The subsea segment of the oil and gas industry is the by far the fastest growing industry in the world today. The global turnover is expected to grow by 30% from today towards 2011. This creates opportunites for companies that are not part of this booming oil anmd gas industry today..

A recent study shows that the players in the oil and gas industry is finding new platforms to collaborate on. The buyers no longer trust their own contact database to be the one to find suppliers that gives them the lowest price. Online platforms like OilGasPortal.Com - the oil and gas industry business directory provide the oil and gas industry with the platform they need to source the lowest bidder in minutes. These eBusiness markets are not yet fully recoginzed, but the players using them are certainly the winners in the long term. The study showed that the avaerage supply chain manegment could save as much 30% by actively using such platforms. 

Indonesia has installed electrical generating capacity estimated at 24.7 gigawatts, with 80 percent coming from thermal (oil, gas, and coal) sources, 18% from hydropower, and 2% from geothermal. Prior to the Asian financial crisis, Indonesia had plans for a rapid expansion of power generation, based mainly on opening up Indonesias power market to Independent Power Producers (IPPs). The crisis led to severe financial strains on state-utility Perusahaan Listrik Negara (PLN), which made it difficult to pay for all of the power for which it had signed contracts with IPPs. PLN has over $5 billion in debt, which has grown markedly in terms of local currency due to the decline in the value of the rupiah. The Indonesian government has been unwilling to take over the commercial debts of PLN.

Indonesia is facing an electricity supply crisis, due to underinvestment in power generation capacity. Intermittent blackouts are a problem across Java. Demand for electrical power is expected to grow by approximately 6-7 percent per year. The majority of Indonesias electricity generation is currently fueled by oil, but efforts are underway to shift generation to lower-cost coal and gas-powered facilities. Hydropower also is being expanded. Sumitomos 1,320-MW Tanjung Jati B plant in Central Java, a 730-MW plant at Cilegon in West Java financed by Mitsubishi, and a Chinese-funded 600-MW station at Cilacap on the southern coast are all due to be commissioned in mid-2006. However, after these projects are completed, after long delays, there is a lack of adequate new capacity "in the pipeline" to meet the countrys needs.
In January 2003, the World Bank announced that it was planning to finance three micro-hydropower plants in the Indonesian province of Papua (Irian Jaya). A feasibility study on all of the areas water sources has already been conducted, and the results are being studied. By building these facilities, the World Bank hopes to improve services to the local population as well as to encourage development activities in the province.

In October 2003, the World Bank approved a $141 million loan to Indonesia for the purpose of improving the power sector on Java and Bali, which use approximately 80% of Indonesias power generation capacity. The project includes support for a corporate and financial restructuring plan for PLN and technical assistance for a restructuring program for state gas company, Perusahaan Gas Negara (PGN), that will provide for increased natural gas supplies for electricity generation. The restructuring plan requires that PLN must restructure two of its subsidiaries, PT Indonesia Power and PT Pembangkit Jawa Bali (PJB). The two together supply about 80% of the power supply for Java and Bali, according to reports.
In 2003, the government renegotiated 26 power plant projects with the IPPs. Of those, five projects will be taken over by the government, in cooperation with PLN and Pertamina. Legislation enected in September 2002, which would have facilitated competition in electricity generation by 2007, was overturned by the Indonesian constitutional court in December 2004. Substitute legislation was enacted in February 2005 which clears the way for full private ownership of electricity generation assets. The Indonesian government sees the need for 24 gigawatts of additional generating capacity by 2013, but foreign investors have largely avoided the Indonesian power sector in recent years due to the poor financial condition of PLN and the uncertain legal climate.

Aside from the lack of adequate investment in generating capacity, long-haul transmission also remains a problem. For example, the 3,200-MW Paiton power plant in East Java, which is the countrys largest, has inadequate transmission lines to central and western Java, preventing transmission of electricity from an area with a local surplus to an area with inadequate supplies.

Indonesia has proven natural gas reserves of 90.3 trillion cubic feet (Tcf). Most of the countrys natural gas reserves are located near the Arun field in Aceh, around the Badak field in East Kalimantan, in smaller fields offshore Java, the Kangean Block offshore East Java, a number of blocks in Irian Jaya, and the Natuna D-Alpha field, the largest in Southeast Asia. Despite its significant natural gas reserves and its position as the worlds largest exporter of liquefied natural gas (LNG), Indonesia still relies on oil to supply about half of its own energy needs. About 68% of Indonesias LNG exports go to Japan, 19% to South Korea, and the remainder to Taiwan. As Indonesias oil production has leveled off in recent years, the country has tried to shift towards using its natural gas resources for power generation. However, the domestic natural gas distribution infrastructure is inadequate.The main domestic customers for natural gas are fertilizer plants and petrochemical plants, followed by power generators.

