Abstract
The latest Hong Kong Oil & Gas Report from BMI forecasts that the country will
account for just 1.28%
of Asia Pacific regional oil demand by 2013, while
making no contribution to supply. Asia Pacific
regional oil use of 21.40mn
barrels per day (b/d) in 2001 reached an estimated 25.87mn b/d in 2008. It
should average 25.79mn b/d in 2009, then rise to around 29.12mn b/d by 2013.
Regional oil production
was just under 8.41mn b/d in 2001, and averaged an
estimated 8.41mn b/d in 2008. It is set to increase to
8.74mn b/d by
2013.
In terms of natural gas, in 2008 the region consumed an estimated
440bn cubic metres (bcm) and demand
of 551bcm is targeted for 2013.
Production of an estimated 364bcm in 2008 should reach 484bcm in
2013, but
implies net imports easing from an estimated 76bcm per annum in 2008 to 67bcm
in 2013. This
is in spite of many Asian gas producers being major
exporters. Hong Kong' s share of consumption in
2008 was an estimated
0.71%, while it has no production. By 2013, its share of demand is forecast to
be
0.74%.
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 second
quarter, there has been little change to our view of oil market developments.
BMI is forecasting an
average OPEC basket price of US$51.30/bbl, with the
March gains being retained in April, before further
recovery to a possible
US$57.00 is seen by June. For 2009, we are still assuming an average OPEC
basket
price of US$52.00/bbl (-45% year-on-year). The BMI full-year
forecast implies Brent crude at
US$53.73/bbl, WTI averaging US$54.90/bbl
and Urals at US$52.66/bbl for 2009.
For the whole of 2009, the BMI
assumption for gasoline is an average US$56.89/bbl, with the price
peaking
at a forecast monthly average of US$64.75/bbl in December 2009. The overall
y-o-y fall in 2009
gasoline prices is put at 44.1%. For gasoil in 2009,
the BMI forecast is for an average price of
US$69.35/bbl, assuming a
monthly high of US$94.48/bbl in December. The full-year outturn represents
a
42.8% fall from the 2008 level. The monthly average jet fuel price is
forecast to range from US$53.75/bbl
in February to US$96.76/bbl in
December, proving an annual level of US$71.78/bbl. This compares with
US$124.95/bbl in 2008.
Hong Kong' s real GDP growth is forecast by BMI to
contract 3.6% in 2009, compared with growth of
2.5% in 2008. We are
assuming 2.2% growth in 2010, followed by 4.3% in 2011, and 4.9% in
2012/2013.
There is no upstream or refining segment, but international oil
companies (IOCs) and Chinese companies
are investing in import and
distribution facilities. Oil consumption is forecast to increase by around
2.5%
per annum to 2013, implying demand of 373,000b/d by the end of the
forecast period. Gas demand is set
to reach 4.1bcm by 2013, with all of
the fuel imported.
Between 2008 and 2018, we are forecasting an increase
in Hong Kong oil consumption of 26.82%, with
demand reaching 412,000b/d by
the end of the forecast period. Oil consumption growth slows to an
assumed
2.0% per annum towards the end of the period. Gas demand growth of 70.81%
provides an
import requirement rising to 5.4bcm by 2018. Details of BMI' s
10-year forecasts can be found in the
appendix to this report, which
provides global, regional and country-specific projections.
Hong Kong
ranks equal 11th in BMI' s updated Upstream Business Environment rating,
alongside
Singapore. The poor showing reflects the absence of domestic
hydrocarbons. The risk environment is
much more attractive than for many
Asian peers, but there are no opportunities for IOCs in the upstream
segment. Hong Kong is also ranked equal 11th in BMI' s Downstream Business
Environment rating,
alongside Thailand, reflecting its status as a very
small energy market with few investment opportunities
available. It beats
only Malaysia and Taiwan, due to the low risk profile.
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