ASEAN Energy Transition Road Map

Oil and gas companies in Southeast Asia have been a strong source of economic growth. As they move towards a lower carbon footprint, the 5 C’s of holistic reinvention can help them identify new opportunities for growth and innovation. 

Competition: As new technologies and alternative energy sources become more competitive, SEA will face the issue of dwindling gas fields, as in Thailand. Companies need to be agile and embrace new business models. 

Carbon: Carbon reduction is a big challenge. Companies need to invest in carbon capture technologies to stay competitive. Decarbonization and storage technologies are expected to become trillion-dollar markets by 2050. 

Connectivity: Technologies such as Artificial Intelligence and Internet of Things will be increasingly important to enable collaboration, data transparency, cybersecurity and ultimately, enterprise-wide resilience. Companies need to adopt an end-to-end mindset and prioritize talent.

Customers: The energy transition means new choices for customers. Companies need to build partnerships to understand their customers unique needs, especially where technical and financial barriers persist as well as when demands arise.

Culture: Creating a work environment where employees feel cared for encourages creativity and risk-taking in the workplace meaning investing in training and development programs that equip employees with the latest technologies and best practices. 

In ASEAN, most countries have pledged to a net-zero aspiration. ASEAN countries are keen on shifting to cleaner energy, but affordability is a key concern. As such, hydrocarbons remain important in the future energy mix and oil stays irreplaceable for now. Over 75% of energy consumed in Asia comes from hydrocarbons and by 2030, Asia’s demand for energy is projected to double. Singapore has been seen as a first mover in shifting to low carbon energy sources, with 95% of its electricity generated from natural gas. Although on track towards its net-zero goals, the country continues to future-proof its power system, such as constructing a hydrogen power plant. Malaysia is harnessing the commercial potential of CCUS, particularly in depleted reservoirs offshore while Indonesia has plans to develop a battery swapping program to electrify motorbikes since much of the population uses motorbikes. The country is also looking at hydrogen, nuclear and geothermal energy sources that could help to enhance its long-term energy security.

For more information, please contact Commercial Specialist, CHAN Yiu Kei.