The liberalization of Indonesias downstream oil and gas sector has been under discussion for several years. In October 2001, the Indonesian legislature passed the much-anticipated Oil and Gas Law 22/2001 which limited Pertaminas monopoly on upstream oil development (which requires it to be included in all PSCs) by the end of 2003. Also, Pertaminas regulatory and administrative functions were transfered to other entities, while its regulatory role was spun off to a new body, BP Migas. Legal changes adopted in 2005 have allowed for the extension of contracts beyond the previous 20-year limit, which helped to facilitate the deal with ExxonMobil for the development of the Cepu fields.

Pertamina maintained its retail and distribution monopoly for petroleum products until July 2004, when the first licenses for a foreign firm to retail petroleum products are due to be awarded to BP and Petronas of Malaysia. The government is still promising to open the sector to full competition, although progress has been very slow to date. Political interests with ties to Pertamina are likely reluctant to see the state-run firm lose its assured revenue streams. Pertamina itself was changed to a limited liability company by presidential decree in 2003, and is slated to be fully privatized by 2006.

Indonesias Ministry of Mines and Energy has taken over the function, formerly carried out by Pertamina, of awarding and supervising PSCs with foreign oil companies. Foreign firms also are to be freed from some of the regulatory approval requirements which they argue hinder their efficiency. One concern foreign oil companies have with the new law is the granting of a limited authority to regional governments to tax oil companies profits.

Indonesias economic growth surpassed expectations in 2004, and accelerating growth has continued into 2005. Indonesias real gross domestic product (GDP) grew at a rate of 5.1 percent in 2004, up from 4.9 percent in 2003. Real GDP growth is forecast to be 5.5 percent for 2005, although imbalances in the macroeconomic picture, such as increasing budget deficits caused by oil price subsidies on the local market, could lead to future problems.
Tension exists between the central government in Jakarta and leadership at the regional level. The distribution of oil and gas revenues between the central government in Jakarta and regional governments in areas which produce oil and gas has been regularly disputed. Since Indonesias transition to democracy in 1999, the countrys regional governments have been pressing for a greater share of oil and gas revenues.
While Indonesia is still a member of the Organization of Petroleum Exporting Countries (OPEC), it became a slight net importer of oil in 2004, and its oil production has continued to decline. The current government is reportedly considering leaving OPEC, but no decision to do so has been announced.

In 2004, Singapore had 7.4 gigawatts (GW) of installed generation capacity, all of which came from conventional thermal sources (primarily natural gas). More recent figures from the Singaporean government show that total installed generation capacity will surpass 10 GW by year-end 2006. State-owned companies continue to dominate Singapores electricity sector, although the restructuring and privatization process has begun. The three main generation companies - PowerSeraya, Senoko Power, and Tuas Power - together represent 90 percent of Singapores electricity generation capacity.
In April 2001, the government of Singapore created the Energy Markets Authority (EMA), a regulatory agency for Singapores electric utility sector. The EMA has worked on details of the electricity sector privatization, as well as efforts to maintain a secure and reliable electricity industry. Although liberalization has been delayed, the three big generation companies - PowerSeraya, Senoko Power, and Tuas Power - have all been divested to the Singapore governments investment arm, Temasek Holdings, in preparation for privatization. Temasek will proceed with the sale of the three once liberalization of the gas market, including adoption of a new Gas Market Code, is completed. This could come as early as year-end 2006. Liberalization of the electricity market began in January 2003, when, for the first time, power could be sold directly to industrial customers.

