Investment Opportunities Within the Offshore Space in Asia

Oil companies are again increasing their Exploration and Production (E&P) spending, after a temporary dip in 2009 following the financial crisis. Existing oil fields show a decline rate of 4.5% or more. This needs to be replaced by new production and enhanced oil recovery. Higher spending among the oil companies benefits the offshore companies. Although the overall picture looks strong for the offshore industry, companies and sub-sectors will, to varying degrees, benefit from the increasing activity in the E&P sector. We see good investment opportunities within several niche players in Asia, such as ASL Marine, Swiber and Ezion. With oil prices at the current level driven by the decline in production from existing fields, we expect a continued strong appetite for offshore companies from Asian and international investors.

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