Abstract
The latest Indonesia Oil & Gas Report from BMI forecasts that the country will
account for 4.31% of
Asia Pacific regional oil demand by 2013, while
providing 10.98% 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. Indonesia’s share of gas consumption in
2008 was an
estimated 7.99%, while its share of production is put at 19.24%. By 2013 its
share of gas
consumption is forecast to be 7.58%, with the country
accounting for 17.92% 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.
Indonesian real GDP growth is forecast by BMI at 3.6% for 2009,
down from 6.1% in 2008. We foresee
4.5% growth in 2010, 4.9% in 2011, 5.1%
in 2012, followed by 5.0% in 2013. 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
960,000b/d by 2013, although the country is expected to pump
990,000b/d in 2009. Consumption is
forecast to increase by 2.0-2.5% per
annum to 2013. Our estimates imply demand of 1.26mn b/d by the
end of the
forecast period. The import requirement would therefore be approximately
296,000b/d by
2013. Gas production rising to an estimated 87bcm by 2013
should provide end-period export potential of
45.3bcm, with supply risk on
the downside.
Between 2008 and 2018 we are forecasting a reduction in
Indonesian oil production of 17.8%, with crude
volumes falling steadily to
810,000b/d in 2018. Oil consumption between 2008 and 2018 is set to
increase
by 19.6%, with growth slowing to an assumed 2.0% per annum
towards the end of the period and the
country using 1.39mn b/d by 2018.
Gas production is expected to rise from around 70bcm in 2008 to a
peak of
91bcm by 2012, before slipping back to 85bcm by 2018. With demand growth of
35.0%, this
provides an export capability peaking at 50.5bcm in 2012,
before falling to 34.8bcm by 2016, largely in
the form of liquefied
natural gas (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.
Indonesia still ranks ninth in BMI’s
updated Upstream Business Environment rating, with a relatively
strong
resource position offset by poor output growth prospects, a deteriorating
reserves-to-production
ratio (RPR) and extensive state involvement. The
country sits comfortably ahead of Japan and just behind
Thailand, with
little risk from any of the countries below. The country ranks seventh in
BMI’s 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 is just ahead of Vietnam and
the
Philippines, and has the longer-term potential to challenge South
Korea and Australia above.
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