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India Oil and Gas Report Q1 2011
Business Monitor International, Nov 2010, Pages: 143
India Oil and Gas Report provides industry professionals and strategists, corporate analysts, oil and gas associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on India's oil and gas industry.
The latest India Oil & Gas Report from BMI forecasts that the country will account for 13.21% of Asia Pacific regional oil demand by 2015, while providing 10.41% of supply. Regional oil use of 21.42mn barrels a day (b/d) in 2001 will reach an estimated 27.11mn b/d in 2010, then rises to around 30.64mn b/d by 2015. Regional oil production was around 8.35mn b/d in 2001, and average an estimated 8.91mn b/d in 2010. It is set to decrease slightly to 8.89mn b/d by 2015. Oil imports are growing rapidly, because demand growth is outstripping the pace of supply expansion. In 2001, the region was importing an average of 13.07mn b/d. This total will have risen to an estimated 18.20mn b/d in 2010, and is forecast to reach 21.75mn b/d by 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 is expected to consume 489bn cubic metres (bcm) and demand of 633bcm is targeted for 2015. Production of an estimated 412bcm in 2010 should reach 548bcm in 2015, implying net imports rising from around 77bcm to 84bcm. This is thanks to many Asian gas producers being major exporters. India’s share of gas consumption in 2010 is an estimated 11.25%, while its share of production is put at 10.92%. By 2015 its share of gas consumption is forecast to be 15.93%, with the country accounting for 13.32% of supply.
For 2011, there is considerable oil demand and oil price uncertainty, but still a very strong possibility that oil will trend higher. Economic growth may have been subdued late in 2010 and into early 2011, but should still support meaningful oil demand increases. Non-OPEC supply is likely to emerge only slightly higher so, with continued OPEC discipline, the foundations have been laid for an oil price rise – albeit falling well short of the improvement seen this year. It seems likely that the 2010 average OPEC basket price will have emerged around the US$77.00 per barrel (bbl) level, representing a year-on-year (y-o-y) gain of approximately 27%. Progress towards at least US$80 is seen as achievable in 2011.
Indian real GDP growth is assumed by BMI to have been 7.9% in 2010, with an annual average of 8.0% forecast in 2010-2015. State oil firm Oil & Natural Gas Corporation (ONGC) is charged with maximising domestic oil production, which in 2010 will average an estimated 815,000b/d. Thanks to its efforts and those of UK-based Cairn Energy, BMI see production peaking at around 950,000b/d by 2013. Oil consumption is forecast to increase by 4-5% per annum to 2015, implying demand of 4.05mn b/d by 2015. The import requirement would therefore be approximately 3.12mn b/d by the end of the forecast period. Gas consumption is set to rise from an estimated 55bcm in 2010 to 101bcm, with domestic supply up from around 45bcm in 2010 to at least 73bcm by 2015.
Between 2010 and 2020, BMI are forecasting a fall in Indian oil production of 1.84%, with crude volumes peaking in 2013 at 950,000b/d, then falling steadily to reach 800,000b/d in 2020. Oil consumption between 2010 and 2020 is set to increase by 43.30%, with growth slowing to an assumed 3.0% per annum towards the end of the period and the country using 4.69mn b/d by 2020. Gas production is expected to rise from an estimated 45bcm in 2010 to a possible 85bcm by 2020. With demand growth of 182.1%, India is likely to be importing up to 70bcm 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 later in this report, which provide regional and country-specific projections.
India is ranked second, behind Australia, in BMI’s composite Business Environment (BE) league table, leading China as a result of a good performance in both the upstream and downstream segments. India ranks second, ahead of Vietnam, in BMI’s upstream Business Environment ratings, 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 16 points behind Australia and four ahead of Vietnam. The country now shares first place with China in BMI’s downstream Business Environment ratings, 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 seven points ahead of Japan, with no threat from the more mature Asian energy economy.
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