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Chile Oil and Gas Report Q1 2012
Business Monitor International, Jan 2012, Pages: 66
Business Monitor International's Chile 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 Chile's oil and gas industry.
BMI View:
With limited domestic oil and gas resources and rapidly rising demand, Chile is set to become increasingly reliant on imports. Rising gas demand will require the country to import more LNG cargoes at a time when the global LNG market is becoming more crowded. The country’s oil dependence will also continue to prove far more expensive than in the past. We forecast the cost of oil imports to remain above US$11bn per year over the coming decade, more than five times the price the country was paying in the early 2000s.
- Chile’s minimal oil production is forecast to continue declining over the coming decade, while rising demand is expected to see imports increase by about 7% from 2011 to 2016. BMI forecasts oil production will fall from 10,230 barrels per day (b/d) in 2011 to just 5,000b/d in 2016. Over the same period, oil consumption is expected to rise from around 314,200b/d to 336,510b/d, requiring a rise in imports – from 303,970b/d to 331,510 b/d.
- Gas imports will also be on the rise as demand grows and production remains flat. Production is expected to remain at around 0.8bn cubic metres (bcm) beyond 2011 after falling quickly over the latter half of the last decade. Consumption, meanwhile, will rise from around 4.2bcm in 2011 to 6.6bcm in 2016, as the country makes greater use of gas in the energy mix. This will mean imports rise from 3.36bcm in 2011 to just over 6bcm in 2016, mostly in the form of liquefied natural gas (LNG).
- Those trends are expected to continue over the latter half of the 10-year forecast period. With limited investment channelled into new exploration, oil production is forecast to decline further to a negligible 2,500b/d by 2021, while demand is expected to rise to nearly 360,000b/d, almost all of which will come from imports. Gas production is seen at 0.7bcm in 2021, while consumption is forecast to rise to nearly 9bcm, requiring imports of around 8bcm by 2020.
- BMI's oil price assumption for 2011 is US$101.90/bbl for the OPEC basket; falling to US$99.38/bbl in 2012 and US$97.23/bbl in 2013. BMI's long-term price assumption for the OPEC basket is US$93.23/bbl. At this price, BMI forecasts Chile’s oil import bill to be US$11.4bn in 2016 and over US$12bn by 2021.
- Chile’s oil and gas sector is open to foreign investment, but a limited resource base has seen foreign investment focused on the country’s southern cone neighbours Argentina and Brazil. State oil and gas company Empresa Nacional del Petróleo (ENAP) is responsible for all domestic oil and gas production. Important foreign investors include Brazil’s state-run Petrobras, Anglo-Dutch major Royal Dutch Shell and GeoPark.
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