Abstract
The latest Chile Oil & Gas Report from BMI forecasts that the country will
account for 4.60% of Latin
American regional oil demand by 2013, while
making no meaningful contribution to 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. Chile’s
share of gas
consumption in 2008 was an estimated 2.61%, while it has no significant share
of production.
By 2013, its share of gas consumption is forecast to be
2.65%.
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.
Chilean real GDP growth is now forecast by BMI at 0.1% for 2009, down from
3.2% in 2008. We are
assuming 1.2% growth in 2010, 3.2% in 2011, 2.9% in
2012 and 3.5% in 2013. State oil and gas company
Empresa Nacional del
Petróleo (ENAP) is responsible for all domestic oil and gas production,
with
volumes in decline. We are assuming oil and gas liquids production of
no more than 4,000b/d by 2013,
with the country expected to pump an
average 8,000b/d in 2009. Consumption beyond 2009 is forecast to
increase
by up to 3% per annum to 2013, implying demand of 379,000b/d by the end of the
forecast
period. The import requirement would therefore be around
375,000b/d by 2013. Gas production is
forecast to increase from an
estimated 1.6bcm in 2008 to a peak of 1.8bcm in 2009/2010, falling back to
1.6bcm in 2013, with net imports of 5.2bcm required by 2013.
Between 2008
and 2018, we are forecasting an increase in Chilean oil consumption of 21.98%,
with
demand rising steadily from 343,000b/d to 418,000b/d. The annual
growth rate is expected to slow to
2.0% towards the end of the period. Gas
production is expected to peak at around 1.8bcm in 2009/2010,
before
declining steadily to 1.2bcm by 2018. With demand growth of 72.3% to 10bcm,
this provides an
import requirement rising from 3.4bcm to 7.4bcm during
the 10-year period. Details of BMI’s 10-year
forecasts can be found
in the appendix to this report.
Chile’s outright last place in
BMI’s updated Upstream Business Environment rating is achieved in
spite
of high reserves-to-production ratios (RPR) and an investor-friendly
country risk profile. There is little
likelihood of a move much further up
the rankings, but Chile may be able to catch Mexico during the next
few
quarters. Chile fares rather better in BMI’s updated Downstream Business
Environment rating,
taking sixth place (behind Peru), reflecting its oil
demand growth outlook, regulatory environment and
attractive country risk
rating. It is positioned ahead of Mexico in the league table, with the
potential to
move higher.
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