Accounting for Depletion of Oil and Gas Resources in Malaysia

Jamal Othman, Yaghoob Jafari

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

Since oil and gas are non-renewable resources, it is important to identify the extent to which they have been depleted. Such information will contribute to the formulation and evaluation of appropriate sustainable development policies. This paper provides an assessment of the changes in the availability of oil and gas resources in Malaysia by first compiling the physical balance sheet for the period 2000-2007, and then assessing the monetary balance sheets for the said resource by using the Net Present Value method. Our findings show serious reduction in the value of oil reserves from 2001 to 2005, due to changes in crude oil prices, and thereafter the depletion rates decreased. In the context of sustainable development planning, albeit in the weak sustainability sense, it will be important to ascertain if sufficient reinvestments of the estimated resource rents in related or alternative capitals are being attempted by Malaysia. For the study period, the cumulative resource rents were to the tune of RM61 billion. Through a depletion or resource rents policy, the estimated quantum may guide the identification of a reinvestment threshold (after considering needed capital investment for future development of the industry) in light of ensuring the future productive capacity of the economy at the time when the resource is exhausted.

Original languageEnglish
Pages (from-to)483-494
Number of pages12
JournalNatural Resources Research
Volume21
Issue number4
DOIs
Publication statusPublished - Dec 2012

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oil
resource
gas
sustainable development
nonrenewable resource
crude oil
sustainability
industry
policy

Keywords

  • energy economics & policy
  • environmental economics and policy
  • natural resource accounting
  • resource rents
  • Sustainability

ASJC Scopus subject areas

  • Environmental Science(all)

Cite this

Accounting for Depletion of Oil and Gas Resources in Malaysia. / Othman, Jamal; Jafari, Yaghoob.

In: Natural Resources Research, Vol. 21, No. 4, 12.2012, p. 483-494.

Research output: Contribution to journalArticle

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