Singapores Senoko Power currently imports 155 million cubic feet per day (Mmcf/d) of natural gas through a pipeline from Malaysian national oil and gas company Petronas. The Senoko-Petronas deal is set to expire in mid-2008, though news reports suggest the two firms are working to extend the contract. In June 2005, Singapore conglomerate Keppel Energy reached an agreement to purchase 115 Mmcf/d of natural gas over 18 years from Petronas. To transport the natural gas, Keppel and Petronas are jointly constructing a 3 mile pipeline between Plentong in the southern Malaysian state of Johor to the Senoko area in the north of Singapore. However, the Plentong pipeline will have a capacity to transport up to 290 Mmcf/d of natural gas, which could provide for increased sales of natural gas to Singapore in the future.
In January 1999, the Singaporean consortium SembGas signed an agreement to purchase West Natuna natural gas from Indonesian state energy company Pertamina. Indonesian natural gas to Singapore comes via pipelines from two separate fields. Since January 2001, West Natuna has supplied 325 Mmcf/d as part of a 22-year deal, while a pipeline from Asamera in Sumatra began supplying 350 Mmcf/d in 2006. Another 100 Mmcf/d of natural gas is anticipated to be delivered via the Asamera pipeline from the ConocoPhillips field to power Singapores planned Island Power station, although the project has experienced numerous delays.

A shortage of oil storage space in Singapore has spurred expansion of the countrys independent storage facilities. Singapores major oil refineries hold 88 million barrels of storage capacity, or 88 percent of the countrys total storage capacity. Singapores independent storage operators have a total current capacity of 24.4 million barrels, although this number will grow as companies bring new facilities on line. Over the last five years Singapores independent storage providers have reportedly been running at above 90 percent capacity. In May 2006 Vopak began operations at its fourth storage terminal in Singapore, adding 2.1 million barrels of capacity at its Banyan site on Jurong Island. Oiltanking expects to complete a new facility in August 2006, also at Banyan, that would add 1.5 million barrels of storage capacity. Oiltanking anticipates that the new site would store clean petroleum products and will be linked by pipeline to its existing storage terminal on the island and also Shells Bukom refinery. Another new storage project comes from Horizon Terminals, a subsidiary of Dubai-based Emirates National Oil Corporation (ENOC), which expects to finish constructing a 5.3 million barrel storage terminal on Jurong Island by the end of 2006, likely adding a second phase in mid-2007.

While this growth in petroleum storage in Singapore is driven by high regional oil demand, some independent analysts have expressed concern that the new terminals may lead to excess capacity. In 2006, construction began on the joint Hin Leong Trading/PetroChina Universal Terminal on Jurong Island, which will reportedly have a storage capacity of 14.2 million barrels. In April 2006, Singapore also greenlighted the development of storage facilities in underground rock caverns on Jurong Island with a potential capacity of up to 20.1 million barrels. Phase 1 of the project is scheduled to begin in late 2006 and add 8.8 million barrels of new storage capacity by 2009, with a possible Phase 2 adding an additional 11.3 million barrels in future years if there is sufficient demand. The underground caverns will store petroleum liquids and products like naptha and gasoil.

Singapores strategic location at the entrance to the Strait of Malacca, through which roughly one-third of global sea commerce passes each year, has helped it become one of the most important shipping centers in Asia. The Port of Singapore, one of the worlds busiest in terms of shipping tonnage, is a key component of Singapore’s prosperity and economic health. Singapore is also a leader in new biotechnologies, petroleum refining, and the manufacture of computer components.

Recognizing that Singapores future growth depends on overcoming energy resource limitations and a small domestic market, the government of Singapore has vigorously encouraged local firms to regionalize their operations and to invest abroad. The government also has undertaken efforts to attract additional foreign investors to Singapore. China, India, and the fellow Association of Southeast Asian Nations (ASEAN) have been identified as priority countries in Singapores regionalization drive. During his May 2003 visit to Washington, Former Prime Minister Goh Chok Tong signed a Free Trade Agreement, which came into effect on January 1, 2004, as well as a Memorandum of Intent of Cooperation in Environmental Matters. Trade between Singapore and the United States traditionally has been strong. The United States is Singapores second largest trading partner, and Singapore is the United States eleventh largest export market, receiving $20.6 billion in U.S. exports in 2005.
Singapores economy has recovered from the lingering effects of the 2001-2003 global recession and an outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003 that curbed tourism and consumer spending. In 2005, Singapore’s real gross domestic product (GDP) grew at a rate of 6.4 percent, lower than the 8.4 percent rate in 2004. Economic forecasts suggest Singapores real GDP will grow at 5.3 percent in 2006 and 4.9 percent in 2007.

Singapore has no domestic oil reserves. The country consumed 763,000 barrels per day (bbl/d) of oil in 2005, flat from the previous year. Oil consumption in Singapore has increased 15 percent since 2000. Despite its lack of domestic oil resources, Singapore is a major oil refining and trading hub.