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Southeast Asia’s Oil And Gas Output May Never Recover To Pre-COVID Levels

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The Covid-19 pandemic has marked the end of an era for Southeast Asia’s combined oil and gas production, pushing the region’s output in 2021 to below 5 million barrels of oil equivalent per day (boepd) for the first time since 1998, a threshold that is not likely to be exceeded again in the future despite new project start-ups in coming years, a Rystad Energy analysis shows.

Daily average hydrocarbon production tumbled to 4.86 million boepd in 2021, down from 5.06 million boepd in 2020, and a massive 12% drop compared to the pre-pandemic volumes of 5.5 million boepd in 2019, Rystad Energy data shows.

Operators have struggled to regain production losses triggered by the pandemic as operators slowed down activity levels amid an unprecedented disruption in oil markets. The decline is projected to continue into the middle of the decade. Although volumes will remain stable in 2022, production will drop an additional 10% by 2025 to around 4.3 million boepd versus current levels.

“Liquids production in Southeast Asia has been on the decline for almost 20 years due to a lack of discoveries and project sanctioning activities in the region. While new government incentives may help, the region looks set to experience declining production levels well into the future,” says Prateek Pandey, upstream vice president

By contrast, natural gas production in the region stayed steady between 2009 and 2019, at around 20.8 billion cubic feet per day (Bcfd). Despite expectations of a rise in gas sales volume that would counter the 8% fall in production in 2020, volumes are expected to be down around 2% this year compared to 2020, at about 19 Bcfd. This is primarily due to falling production at mature legacy projects including Mahakam, MLNG Dua and MLNG Satu PSCs, Yetagun.

The share of volume from projects under development and existing commercial discoveries are substantial and reflect the region’s timely execution of projects. Several projects were successfully brought onstream in 2021, including the highly anticipated Rotan field, utilizing PFLNG Dua, which started in March, making Petronas the only operator globally to produce LNG from two floating facilities. In Indonesia, Eni completed a timely development, with Merakes achieving its first gas production in April 2021

Related: Energy Groups Call For Government Intervention As Power Prices Skyrocket

However, despite these successes, Southeast Asia is still plagued by delays and stalled projects. In Indonesia, a recovery in gas production has been further delayed after the two significant developments -Tangguh LNG T3 and Jambaran Tiung-Biru Unitisation (JTB) – were postponed until 2022.

What the future holds

For most of Southeast Asia, over 60% of output comes from mature blocks – fields producing more than 50% of its resource. Volumes from such blocks are likely to see a consistent decline over the next few years, with an estimated 60% of production by 2030 likely coming from projects currently at the pre-FID (final investment decision) stage. Consequently, the driving force behind the region’s upstream outlook will be the sanctioning of new developments.

2020 was a nightmare year for regional sanctioning activity, with only around 300 million barrels of oil equivalent (boe) of resources from six assets reaching FIDs. As operators tried to move forward in 2021, the region has seen more than ten projects secure FIDs, with around 750 million boe of reserves and some $3 billion in greenfield investment, with Malaysia accounting for 85% of the total.

Sanctioning activities in 2022 are likely to remain at similar levels, with FIDs planned on around 800 million boe of resources in the region, of which 60% are in Indonesia and over 35% in Malaysia. Projects operated by majors and NOCs are likely to dominate in Malaysia, whereas regional players and E&P companies will primarily drive Indonesian developments.

However, planned FID projects in 2022 may still face challenges in securing the final approval. Indonesia’s domestic gas price regulation remains a concern for most large gas developments in the pipeline. Although incentives are being discussed for blocks such as Kasuri, it is still one of the factors that could further delay progress. The planned developments from production sharing contracts (PSC) due for current contract expiry in the near term are also at risk unless host country governments initiate early discussions on potential extensions.

Southeast Asia is unlikely to see a substantial increase in spending in 2022, with investments projected to be in the range of $15 billion to $20 billion across the year. Investments will likely be driven by increased drilling activity in mature blocks in Indonesia and Thailand, as NOCs take the reins and focus on top-producing blocks.

Around 360 million boe in resources have been discovered at eight fields as of November 2021, surpassing 2020 volumes by 40%. About 78% of total discovered resources this year in Southeast Asia are gas or gas condensate, while the remainder is oil. About 84% come from shallow waters, with around 86% at NOC-operated blocks. In line with the trend, over 90% of volume in the region in 2021 has been discovered in the Miocene-Clastic formation.

By Rystad Energy

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Teladoc Tumbled 38% After Big First-Quarter Loss. Is It Just a Pandemic Play?

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After pandemic drop, Canada’s detention of immigrants rises again By Reuters

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© Reuters. FILE PHOTO: Two closed Canadian border checkpoints are seen after it was announced that the border would close to “non-essential traffic” to combat the spread of novel coronavirus disease (COVID-19) at the U.S.-Canada border crossing at the Thousand Isla

By Anna Mehler Paperny

TORONTO (Reuters) – Canada is locking up more people in immigration detention without charge after the numbers fell during the pandemic, government data obtained by Reuters shows.

