Asia Pacific Oil And Gas CAPEX Market- Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Asia Pacific Oil And Gas CAPEX Market- Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Asia Pacific oil and gas CAPEX market is expected to grow at a CAGR of more than 3% in the forecast period of 2022-2027. During the pandemic restriction, a sharp decline in transport and industrial activity severely impacted the oil & gas demand. This decreased demand for oil & gas in the worldwide market, coupled with geopolitical factors in oil-producing countries, resulted in a significant drop in oil and gas prices. Factors such as an increase in demand for oil & gas in power, transportation, and industrial application due to rapid industrialization and urbanization are anticipated to drive the investment in the oil & gas industry in the region. However, volatile crude oil and gas prices, slow economic growth, and unstable geopolitical conditions are expected to restrain the Asia Pacific oil and gas CAPEX during the forecast period.

Key Highlights

• The upstream sector is expected to grow with a higher growth rate during the forecast period. An increased focus on oil & gas discoveries in the region is expected to drive the segment in the near future.
• The countries such as India, Indonesia, Singapore, and Malaysia are fast-growing economies in the Aisa Pacific region. Thus, the demand for oil & gas products for transportation and power generation is expected to rise. According to the IEA, the oil demand in the Asia Pacific was around 30.8 mb/d and is expected to rise to 38.5 mb/d by 2030, which presents a tremendous opportunity for the oil & gas CAPEX market.
• China is one of the leading countries to invest more in the oil & gas industry. This can be ascribed to increased investment by the national oil companies in the country.

Key Market TrendsUpstream is Expected to Dominate the Market

• The Asia Pacific's oil product demand by 2050 is expected to rise to 38.8 million b/d. The increased demand for oil products can be ascribed to the rapid development in the region, particularly the country such as India, China, Indonesia, and Japan.
• The natural gas consumption was around 575.2 billion cubic meters in 2010, which rose to 918.3 billion cubic meters in 2022—totaling a 22.7% share of global natural gas consumption. Similarly, oil consumption in the region was 27,963 thousand barrels daily. In 2021, it was around 35,806 thousand barrels daily, making the Asia Pacific region the biggest consumer of oil products globally.
• Thus, to cater to the increased demand, the oil & gas companies are investing heavily in the oil and gas industry. For instance, In 2022, a Chinese company, Sinopec, is expected to invest more than USD 31 billion in upstream exploitation, especially for the crude oil in Shunbei and Tahe fields and natural gas fields Sichuan province Inner Mongolia region.
• In July 2021, the Indian government approved an order allowing 100% foreign direct investments in oil and gas Public Sector Units. Furthermore, the government has allowed 100% Foreign Direct Investment in upstream and private sector refining projects.
• Factors are expected to boost the oil and gas industry investment in the region during the forecast period.

China to Dominate the Market

• China is the leading producer of natural gas in the Asia Pacific region. In 2010 natural gas production was 96.5 billion cubic meters; it reached 209.2 billion cubic meters in 2021. In terms of global natural gas production, China contributed around 5.2% in 2021.
• In 2021, China had total proved natural gas reserves of 8.4 trillion cubic meters, 4.5% of global natural gas reserves, and oil reserves of around 26 thousand million barrels, 1.5 % of global proved oil reserves.
• Furthermore, according to the OPEC, in 2030, China's primary energy demand for oil and gas is expected to be around 15.1 mboe/d and 8.1 mboe/d, respectively. Further, demand for oil and gas is likely to grow by about 15.6 mboe/d and 10.1 mboe/d, respectively.
• To full fill this increased demand, China government is taking various initiatives to increase investment in the oil & gas industry, such as FDI policy reforms, financial benefits, subsidies, and other policy reforms.
• In March 2022, Aramco announced a joint venture with North Huajin Chemical Industries Group Corporation and Panjin Xincheng Industrial Group. In the project, Aramco will supply up to 210,000 barrels per day of crude oil as feedstock to the refinery complex. The complex is anticipated to be operational in 2024.
• All these factors are expected to drive the oil and gas CAPEX market in China during the forecast period.

Competitive Landscape

The Asia Pacific oil and gas CAPEX market is moderately fragmented. Some of the key players in the market include BP plc, Exxon Mobil Corporation., Shell plc, Pacific Oil & Gas Ltd, and Chevron Corporation.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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