The Challenges Facing Asia-Pacific’s Net-Zero Future in Oil & Gas
The Asia Pacific (APAC) region is navigating surging demand for energy while also grappling with decarbonization efforts. While the region’s long-term vision is a net-zero future powered by renewables, the journey there is complex and requires robust, reliable energy sources to ensure stability.
This is where the oil and gas industry, far from being sidelined, must transform itself. By decarbonizing its own production and operations, it can serve as the critical energy firming agent during the extended transition to a fully renewable grid.
Based on discussions and presentations from the APAC -Energy- Capital- Assembly- 2025,-hosted by-The-Energy-Council,-a gathering of 500+-of the region’s most influential-energy-leaders and decision-makers, this blog explores how digital tools, smart electrification and a well-trained workforce can enable APAC’s oil and gas sector to achieve this crucial transformation. Embracing carbon capture and responsible decommissioning helps ensure energy security on the path to a sustainable future.
The Weight of the Past: Challenges on the Road to a Flexible Future
The journey toward a greener future isn't easy for APAC’s oil and gas giants. One of the biggest hurdles is old infrastructure. Many companies still use systems that have been around for decades. While they’ve served well, they’re tough, if not impossible, to update for modern energy efficiency or environmental goals.
APAC has been slow to adopt these. Consequently, the region has continued to use ageing assets instead of updating them. This isn’t just about technology. It's also made worse by a cautious, risk-averse culture. New technology is usually met with doubt, needing lots of trials and tests before it’s even considered. This careful approach, while understandable, slows down vital progress that makes change even more challenging.
Another big issue is a major shortage of skilled workers. According to AON, the “green skills gap” indicates a worldwide shortage of seven million skilled workers for climate and energy projects by 2030, particularly in critical areas like solar, wind and biofuels. The APAC region lacks experts in new energy technologies such as AI, geothermal and even advanced nuclear power. For example, outside of China, there has been little to no investment in nuclear as such Southeast Asia doesn't have many nuclear engineers, so, training the current workforce isn't just a good idea; it’s crucial for adopting new technologies and keeping the industry strong long-term.
Finally, rapid industrial growth across APAC has put huge strain on existing energy grids. Old infrastructure often struggles to handle fluctuating renewable energy, or the increased power needed for electrified industrial processes. Without major investment in modernizing the grid, the region risks missing its big decarbonization goals, creating a significant roadblock in the energy transition. This highlights the critical need for a reliable, yet increasingly low-carbon, ‘firming’ capacity that oil and gas can provide.
Digital Transformation: Smarter Operations for Reliable, Low-Carbon Firming
Digital transformation is key to making operations more efficient, cutting emissions and improving manufacturing. This is essential for oil and gas to become a genuinely low-carbon firming agent. But for these efforts to truly work in APAC’s complex oil and gas world, they need a clear plan. Advanced enterprise-level software solutions are stepping in, offering powerful ways to boost performance.
Imagine knowing when equipment is about to fail, rather than reacting after it breaks down. That’s the power of predictive maintenance and system optimization, brought to life by AI. Integrated asset management platforms are leading this change. These smart tools use AI to analyze huge amounts of data, helping companies predict breakdowns, fine-tune energy use by finding waste and greatly reduce costly downtime.
For instance, an operator in Southeast Asia could save a lot on downtime and maintenance by using predictive analytics to switch from fixing problems after they happen to preventing them. By linking real-time sensor data from equipment directly into a unified asset management system, companies get a full picture of asset health, allowing them to schedule maintenance precisely and use energy more efficiently across the entire life of their assets. This operational excellence translates directly into lower carbon intensity for every barrel or cubic meter produced.
Beyond individual pieces of equipment, digital twins offer a huge leap forward. Leading providers of digital reality solutions, such as Hexagon, leverage precision reality capture and 3D modelling to empower companies to create detailed, ‘living’ digital copies of their operational assets, processes and people. These digital twins aren't static; they help simulate and optimize production, provide insights into complex supply chains and even help to effectively manage energy use. This means quicker, better decisions when markets change, easy identification of wasted energy and precise tuning of operations to cut emissions.
By combining cloud-based platforms with live operational data, these digital twins mirror the physical world. This ‘living’ capability is important for the complex world of oil and gas, letting companies test efficiency improvements, model the impact of new technologies and optimize energy flows long before anything changes in the real world. For oil and gas to serve as a reliable firming agent, its own production must be optimized to the highest degree of efficiency and lowest carbon footprint.
A big hurdle in adopting digital solutions is showing that they pay off. Here, advanced data and analytics platforms are incredibly useful. They provide sophisticated analysis tools that are vital for putting numbers to the financial and environmental benefits of digital projects. By tracking key performance indicators (KPIs) like energy consumption, emissions and operational efficiency, companies can clearly show the return on investment (ROI).
