Malaysian PM urges "energy diplomacy" in Asia to beat high prices
Kuala Lumpur (Platts)--13Jun2005
Energy diplomacy is a viable strategic option for the Asian countries to tackle the new world order of high oil prices, Malaysian Prime Minister Abdullah Badawi said Monday, delivering the inaugural address at the 10th Asia Oil and Gas Conference in Kuala Lumpur. Sustained high oil prices are likely to become a reality as long as oil-producing countries cannot keep pace with global demand, Badawi said. Asia currently consumes 24-mil b/d and demand is estimated to grow to 33-mil b/d by 2020, or 30% of the world's total consumption, he noted. Asia will account for most of the future growth in world oil demand, he added. The race to secure resources among national oil companies and private oil companies will become more intense and competitive, Badawi said. "In this new world order, a viable option is political commitment to cooperate," the prime minister said, adding that "energy diplomay is the key". For oil-importing countries, energy diplomacy within the region could reduce reliance on external resources. Import-dependent nations like South Korea and Japan will rely less on stockpiling for energy security, which could remove critical pressure points in price levels, Badawi said. "In the future we will see Southeast Asia and South China become an interesting theater of energy diplomacy considering that many competing countries believe in [the potential of] the South China Sea." For oil-exporting countries, more technological collaboration and joint investments would ensure long-term supply, he said. "Asian national oil companies need vertical integration, production sharing ventures to secure energy resouces and long-term supply," Badawi said. Energy diplomacy would also minimize disputes over oil and gas fields in overlapping areas, he added. Indonesia and Malaysia in February this year locked horns over two oil and gas blocks in the Sulawesi Sea, to which both countries lay claim. After a bout of gunboat diplomacy, the two have entered negotiations. This story was originally published in Platts Global Alert http://globalalert.platts.com
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