Malaysia Oil and Gas Report Q3 2008 - www.companiesandmarkets.com adds new report.

2008-09-12 23:51:02 - Malaysia Oil and Gas Report Q3 2008 - a new market research report on www.companiesandmarkets.com

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The latest Malaysia Oil & Gas Report from BMI forecasts that the country will account for 1.96% of Asia Pacific regional oil demand by 2012, while providing 8.37% of supply. Asia Pacific regional oil use of 21.4mn barrels per day (b/d) in 2001 reached an estimated 25.56mn b/d in 2007. It should increase to 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, representing 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. Malaysia’s share of gas consumption in 2007 was an estimated 9.41%, while its share of production was 19.48%.

By 2011, its share of gas consumption is forecast to be 7.61%, with the country accounting for 17.15% 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 BMI’s 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. Malaysian real GDP growth is forecast by BMI at 5.5% for 2008, down from the estimated 2007 level of 6.3%. We are assuming 5.6% growth in 2009/10, followed by 5.4% in 2011/12. State-owned Petronas operates in partnership with various international oil companies (IOCs) under a production sharing system that we believe will result in oil production of 720,000b/d by 2012. Consumption is forecast to rise by up to 2% per annum to 2012, implying demand of 576,000b/d by 2012.

Malaysia’s gas exports are set to rise from an estimated 28bcm in 2007 to 35bcm, with production climbing from 69bcm to 80bcm between 2007 and 2012. Between 2007 and 2018, we are forecasting a reduction in Malaysia oil production of almost 15%, with crude volumes falling steadily to 638,000b/d in 2018. Oil consumption between 2007 and 2018 is set to increase by 26.8%, with growth slowing to an assumed 2.0% per annum towards the end of the period and the country using 652,000b/d by 2018. Gas production is expected to rise from around 69bcm in 2007 to a possible 100bcm by 2017-2018 (+45%). With demand growth of 24%, this provides an export capability peaking at 50bcm in 2017, 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.

Malaysia ranks seventh in BMI’s newly revised Upstream Business Environment rating, reflecting a strong resource position and a moderate gas output growth outlook, being offset by extensive state involvement. The country sits just ahead of Thailand and just behind China – and in a relatively strong position to defend its position. The country ranks a lowly 12th in BMI’s newly revised Downstream Business Environment rating, reflecting its limited refinery capacity expansion plans, moderate oil and gas demand growth outlook and relatively high level of retail site intensity.

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