Using powerful data integration and visualization tools, companies can pull together and analyze data from many different sources across their operations. This gives them a unified view of performance, allowing for clear visuals of emission cuts, energy savings and cost efficiencies. This builds a strong case for wider adoption. Transparency is also central to demonstrating the value of decarbonized oil and gas as a firming agent as energy requirements grow.
Finally, collaboration and integration are key. Platforms that prioritize openness and interoperability make it easy to connect with other tech providers and advanced AI solutions. This helps deploy sophisticated digital solutions, including agentic AI, which can greatly boost how efficiently operations run. Open APIs and strong integration features enable advanced AI models, including agentic AI, to be built right into existing workflows. This can automate complex decision-making, precisely manage resources and more, providing the possibility to greatly improve efficiency in energy-intensive processes within the oil and gas sector, directly contributing to lower-carbon output. Indeed, this IBM report states that oil and gas executives report a 27% improvement in production uptime through AI-based predictive equipment maintenance and a 26% improvement in asset utilization optimization.
Carbon Capture and Storage (CCS): Enabling Low-Carbon Fuel and Firming
As the world pushes for net-zero emissions, CCS is gaining traction as a central technology for the oil and gas industry. CCS involves capturing carbon dioxide (CO2-) emissions from industrial processes or power generation and storing them deep underground, preventing them from entering the atmosphere. For the APAC region, where heavy industries are prevalent, CCS offers a powerful way to reduce emissions from existing, hard-to-decarbonize assets.
Advanced engineering and design solutions play a significant role in every stage of a CCS project. During the planning and design phase, integrated plant design platforms can be used to design the capture facilities, pipelines for CO2- transport and injection wells. This includes detailed engineering for the chemical processes involved in capture, ensuring safe and efficient handling of the CO2-. For geological assessment and storage site selection, geospatial intelligence platforms and subsurface modeling tools can be invaluable. They help identify and characterize suitable geological formations for CO2- storage, such as depleted oil and gas reservoirs or saline aquifers. Accurate mapping of subsurface structures, understanding fluid flow and predicting CO2- plume migration are important for safe and effective long-term storage. Advanced visualization and simulation capabilities can also model these complex underground dynamics.
By embracing CCS through open partnerships, the APAC oil and gas industry can not only lower its own emissions but also offer a critical solution for other heavy industries in the region struggling to decarbonize their operations.
Decommissioning: Responsible End-of-Life Management for a Cleaner Tomorrow
As energy infrastructure ages, decommissioning – the process of safely closing and removing old facilities – becomes an increasingly important consideration. For the oil and gas industry in APAC, this involves managing the end-of-life cycle for offshore platforms, pipelines and onshore facilities, all while minimizing environmental impact and ensuring safety. Responsible decommissioning is part of the industry’s commitment to a net-zero future, showing good stewardship of resources and environments. This will be no small feat, as estimated by a Hunton report there are 2,000 platforms to be decommissioned with the international agency stating that more than 200 offshore fields are expected to stop producing in Southeast Asia by 2030, with projected decommissioning costs of up to US$100 billion.
Specialized software for industrial lifecycle management can streamline decommissioning efforts, making them more efficient and environmentally sound. During the planning stage, advanced 3D modeling and engineering tools create an object centric digital representation of the many components that make up the asset, this extensive data can later be used to support the planning of the structures, pipes, equipment, etc., to be decommissioned. This allows engineers to meticulously plan the removal process, identify potential hazards and design safe dismantling procedures. For example, they can simulate cutting sequences for offshore platforms or plan the optimal way to clear old pipelines, reducing risks and costs.
Reality capture solutions, such as laser scanning, creates highly accurate digital representations of existing facilities, which is crucial when original ‘as-built’ documentation is often incomplete or outdated. This precise digital data supports detailed engineering for removal, material salvage and environmental remediation.
Additionally, tracking potential pollution, monitoring ecosystem health and comprehensive environmental monitoring during decommissioning is critical if we are to ensure compliance with environmental regulations during and after asset removal. By approaching decommissioning with advanced digital tools, the APAC oil and gas industry can ensure that its legacy assets are managed responsibly, leaving a cleaner environment for future energy development and maintaining credibility as a reliable energy partner.
Conclusion
Asia Pacific's journey to net-zero is complex, requiring a pragmatic approach where the oil and gas industry plays a vital, albeit transformed, role. This blog explored how decarbonized oil and gas can act as a crucial energy firming agent during the transition to a renewable energy future. We highlighted that overcoming outdated infrastructure and a skilled workforce gap through digital transformation, smart electrification and innovative solutions like carbon capture and responsible decommissioning are paramount as we move forward. Whilst embracing predictive maintenance, digital twins and advanced data analytics will optimize operations, reduce emissions and demonstrate the financial and environmental benefits of a low-carbon approach. To delve deeper into how digital solutions are enabling the energy transition to meet these challenges look out for our next blog, ‘The Indispensable Role of Decarbonized Oil and Gas in Asia Pacific’s Net-Zero Future – Part 2.’