2008-09-12 23:55:01 -
Indonesia Oil and Gas Report Q3 2008 - a new market research report on www.companiesandmarkets.com www.companiesandmarkets.com/Summary-Market-Report/Indonesia-Oil- ..
The latest Indonesia Oil & Gas Report from BMI forecasts that the country will account for 4.07% of Asia Pacific regional oil demand by 2012, while providing 11.10% of supply. Asia Pacific regional oil use increased from 21.4mn barrels per day (b/d) in 2001 to an estimated 25.56mn b/d in 2007. It should rise to around 29.38mn b/d by 2012.
In terms of natural gas, the region in 2007 consumed an estimated 436bn cubic metres (bcm), with demand of 591bcm targeted for 2012 growth of 35.57% between 2007 and 2012. Production of an estimated 354bcm in 2007 should reach 455bcm in 2012, but implies net imports rising from an estimated 82bcm per annum to 136bcm.
Indonesias share of gas consumption in 2007 was an estimated 9.54%, while its share of production was 21.45%. By 2012, its share of gas consumption is forecast to be 8.98%, with the country accounting for 19.51% of supply. In Q108, we estimate that the OPEC basket price averaged US$92.64 per barrel (/bbl) up around 9% from the Q407 level. The OPEC basket price had exceeded US$102 by the middle of March, slipping back towards US$96/bbl later in the month. The estimated Q108 average prices for the main marker blends are now US$96.54 for Brent, US$97.31 for WTI and US$93.44/bbl for Russian Urals (Mediterranean delivery). Our projections for 2008 as a whole are revised upwards from BMIs last quarterly report. We are now assuming an OPEC basket price average of US$81/bbl for 2008, compared with the US$74 estimate provided by our last quarterly report.
Based on recent price differentials, this implies Brent at US$84.71/bbl, WTI averaging US$85.63/bbl and Urals at US$81.88/bbl. Indonesian real GDP growth is forecast by BMI at 6.1% for 2008, down from an estimated 6.3% in 2007. We foresee 5.7% growth in 2009, 5.6% in 2010, 5.7% in 2011 and 5.6% in 2012. Efforts are being made by the Indonesian authorities to encourage investment in new oil and gas supply, in order to stem the decline in production. Numerous international oil companies (IOCs) work in partnership with national oil company Pertamina and the state. We are estimating oil and gas liquids production of no more than 955,000b/d by 2012, although the country is expected to pump 975,000b/d in 2008. Consumption is forecast to increase by around 2.5% per annum to 2012.
Our estimates imply demand of 1.20mn b/d by the end of the forecast period. The import requirement would therefore be approximately 241,000b/d by 2012. Gas production rising to an estimated 91bcm by 2012 should provide end-period export potential of 38bcm, with supply risk on the downside. Between 2007 and 2018, we are forecasting a reduction in Indonesian oil production of almost 22%, with crude volumes falling steadily to 800,000b/d in 2018. Oil consumption between 2007 and 2018 is set to increase by 27.4%, with growth slowing to an estimated 2.0% per annum towards the end of the period and the country using 1.35mn b/d by 2018. Gas production is expected to rise from around 76bcm in 2007 to a possible 92bcm by 2018 (+21%). With demand growth of 49%, this provides an export capability peaking at almost 40bcm in 2011, before falling below 30bcm by 2018 largely in the form of LNG.
Details of the new BMI 10-year forecasts can be found in the Appendix of this report, which provides global, regional and country-specific projections. Indonesia ranks ninth in BMIs updated Upstream Business Environment rating, with a relatively strong resource position offset by poor output growth prospects, a deteriorating reserves-to-production ratio and extensive state involvement. The country sits just ahead of Japan and just behind Thailand with little risk from any of the countries below. It ranks equal fifth in BMIs updated Downstream Business Environment rating, reflecting its low level of retail site intensity, refinery capacity expansion plans and reasonable oil and gas demand growth outlook. It shares the slot with South Korea and Australia, but has the longer-term potential to move ahead of both.
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