Southeast Asia’s Deepwater Oil & Gas Exploration Resurgence Can Produce Needed Resources, but Economics are Marginal, According to Wood MacKenzie

     Wood MacKenzie’s Angus Rodger and Munish Kumar recently summarized new developments in deepwater oil & gas exploration in Southeast Asia. I occasionally post about new discoveries and have included some from the region, including a recent large natural gas and condensate find in offshore Indonesia’s Kutei Basin.

     The WoodMac analysts note that Southeast Asia had a deepwater 1.0 period when deepwater exploration was new to the area, and reserves were found, followed by a period of few discoveries. Now, they say a new period of discoveries has begun.

“The first wave of Asian deepwater projects (‘Deepwater 1.0’) took place between 2008 and 2017, during which approximately 23 tcf of gas (4 bnboe) was developed. This period saw the first-ever deepwater gas projects in Malaysia, India and China. Since then, activity has been sporadic, constrained by commercial, strategic, technical and regulatory challenges.”

     They note that about 28TCF is ready to be monetized in these plays, but economics will likely be tougher than the Deepwater 1.0 period. They do, however, cite a good investment environment and geopolitical stability in the area to help develop these reserves, which are needed, especially with ongoing supply disruptions in the Middle East, which have been hurting Asian economies.

     Despite the potential value of these reserves and the need to secure more energy, as the graph below shows, achieving economic success will be difficult, and margins can be impacted by unforeseen events like cost overruns and delays.

“Despite the material resource volumes, the economics of Deepwater 2.0 projects are exceptionally fragile. Wood Mackenzie data shows that achieving a targeted 15% internal rate of return (IRR) leaves little margin for cost overruns, schedule delays or fiscal slippage.”

"Success will depend on three critical factors: accelerating development timelines, leveraging brownfield infrastructure and maintaining disciplined project execution. Those that secure infrastructure early, lock in service capacity and move decisively will capture value. Those that cannot risk seeing project value erode rapidly."

    

   

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Southeast Asia faces its deepwater gas 2.0 moment: We explore how operators can navigate fragile economics to unlock 28 tcf of critical new deepwater gas supply across the region. 23 April 2026. Angus Rodger and Munish Kumar. Wood MacKenzie. Southeast Asia faces its deepwater gas 2.0 moment | Wood Mackenzie