Brunei's Local News - Brudirect.com

Bandar Seri Begawan - Asean energy ministers have approved a draft of the Asean Petroleum Security Agreement (APSA), which will require the oil producers in the region, including Brunei, to sell their oil at "friendship prices" to the region's consuming countries in the event of a shortage, the Philippine Daily Inquirer reported.

The agreement, which would be finalised and signed in December during the Asean Summit in Thailand, is for the region's oil producers —Vietnam, Indonesia, Malaysia and Brunei — to sell their oil at friendship prices to the consuming nations in the region if they face a 10 per cent shortfall in their needs.

The approval of the draft was an important step in ensuring energy security in the region, said the Philippine government's Energy Secretary, Angelo Reyes, adding that the draft went through more than 10 years of deliberation, said the Philippine Daily Inquirer.

The amended agreement would replace the current agreement, which has been in place since

1986 and stipulates a 20 per cent shortage trigger.

The APSA and its attachment, the Coordinated Emergency Response Measures, will provide guidelines to govern a timely and coordinated response to oil supply emergencies, Reyes said.

During the meeting, however, Reyes said Indonesia, as a member of the Organisation of Petroleum Exporting Countries, assured the group that there was still an ample supply of crude oil in the world market.

Asean's energy consumption is expected to reach 400 million tonnes of oil equivalent by 2020 and 782 million tons of

Asean energy ministers also discussed the need to develop new sources of energy to feed the growing demand and said the region should become the Asian hub for biofuels. The organisation will undertake a study to make sure such developments do not have a negative impact of the food needs of the region, the Inquirer added.

The ministers had previously agreed on a Trans-Asean Gas Pipeline and the Asean Power Grid Project to promote energy stability and security in the region.

However, it was reported that plans for an Asean natural gas grid have been pushed back by up to a decade due to delays in developing an Indonesian field, the biggest in the region.

Offshore East Natuna is not expected to come into production before 2016, further hindering a regional integration plan that had been progressing very slowly.

Natuna, discovered in 1973, holds hydrocarbon reserves of 46 trillion cubic feet, and could be in production for more than 30 years. (HH M1) -- Courtesy of The Brunei Times