The latest India Oil & Gas Report forecasts that the country will account for 13.23% of Asia Pacific regional oil demand by 2014, while providing 10.26% of supply. Regional oil use of 21.40mn barrels per day (b/d) in 2001 reached an estimated 25.63mn b/d in 2009. It should average 26.13mn b/d in 2010, then rise to around 29.23mn b/d by 2014.
Regional oil production was just under 8.41mn b/d in 2001, and averaged an estimated 8.46mn b/d in 2009. It is set to increase to 8.77mn b/d by 2014. Oil imports are growing rapidly, because demand growth is outstripping the pace of supply expansion. In 2001 the region was importing an average of 12.99mn b/d. This total had risen to an estimated 17.17mn b/d in 2009, and is forecast to reach 20.46mn b/d by 2014. The principal importers will be China, Japan, India and South Korea. By 2014 the only net exporter will be Malaysia.
In terms of natural gas, in 2009 the region consumed an estimated 466bn cubic metres (bcm) and demand of 616bcm is targeted for 2014. Production of an estimated 383bcm in 2009 should reach 542bcm in 2014, but this implies net imports falling from around 83bcm to 74bcm. This is thanks to many Asian gas producers being major exporters. India’s share of gas consumption in 2009 was an estimated 10.56%, while its share of production is put at 9.93%. By 2014 its share of gas consumption is forecast to be 14.23%, with the country accounting for 12.55% of supply.
For 2009 as a whole, we have assumed an average OPEC basket price of US$60.70 per barrel (bbl), a 35.5% decline year-on-year (y-o-y). For 2010, we expect to see a significant oil price recovery to US$83.00/bbl for the OPEC basket price, gaining further ground to US$85.00 in 2011 and to US$90.00/bbl in 2012 and beyond.
In 2010, we are forecasting global premium unleaded gasoline prices to average US$97.00/bbl, up from US$70.22/bbl in 2009. We are assuming an average global jet fuel price for 2010 of US$97.58/bbl, compared with US$70.63/bbl in 2009. For gasoil, the 2010 price estimate is for an average of US$97.40/bbl, compared with US$70.50/bbl in 2009. The 2010 naphtha price average, estimated at US$81.58/bbl, compares with US$59.07/bbl in 2009.
Indian real GDP growth is assumed to have been 6.1% in 2009, down from 6.7% in 2008. We are now assuming an annual average of 7.7% growth in 2010-2014. State oil firm Oil & Natural Gas Corporation (ONGC) is charged with maximising domestic oil production, which in 2009 averaged an estimated 755,000b/d. Thanks to its efforts and those of UK-based Cairn Energy, we see production peaking at around 950,000b/d by 2012. Oil consumption is forecast to increase by 4-5% per annum to 2014, implying demand of 3.87mn b/d by 2014. The import requirement would therefore be approximately 2.97mn b/d by the end of the forecast period. Gas consumption is set to rise from an estimated 49bcm in 2009 to 88bcm, with domestic supply up from around 38bcm in 2009 to at least 68bcm by 2014.
Between 2009 and 2019, we are forecasting an increase in Indian oil production of 12.58%, with crude volumes peaking in 2012 at 950,000b/d, then falling steadily to reach 850,000b/d in 2019. Oil consumption between 2009 and 2019 is set to increase by 49.35%, with growth slowing to an assumed 3.0% per annum towards the end of the period and the country using 4.53mn b/d by 2019. Gas production is expected to rise from an estimated 38bcm in 2009 to a possible 90bcm by 2019. With demand growth of 172.3%, India is likely to be importing up to 44bcm per annum of gas by the end of the period, largely in the form of LNG. Details of our 10-year forecasts can be found later in this report, which provide regional and country-specific projections.
India now ranks second, having overtaken Vietnam, in our updated and expanded Upstream Business Environment Rating, 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 just one point in front of Vietnam, but well ahead of Malaysia and China. It is 11 points behind Australia and is therefore unlikely to challenge for the top slot. The country ranks second, three points behind China, in our updated Downstream Business Environment Rating, 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 two points ahead of Singapore, with scope to pull further away from the more mature Asian energy economy.