The latest Australia Oil & Gas Report from BMI forecasts that the country will account for 3.26% ofAsia Pacific regional oil demand by 2013, while providing 6.00% of supply. Asia Pacific regional oil useof 21.40mn barrels per day (b/d) in 2001 reached an estimated 25.87mn b/d in 2008. It should average25.79mn b/d in 2009, then rise to around 29.12mn b/d by 2013. Regional oil production was just under8.41mn b/d in 2001, and averaged an estimated 8.41mn b/d in 2008. It is set to increase to 8.74mn b/d by2013.
In terms of natural gas, in 2008 the region consumed an estimated 440bn cubic metres (bcm) and demandof 551bcm is targeted for 2013. Production of an estimated 364bcm in 2008 should reach 484bcm in2013, but implies net imports easing from an estimated 76bcm per annum in 2008 to 67bcm in 2013. Thisis in spite of many Asian gas producers being major exporters. Australia’s share of gas consumption in2008 was an estimated 5.86%, while its share of production is put at 13.06%. By 2013 its share of gasconsumption is forecast to be 5.36%, with the country accounting for 13.44% of supply.
In terms of the OPEC basket of crudes, the average price in Q109 was an estimated US$45.78 per barrel(bbl), down 13% from the US$52.51/bbl recorded during the previous three months. During the secondquarter, there has been little change to our view of oil market developments. BMI is forecasting anaverage OPEC basket price of US$51.30/bbl, with the March gains being retained in April, before furtherrecovery to a possible US$57.00 is seen by June. For 2009, we are still assuming an average OPEC basketprice of US$52.00/bbl (-45% year-on-year). The BMI full year forecast implies Brent crude at US$53.73,WTI averaging US$54.90/bbl and Urals at US$52.66 for 2009.
For the whole of 2009, the BMI assumption for gasoline is an average US$56.89/bbl, with the pricepeaking at a forecast monthly average of US$64.75 in December 2009. The overall y-o-y fall in 2009gasoline prices is put at 44.1%. For gasoil in 2009, the BMI forecast is for an average price ofUS$69.35/bbl, assuming a monthly high of US$94.48/bbl in December. The full-year outturn represents a42.8% fall from the 2008 level. The monthly average jet fuel price is forecast to range from US$53.75 inFebruary to US$96.76/bbl in December, proving an annual level of US$71.78/bbl. This compares withUS$124.95/bbl in 2008.
Australian real GDP is forecast by BMI to fall 1.4% for 2009, compared with growth of 1.9% in 2008.We are assuming growth of 1.2% in 2010 and 3.0% in 2011, followed by 3.4% in 2012 and 3.1% in 2013.There is no state oil industry, but a group of domestic and leading international companies is investingheavily in gas production and exports to help slow the rate of decline in Australia’s oil output. We areassuming oil and gas liquids production peaking at 580,000b/d in 2010, falling to 525,000b/d by 2013.Consumption is forecast to increase by less than 1.0% per annum to 2013, implying demand of948,000b/d by the end of the forecast period. The import requirement would therefore be approximately423,000b/d by 2013.
Between 2008 and 2018, we are forecasting a decrease in Australian oil production of 26.0%, with crudevolumes peaking in 2010 at 580,000b/d, before falling steadily to 395,000b/d by the end of the period. Oilconsumption between 2008 and 2018 is set to increase by 4.50%, with growth slowing to an assumed0.5% per annum towards the end of the period and the country using 972,000b/d by 2018. Gas productionis expected to rise rapidly, from an estimated 48bcm in 2008 to a possible 92bcm by 2018 (+93.7%).With demand growth of 29.6%, this provides export potential rising from an estimated 21.7bcm to58.6bcm, all in the form of LNG. Details of the BMI 10-year forecasts can be found in the appendix tothis report, which provides global, regional and country-specific projections.
Australia still leads BMI’s updated Upstream Business Environment rating, with its balance of strong gasproduction/export potential, world class regulatory structure and solid risk environment proving to be awinning combination. However, the gap between it and second-placed Vietnam flatters Australia as it isdue largely to the poorer country risk environment in Vietnam. Indeed, given the greater potential formore rapid growth in Vietnam, the gap should narrow over the medium term, although it is unlikely toclose until the country’s Country Risk environment improves. The country is further down the leaguetable in BMI’s Downstream Business Environment rating, reflecting its status as a mature, deregulatedand competitive energy market with limited growth potential. It now shares fifth place with South Koreaout of the 14 states, ahead of Indonesia, and could slip further down the rankings as Country Riskimproves elsewhere in the region.
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