Southeast Asia Oil and Gas Downstream Market - Growth, Trends, and Forecasts (2023-2028)

The Southeast Asia oil and gas downstream market is expected to register a CAGR of greater than 4% during the forecast period.

The market was negatively impacted by COVID-19. Presently the market has now reached pre-pandemic levels.

Key Highlights

• Over the medium period, the increasing demand for oil and natural gas and rising foreign direct investments are expected to boost the Southeast Asian oil and gas downstream market during the forecast period.
• On the other hand, with the advent of reliable and cheaper renewable energy, more investment may not be focused on refineries, thereby hindering the market.
• Nevertheless, Southeast Asian countries are eager to discover and produce oil and natural gas reserves, leading to increased exploration and discoveries, which could provide an opportunity for many refineries as the cost of importing reduces.
• The Vietnamese downstream industry is expected to grow substantially during the forecast period. Increasing consumption in the country is a significant factor in this growth. Construction and expansion of refineries are also occurring, which is expected to boost the market’s growth.

Southeast Asia Oil & Gas Downstream Market Trends

Refining Sector to Witness Growth

• Southeast Asia is home to some of the fastest-growing economies. The cumulative population is expected to grow by 13% by 2030, with the region's GDP doubling in the same period.
• In recent years, the region witnessed an increase in oil refining capacity. Many construction and expansion projects are planned in major countries like Thailand, Singapore, and Malaysia, including the Pengerang Energy Complex and Sipitang Oil & Gas Industrial Park (SOGIP) in Malaysia, the Sriracha refinery expansion in Thailand, and the expansion of integrated manufacturing complex in Singapore by ExxonMobil.
• According to the BP Statistical Review of World Energy 2022, Singapore had the largest refining capacity of 1,461 thousand barrels daily as of 2021, followed by Thailand, Indonesia, Malaysia, Vietnam, and other Southeast Asian countries.
• Southeast Asia has been witnessing increasing investments in the oil and gas downstream industry, with Indonesia, Malaysia, and the Philippines being the regional fueling hotspots. For instance, in October 2022, the Indonesian national energy company Pertamina intended to invest up to USD 50 billion in the country's refinery sector. Approximately USD 24 billion will be spent on a greenfield refinery that will be built in East Java province in collaboration with the Russian state energy company Rosneft. The refinery will occupy an area of 840 hectares in Tuban Regency, and there will be 14 refining units for vehicle fuels and seven for petrochemicals.

Vietnam Downstream to Witness Growth

• The country has been long dependent on the import of refined oil from countries like India and China, which have a robust downstream sector. To reduce the dependence on refined oil imports and supplement the growing Vietnamese upstream industry, the Government of Vietnam initiated the expansion of the downstream sector.
• Increased investments in the country will also support the growth of the market. For instance, in December 2021, Essar jointly invested USD 300 million in Vietnam's offshore hydrocarbon block. Thus, increasing oil and gas production will likely support the market's growth during the forecast period.
• In April 2022, Binh Son Refining and Petrochemical of Vietnam announced an investment of USD 1.2 billion to renovate and expand its Dung Quat refinery, increasing its processing capacity to 7.6 million tons of crude oil per year from 6.5 million tons.
• In Vietnam, oil consumption increased to 464 thousand barrels daily in 2021 from 397 thousand barrels in 2014. Increasing demand and increasing oil consumption are boosting the market’s growth.
• Hence, the Vietnamese downstream industry is expected to witness substantial growth during the forecast period. New proposed agreements and expansion in the refineries and petrochemical plants are expected to be prominent drivers in the Vietnamese downstream industry.

Southeast Asia Oil & Gas Downstream Market Competitor Analysis

The Southeast Asian oil and gas downstream market is moderately consolidated. The major companies (not in a particular order) include Petroliam Nasional Berhad, Shell PLC, ExxonMobil Corporation, PT Pertamina, and Hyundai Engineering Co., among others.

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• The market estimate (ME) sheet in Excel format
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