The Asean region is at “the most critical juncture” in terms of economic recovery and growth as it enters an era “significantly affected” by the Covid-19 pandemic, according to Petronas chief executive Tengku Muhammad Taufik.
The 10-member Asean bloc comprises Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
“Amidst these challenges, the demands upon the energy industry are also greater than ever," the head of the Malaysian state oil and gas giant told the Asean Energy Business Forum 2020 on Wednesday.
"Not only is the industry part of the engine to drive economic recovery and employment, but it is crucial at this moment that the reliable, sustainable and affordable supply of energy be provided to the people and various nations — to keep hospitals running and businesses going,” he said.
The effects of the coronavirus pandemic on the energy sector — particularly the oil and gas sector — cannot be overstated, said Tengku Muhammad Taufik, citing the International Energy Agency (IEA) forecast that 2020 will be a year that sees a 5% drop in energy demand, a 7% decline in energy-related carbon dioxide emissions and an 18% tumble in energy investments.
However, despite the short-term uncertainty, he said now is the time to shape and chart the recovery process.
Southeast Asia is currently home to 10% of the global population and the region’s overall energy demand has risen by more than 80% since 2000, he said — again referencing IEA figures.
Current energy demand levels on a per capita basis in Southeast Asia are still relatively low by international comparisons, which means there is “enormous” scope for further demand growth, said Tengku Muhammad Taufik.
However, the region then faces the “perennial question” of how to best accommodate higher levels of economic activity and energy consumption without provoking a deterioration in reliability and affordability of energy services or aggravating the environmental consequences of energy use.
“Concurrently, the push for the low-carbon agenda to support the energy transition is becoming more widespread and pervasive,” said Tengku Muhammad Taufik.
Addressing the forum on Wednesday, he said that rapid global technology developments — in particular the falling cost of renewable energy technologies — are combining with the region’s own policy goals to open up new opportunities for Southeast Asia to shape its own energy future.
This will require co-ordinated and collective action from all stakeholders. Key to this pathway will be the right policy support and incentives to lay the initial groundwork, he said.
“Government support and intervention in developing and implementing supportive energy policies and business-friendly regulations are pivotal for businesses to survive and thrive as the energy landscape continues its monumental shift,” added Tengku Muhammad Taufik.
“Additionally, governments have an influence over the flow of energy investments and also set the pace and direction of progress towards more integrated regional power markets.”