Abstract
The latest Trinidad & Tobago Oil & Gas Report from BMI forecasts that the
country will account for just
0.49% of Latin America regional oil demand
by 2013, while providing only 1.23% of supply. Latin
America regional oil
use of 6.66mn barrels per day (b/d) in 2001 reached an estimated 7.61mn b/d
in
2008. It should average 7.57mn b/d in 2009 and then rise to around
8.23mn b/d by 2013. Regional oil
production was just under 10.40mn b/d in
2001, and in 2008 averaged an estimated 9.89mn b/d. It is set
to rise to
10.58mn b/d by 2013. Oil exports are slipping, because demand growth is
exceeding the pace of
supply expansion. In 2001, the region was exporting
an average 3.73mn b/d. This total had fallen to an
estimated 2.28mn b/d in
2008 and is forecast to be 2.35mn b/d in 2013. The principal exporters will
be
Mexico, Venezuela, Ecuador and Brazil.
As regards natural gas, the
region in 2008 consumed an estimated 191.3bn cubic metres (bcm), with
demand of 254.3bcm targeted for 2013, representing 32.9% growth. Estimated
production of 207.4bcm in
2008 should reach 289.9bcm in 2013, and implies
35.7bcm of net exports the end of the period. Trinidad
and Tobago (T&T)
contributed an estimated 9.93% to 2008 regional gas consumption, while
producing
20.25%. By 2013 it is expected to consume 10.32% of the
region’s gas, contributing 18.97% to 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.
T&T’s real GDP growth is now forecast by BMI
at 0.8% for 2009, down from 3.4% in 2008. We are
assuming 2.2% growth in
2010, 3.5% in 2011, 4.0% in 2012, followed by 4.3% in 2013. The emphasis
of
several major international oil company (IOC) partners to the state in
the hydrocarbons segment is on gas
for liquefied natural gas (LNG) export,
with limited potential for oil production. We are assuming oil and
gas
liquids production of no more than 130,000b/d by 2013, with the country
expected to pump
160,000b/d in 2009. Consumption beyond 2009 is forecast
to increase by around 5% per annum to 2013,
implying demand of 40,000b/d
by the end of the forecast period. Gas production is forecast to increase
from an estimated 42bcm in 2008 to 55bcm over the period, with net exports
growing from 23bcm to
29bcm by 2013, largely in the form of LNG.
Between 2008 and 2018, we are forecasting a decrease in T&T oil and gas
liquids production of 37.5%,
with liquids volumes falling steadily from
160,000b/d to 100,000b/d, largely in the form of gas liquids
associated
with gas field developments. Oil consumption between 2008 and 2018 is set to
increase by
58.3%, with growth slowing to an assumed 5.0% per annum
towards the end of the period and the country
using 51,000b/d by 2018. Gas
production is expected to rise steadily, from around 49bcm in 2008 to
70bcm in 2018. With demand growth of 66.77%, this implies export potential
rising from 23bcm to
37bcm between 2008 and 2018. Details of BMI’s
10-year forecasts can be found in the appendix to this
report.
T&T
still ranks fifth, ahead of Argentina, in BMI’s updated Upstream
Business Environment rating,
thanks largely to its natural gas resource
base and rising output. It stands two points clear of Argentina,
but its
combination of attractive licensing terms, competitive landscape and moderate
country risk is
probably not sufficient to move it further up the league
table over the medium term. The country now
ranks equal third above
Argentina in BMI’s updated Downstream Business Environment rating,
reflecting its modest level of oil consumption, region-leading refining
capacity expansion and relatively
high retail site intensity.
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