A record number of firms are flying the flag for Scotland at the Oil and Gas Asia show in Malaysia this week. South-east Asia is fast becoming a strategically important market says Neil McInnes, who looks after the region for Scottish Development International (SDI)
The size and scale of south-east Asia suggests it has the potential to one day rival some of the other leading markets in Asia Pacific.
Together, the 10 countries in the Association of South East Asian Nations (ASEAN) represent Asia’s third largest economy – and the world’s seventh largest – with a combined GDP (gross domestic product) of £1.6trillion.
Their total population of more than 600million is bigger than both the US and the EU.
Later this year, the region it will become the world’s largest single market as the countries seek to work more collectively to stimulate economic growth and prosperity.
Energy is going to play an important part in achieving those ambitions, with demand increasing substantially as a result of increased manufacturing and urbanisation.
Scotland has the potential to capitalise on these trends, especially given the region’s rich history of oil and gas production.
Malaysia’s first oil was drilled off the coast of Sarawak in 1910 but Indonesia is now the largest producer in the region, producing 800,000 barrels of oil equivalent per day – on a par with the North Sea.
Singapore has established itself as the regional logistics and services hub, with many of the industry’s leading players using it as a regional HQ for their operations given its strategic location and ease of doing business.
Together, the three markets of Singapore, Malaysia and Indonesia represent the golden-triangle of the oil and gas industry within south-east Asia but there is increasing activity in other markets from deepwater drilling in Brunei to new licenses being issued in the highly undeveloped market of Myanmar as well as the Gulf of Thailand.
There are real opportunities for Scottish companies with experience of operating in the North Sea to provide the technology and experience required to unlock the potential within these markets.
While ASEAN may offer some specific challenge for Scottish firms, it could also some of the biggest rewards.
Traditional markets like Singapore and Malaysia can offer companies a stepping stone into other Asia markets.
We are expanding our team at SDI in Singapore to help companies identify the best opportunities…and help them navigate through some of the barriers or challenges they may face.
By Neil McInnes