This edition is part of the related analysis on the impact of Covid-19 on energy in ASEAN.

Further detail, please access:

https://accept.aseanenergy.org/covid-19/.

DOI: 10.5072/zenodo.651024

To update the readers on how the COVID-19 pandemic hits the As depicted in the wordcloud* generated from our archived news
energy sector, and how the recovery road will affect the energy about Oil and Gas from January to July 2020 (Figure 1a), popular
sector in ASEAN, ASEAN Centre for Energy (ACE) releases several words such as demand, prices, and power coined in the news.
Meanwhile, the word covid was not too visible, because only
energy insights highlighting the impact of COVID-19 in the ASEAN
about 25% of the news was related to COVID-19. However, when
Energy Sector from our archived news. In this insight, we highlight
categorising each word into a negative or positive tone using
the impact of COVID-19 in the ASEAN Oil and Gas sector. sentiment analysis**, the words outbreak and virus became
obvious, among other text such as decline, fall, and cheap
The global oil market was striving against the plunging oil demand (Figure 1b).
and crashed oil price due to the spread of coronavirus which
stroke many aspects during that time. As oil and gas are
accountable as the largest energy supply and energy consumption
in ASEAN, respectively 60% and 55% in 2017 (ASEAN Energy
Database System), and several member states rely their revenue
on oil and gas, the impact of COVID-19 pandemic on this sector
in ASEAN is inevitable.

Policy-makers and businesses are trying to take adequate

measures to overcome the hard time during the pandemic that hit
the oil and gas industry. The recent virus curb helped the situation
to be rebounded, which provides optimism outlook as stimulant
Figure 1 The word cloud in (a-left) general, and (b-right) sentiment
to rearrange the oil and gas strategy in the future.

Turbulent times in oil and gas history
The year 2020 began optimistically, with several new projects
commencing across ASEAN, such as the onshore exploration in
Myanmar, the LNG-fired power plant in Vietnam, and the opening
of oil and gas projects in Indonesia. The significant oil and gas
investments were still considered attractive by Thailand and
several investors in Indonesia. Malaysia, in the other hand, even
aimed for a foreign opportunity. But not long after, the
coronavirus concerns started to linger at the end of February.
The imposed movement restrictions for containing the virus
spread contributed to the drop of fuel price and demand. It also
affected and slowed down several oil projects, including an
offshore oil field production and a power plant construction in
Cambodia. Another delay of oil refinery and exploration
happened in the Philippines as the country continues to grapple
with the pandemic bites. Furthermore, the current crisis might act
as a catalyst for the energy transition, thus, creating more threat
ahead to the oil and gas industry.

1
 Figure 2 Sentiment words per date on news from January to June 2020

Figure 3 West Texas Intermediate oil price on January-June 2020 (data source: markets insider)

Our previous Q1 energy insight has reported this bleak period

in the oil and gas industry, with the plummeted demand and
price. However, some countries took advantage of the lower
oil price, and the optimism continued to grow with recovery
measurement.
This shifted trend and situation around oil and gas sector can
be seen in Figure 2 where we plotted the sentiment score per
date throughout the first half of 2020. The graph is somewhat
in line with the curve of the West Texas Intermediate (WTI) oil
price (Figure 3), which reached a minus point on 20 April for
the first time in history.
“The winding road as an impact of pandemic gives
pressure in the oil and gas market. It became a serious
challenge to survive amid unfavourable circumstances,
such as putting off some projects, cutting output, and
tightening financial policy. The current crisis might also
act as an energy transition catalyst, thus the oil and gas
sector must be able to adapt to provide clean energy.
Regardless, there is still optimism when the easing of
containment measures occurred in many countries
which bring some relief in the recovery time”

2
The road to recovery
The oil and gas news has gradually been positive in general since
the end of May. If we generate the sentiment word cloud for news
content dated only in May and June, the word recovery caught
our attention immediately (Figure 4).
Figure 4 Sentiment word cloud of news on May-June
2020 highlighting on recovery
Indeed, the recent lockdown easing in ASEAN countries provides
some relief for the oil and gas industry players. As a result of the
new normal, the fuel was progressively back in demand.
Indonesia, for example, has observed the increase in fuel sales,
although it is not yet returned to the pre-outbreak level. The
situation was also supported by the slightly recovering prices
after Organization of the Petroleum Exporting Countries (OPEC)
and other oil-producing countries cut their output between May
and June. Singapore refineries also reduced 25% production
from pre-COVID-19 levels.
Decision-makers in the region continue adapting recovery
initiatives to mitigate the impact of COVID-19 outbreak. To boost
the manufacturing sector, Indonesia is giving subsidised gas
prices without affecting gas producers’ income. This incentive
received positive responses, and almost 20 companies have
signed deals to receive this 25% price reduction for 5 years. The
same stimulus package was also requested by the manufacturing
firms in Malaysia towards their energy providers, to support
them in overcoming the economic downturn.
Furthermore, the abundance of supplies caused the government
of Indonesia to stop the fuel import permits and ask the firms to
prioritise buying domestic diesel. The authority also let
Pertamina, a state-owned oil and natural gas enterprise, to sell
unblended diesel without palm-based fuel this year.
A different policy is taken by the Philippines by temporarily
increasing tariffs on imported oil. On the other hand, the country
also takes advantage of cheap global oil prices by stockpiling, as
a way to protect from the shock of rising prices after the crisis
later.
In facing the low oil price, ASEAN energy companies sustained
their conditions by tightening their financial policies such as
cutting investment and disposing of money assets. Similarly in
Indonesia, where the country lowering its oil and gas investment
target this year and deploying survival strategies, including cost
efficiency and administrative streamlining.
Persevering an optimistic outlook
Despite economic pressure and less profit, several countries
performed necessary attempts in assuring their energy security.
In upstream activities, Indonesia opened a new oil and gas
exploration and deployed a gasification megaproject to support
the domestic consumption of methanol. Myanmar was also
encouraged to build new high-quality oil refineries to reduce
the import reliance and fulfil the local demand for oil products.
Meanwhile, Malaysia also shows confidence to adapt to the
market slowdown by maintaining its continuity of gas
production volume where industries instil new safety
regulations and stricter operations brought about by the
pandemic.
The oil and gas sector has witnessed an unprecedented shock
in 2020. However, as shown in the sentiment graph and word
cloud, the signs of regrowth seen when approaching the second
half of the year. By undertaking relevant recovery policies, the
ASEAN member states can continue to cope, and tackle the
robust challenges in the short to long-term resulted by the
COVID-19 pandemic.
Footnote:
* Although this edition covers Q2 2020, we collected 214 content from our
archived news written in English with Oil and Gas tag from 1 January to 30
June 2020, to understand more the shifted trends in this industry. After cleaning
up the data by removing numbers and the most common and meaningless
words (also called stopwords) from the text, we ended up with 7111 single
words. Three lexicons were used for removing English stopwords: SMART,
snowball, and onix. The least frequent terms were dropped from the word cloud.
** Lexicon Bing was used for Sentiment Analysis.
This edition is supported by the ASEAN Climate
Change and Energy Project (ACCEPT).
Energy Insight is an inside analysis based on the collected news for certain
period of time, through the ASEAN Energy News Clipping of the
ASEAN Energy Database System (AEDS). This edition covers the period
of 1 May-30 June 2020.
ASEAN Centre for Energy
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