sdn Bhd for the Bobara Working Area offshore West Papua. Petronas E&P Bobara Sdn Bhd operates and holds a 100% stake in this area.

Malaysia anticipates steady growth in upstream exploration expenditures due to successive petroleum bidding rounds launched since 2021. Foreign companies are expected to maintain higher exploration expenditures, following significant O&G discoveries in 2023.

Meanwhile, BMI said there are significant investments from companies like Inpex, Santos, and mainland China's O&G firms that will bolster this capex growth. 

Asian NOCs are expected to focus primarily on upstream projects, natural gas field development, and renewables. 

While state-owned NOCs lead in low-carbon energy investments, private-sector involvement is increasing. Investments are also being channelled into power generation from renewable sources such as solar and wind.

In the downstream sector, major greenfield investments are anticipated in mainland China and India. 

China's three state-owned companies' combined capex is projected to grow marginally by 1% y-o-y to US$45 billion in 2024. 

Among them, China National Offshore Oil Corp (CNOOC) is expected to significantly increase its capital spending to nearly US$17 billion, with a substantial portion allocated to new field developments. CNOOC's capex in 2023 ranged from US$17 billion to US$18.2 billion, with 63% directed towards developing discovered O&G fields. In the first quarter of 2024, total capex increased by 17.2% y-o-y to US$4.1 billion, with over 65% spent on project development.

PetroChina is set to remain the largest spender, with a capex projection of around US$39 billion in 2024. In 2023, PetroChina's capex was approximately US$38.8 billion, up 0.4% from the previous year. About 90.2% of this capex was dedicated to exploration, production, and new energy projects. PetroChina is intensifying its efforts in unconventional O&G exploration and production, including shale and tight O&G, as well as coal bed methane projects.

PetroChina has significantly reduced investments in the downstream and refining sectors, where total investments fell from US$5.9 billion in 2022 to US$2.3 billion in 2023. This trend is expected to continue in 2024, with no major downstream projects in the pipeline. 

Sinopec, China's largest refining and petrochemical player, saw its capex decline by 15% y-o-y to US$2.9 billion in the first quarter of 2024. More than 66% of this capex was allocated to exploration and production activities. Capex for Sinopec’s downstream refining and petrochemical industry decreased by 20% y-o-y to US$873 million in the first quarter of 2024, mainly spent on expanding and upgrading the Guangzhou and Maoming refineries.

Looking ahead, Sinopec’s refining and petrochemical capex is expected to continue declining in 2025 as major projects near completion. However, the company plans to dedicate approximately 30% of its total capex to this segment, with plans to expand refining capacity at Zhenhai and upgrade the Anqing and Yangzi refineries.