2012-03-13 18:01:47 - Indonesia Oil and Gas Report Q4 2011 - a new market research report on companiesandmarkets.com

The latest Indonesia Oil & Gas Report forecasts that the country will account for 4.80% of Asia Pacific regional oil demand by 2015, while providing 11.38% of supply. Regional oil use of 26.07mn barrels per day (b/d) in 2010 is forecast to rise to around 30.22mn b/d by 2015. Regional oil production was around 7.92mn b/d 2010 and is set to decrease to 7.88mn b/d by 2015. Oil imports are growing rapidly, because demand growth is outstripping the pace of supply expansion. In 2010, the region was importing an average 18.15mn b/d. This total rises to an estimated 22.34mn b/d in 2015. The principal importers will be China, Japan, India and South Korea. By 2015, the only net exporter will

 

 

be Malaysia.

In terms of natural gas, in 2010 the region consumed around 513.3bn cubic metres (bcm) and demand of 664.9bcm is targeted for 2015. Production of 406.0bcm in 2010 should reach 556.7bcm in 2015, implying net imports falling from around 112.3bcm to 111.8bcm. Indonesia´s share of gas consumption in 2015 is put at7.44%, while its share of production is estimated at 14.48%.

Global GDP growth in 2011 is forecast at 3.2%, down from 4.3% in 2010. Growth in the eurozone should be marginally higher than 2010, while US and Chinese economic expansion will slow and Japan´s growth will be negative, reflecting the devastating earthquake and tsunami in March 2011. Our oil price assumption for 2011 is US$101.90 per barrel (bbl) for the OPEC basket, falling to US$97.50/bbl in 2012.

We forecast that Indonesian real GDP growth will be 5.93% in 2011. We foresee average annual growth of 6.14% in 2011-2015. 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. We are estimating oil and gas liquids production of no more than 896,000b/d by 2015, although the country is expected to pump 980,000 b/d in 2011. Consumption is forecast to increase by up to 2.5% per annum to 2015. Our estimates imply demand of 1.45mn b/d by the end of the forecast period. The import requirement would therefore be approximately 553,000b/d by 2015. Gas production, rising to an estimated 80.6bcm by 2015, should provide end-period export potential of 31.1bcm, with supply risk on the downside.

Between 2011 and 2020, we forecast a reduction in Indonesian oil production of 22.2%, with crude volumes falling steadily to 763,000b/d in 2020. Oil consumption between 2011 and 2020 is set to increase by 20.7%, with growth slowing to an assumed 2.0% per annum towards the end of the period and the country using 1.60mn b/d by 2020. Gas production is expected to rise from an estimated 86.6bcm in 2011 to a peak of 90.4bcm by 2017-20. With demand growth of 65.8%, this provides an export capability peaking at 46.7bcm in 2011, before falling to 24.2bcm by 2020, largely in the form of liquefied natural gas (LNG). Details of our 10-year forecasts, which provide regional and country-specific projections, can be found later in this report.

Indonesia is now ranked 11th, nestled between Papua New Guinea and Pakistan, in our composite Risk/Reward Ratings league table. This reflects its 11th place in our updated upstream ratings, with a relatively strong resource position offset by poor output growth prospects, a deteriorating reserves-toproduction ratio (RPR) and extensive state involvement. The country sits six points ahead of South Korea, with little chance of a change in position during the coming quarters. Indonesia ranks ninth in our downstream ratings, reflecting its low level of retail site intensity, limited refinery capacity expansion plans and modest oil and gas demand growth outlook. It is just ahead of Pakistan, and may struggle to defend its position over the longer term.

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