Abstract
The latest India Oil & Gas Report from BMI forecasts that the country will
account for 12.79% of Asia
Pacific regional oil demand by 2013, while
providing 10.58% of 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 486bcm in
2013, but implies net imports easing from an estimated 76bcm per annum in 2008
to 65bcm in 2013. This
is in spite of many Asian gas producers being major
exporters. India' s share of gas consumption in 2008
was an estimated
9.77%, while its share of production is put at 9.07%. By 2013 its share of
gas
consumption is forecast to be 10.43%, with the country accounting for
10.71% 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 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,
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 price
peaking at a forecast
monthly average of US$64.75 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 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.
Indian real GDP growth is now forecast by BMI at 5.0% for 2009, down from 6.3%
in 2008. We are
assuming 5.0% growth in 2010, 6.4% in 2011, followed by
7.0% in 2012/2013. State oil firm Oil &
Natural Gas Corporation (ONGC) is
charged with maximising domestic oil production, which in 2008
averaged an
estimated 785,000b/d. Thanks to its efforts and those of UK-based Cairn
Energy, we see
production peaking at around 950,000b/d by 2011. Oil
consumption is forecast to increase by 4-5% per
annum to 2013, implying
demand of 3.72mn b/d by 2013. The import requirement would therefore be
approximately 2.80mn b/d by the end of the forecast period. Gas consumption is
set to rise from an
estimated 43bcm in 2008 to 57bcm, with domestic supply
up from an estimated 33bcm in 2008 to at least
52bcm by 2013.
Between
2008 and 2018, we are forecasting an increase in Indian oil production of
9.55%, with crude
volumes peaking in 2011 at 950,000b/d, then falling
steadily to 860,000b/d in 2018. Oil consumption
between 2008 and 2018 is
set to increase by 48.66%, with growth slowing to an assumed 2.0% per
annum
towards the end of the period and the country using 4.27mn b/d by
2018. Gas production is expected to
rise from around 33bcm in 2008 to a
possible 65bcm by 2018 (+97.0%). With demand growth of 70.5%,
India is
likely to be importing up to 10bcm per annum of gas by the end of the period,
largely in the form
of LNG. Details of BMI' s 10-year forecasts can be
found in the appendix to this report, which provides
global, regional and
country-specific projections.
India now ranks third, behind Vietnam, in
BMI' s updated Upstream Business Environment rating, with a
strong resource
position being offset somewhat by extensive state involvement, a limited
competitive
landscape and only a moderate risk environment. The country
sits well ahead of Pakistan and Malaysia,
but 13 points behind Australia.
The country is now equal first with China in BMI' s updated Downstream
Business Environment rating, reflecting its status as a high-growth energy
market with strongly positive
population and demand trends, plus a low
level of retail site intensity. It is four points ahead of Singapore,
with
scope to pull still further away from the more mature Asian energy economy.
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