SINGAPORE, Oct. 12, 2012 /PRNewswire/ -- The escalating demand for energy in the Asia Pacific has set off a spate of exploration activities in the oil and gas sector, creating a vast market for electrical equipment and solution suppliers to sell into. Equipment suppliers will also feel buoyed by the discovery of oil and gas resources in the region, as it encourages refineries and petrochemical companies to initiate several upstream and downstream projects.
New analysis from Frost & Sullivan ( http://www.energy.frost.com), Electrical Equipment and Solution for Oil and Gas Markets in the Asia-Pacific , finds that the market earned revenues of $614.4 million in 2011 and estimates this to reach $793.9 million in 2016 on the back of field exploration activities, oil and gas field developmental projects, demand for oil and liquid nitrogen gas for power generation, as well as industrial development.
"Currently, these gas fields use obsolete production technology, resulting in inefficient production," said Frost & Sullivan Research Analyst Avanthika Satheesh P. "Owing to the non-renewable nature of oil & gas resources, there is an urgent need for advanced and specialized techniques such as enhanced oil recovery, to extract oil from depleting resources."
Acknowledging the importance of foreign investments and sophisticated technology, the governments of countries such as Malaysia and Indonesia have announced tax waivers on equipment imported for resource extraction and development.The Indonesian government has eliminated import taxes on offshore and subsea exploration equipment in the upstream sector, while the Malaysian government announced incentives to promote the development of new oil reserves and hard-to-reach oil fields to improve domestic production. While on the one hand tax waivers benefit the electrical equipment and solutions market, carbon taxes are dampening its growth prospects by discouraging oil and gas production. The market is also pegged back by the lack of skilled labor force and dependence on the availability of resources. In oil-deficit countries, revenues are mainly generated by downstream segments and exploration activities. The market is further hindered by project delays brought on by financial crunches.