Authorities cite an overall rise in foreign travelers amid easing restrictions but lawyers say their detained clients came to Canada years ago.

Canada held 206 people in immigration detention as of March 1, 2022 – a 28% increase compared with March 1 of the previous year. Immigration detainees have not been charged with crimes in Canada and 68% of detainees as of March 1 were locked up because Canada Border Services Agency (CBSA) fears they are “unlikely to appear” at an immigration hearing, according to the data.

The rise puts Canada at odds with Amnesty International and other human rights groups that have urged Ottawa to end its use of indefinite immigration detention, noting CBSA has used factors such as a person’s mental illness as reason to detain them.

A CBSA spokesperson told Reuters that “when the number of entries (to Canada) goes up, an increase in detention is to be expected.” CBSA has said in the past it uses detention as a last resort.

A lawyer told Reuters her detained clients have been in Canada for years.

In the United Kingdom, too, immigration detention levels rose last year after dropping earlier in the pandemic, according to government statistics. Unlike Canada, the United States and Australia, European Union member states have limits on immigration detention and those limits cannot exceed six months.

The rise in detentions puts people at risk of contracting COVID-19 in harsh congregate settings, refugee lawyers say.

Julia Sande, Human Rights Law and Policy Campaigner with Amnesty, called the increase in detentions “disappointing but not surprising,” although she was reluctant to draw conclusions from limited data.

The number of immigration detainees in Canada dropped early in the pandemic, from a daily average of 301 in the fourth quarter (January through March) of 2019-20 to 126 in the first quarter (April through June) of 2020-21.

FEW NO-SHOWS AS DETENTIONS DROPPED

Detaining fewer people did not result in a significant increase in no-shows at immigration hearings – the most common reason for detention, according to Immigration and Refugee Board data.

The average number of no-shows as a percentage of admissibility hearings was about 5.5% in 2021, according to that data, compared to about 5.9% in 2019.

No-shows rose as high as 16% in October 2020, but a spokesperson for the Immigration and Refugee Board said this was due to people not receiving notifications when their hearings resumed after a pause in the pandemic.

Refugee lawyer Andrew Brouwer said the decline in detention earlier in the pandemic shows Canada does not need to lock up as many non-citizens.

“We didn’t see a bunch of no-shows. We didn’t see the sky fall … It for sure shows that the system can operate without throwing people in jail,” Brouwer said.

He added that detainees face harsh pandemic conditions in provincial jails – including extended lockdowns, sometimes with three people in a cell for 23 hours a day.

Refugee lawyer Swathi Sekhar said CBSA officials and the Immigration and Refugee Board members reviewing detentions took the risk of COVID-19 into account when deciding whether someone should be detained earlier in the pandemic but are doing so less now.

“Their position is that COVID is not a factor that should weigh in favor of release,” she said.

“We also see very, very perverse findings … [decision-makers] outright saying that individuals are going to be safer in jail.”

The Immigration and Refugee Board did not immediately respond to a Reuters request for comment.

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Nasdaq futures rise as market attempts comeback from April sell-off, Meta shares soar

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Stock futures rose in overnight trading as the market shook off the April sell-off and investors reacted positively to earnings from Meta Platforms.

Futures on the Dow Jones Industrial Average added 70 points or 0.2%. S&P 500 futures gained 0.7% and Nasdaq 100 futures jumped 1.2%.

The moves came as shares of Meta surged more than 18% after hours following a beat on earnings but a miss on revenue, a sign that investors may see signs of relief in the beaten-up tech sector. Shares were down 48% on the year heading into the results.

Meanwhile, shares of Qualcomm gained 5.6% in extended trading on the back of strong earnings while PayPal rose 5% despite issuing weak guidance for the second quarter.

“I think a lot of people want to believe that earnings are going to pull us out of this, but earnings are not what got us into this,” SoFi’s Liz Young told CNBC’s “Closing Bell: Overtime” on Wednesday. “… But the reality is there are so many macro headwinds still in front of us in the next 60 days that the market is just hard to impress.”

The after-hour activity followed a volatile regular trading session that saw the Nasdaq Composite stoop to its lowest level in 2022, as stocks looked to bounce back from a tech-led April sell-off. The index is down more than 12% since the start of April.

In Wednesday’s regular trading, the tech-heavy Nasdaq ended at 12,488.93, after rising to 1.7% at session highs. The Dow Jones Industrial Average rose 61.75 points, or 0.2%, to 33,301.93 propped up by gains from Visa and Microsoft, while the S&P 500 added 0.2% to 4,183.96.

Investors await big tech earnings on Thursday from Apple, Amazon and Twitter, along with results from Robinhood. Jobless claims are also due out Thursday.

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