Strong Balance Sheets Back Asia-Pacific Upstream Oil and Gas Investments

Fitch Ratings expects the generally strong balance sheets of rated companies within the Asia-Pacific exploration and production sector to provide sufficient headroom for investment, despite modest near-term production growth.

The production CAGR of 2% for 2016-2020 reflects the benefit of inorganic growth at some companies, offset by natural declines at mature fields and the Covid-19 pandemic-led disruption in 2020.

National oil companies’ focus on energy security should continue to drive upstream capex over the medium term, despite an increasing emphasis on energy transition. We expect independent upstream producers with low reserve lives or weak recent records of reserve replacement to focus on exploratory capex and M&A.

The report, Asia-Pacific Oil and Gas: Exploration and Production: Strong Balance Sheets to Support High Investments, is available at www.fitchratings.com or by clicking on the link above

Related Fitch Ratings Content: Asia-Pacific Oil and Gas: Exploration and Production