India Oil And Gas Report Q4 2010 - New Market Report Published.

The latest India Oil & Gas Report from BMI forecasts that the country will account for 12.59% of Asia Pacific regional oil demand by 2014, while providing 10.13% of supply. Regional oil use of 21.42mn barrels per day (b/d) in 2001 is set to reach a forecast 27.15mn b/d in 2010, then to rise to around 30.21mn b/d by 2014. Regional oil production was around 8.35mn b/d in 2001 and is forecast to average an estimated 8.82mn b/d in 2010. It is set to increase only slightly to 8.89mn 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 13.07mn b/d. This total will rise to a projected 18.32mn b/d in 2010 and is forecast to reach 21.32mn 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 2010 the region will consume an estimated 496bn cubic metres (bcm) and demand of 625bcm is targeted for 2014. Production of a forecast 415bcm in 2010 should reach 522bcm in 2014, which implies net imports rising from around 81bcm to 104bcm. This is thanks to many Asian gas producers being major exporters. India's share of gas consumption in 2010 is an estimated 12.78%, while its share of production is put at 10.84%. By 2014 its share of gas consumption is forecast to be 17.52%, with the country accounting for 13.42% of supply.

We continue to predict a 2010 OPEC basket oil price level of US$83.00/bbl. This equates to Brent at just under US$85.00, WTI at almost US$87.60, Urals averaging US$83.60 and Dubai at US$83.55. The 2011 OPEC assumption is US$85.00/bbl, rising to an average of around US$90.00 in 2012 and beyond. For the whole of 2010, we are currently assuming an average global jet fuel price of US$95.50/bbl, compared with around US$70.66 in 2009. The 2010 average global gasoil price, calculated by BMI, is US$92.67/bbl, against US$68.96 in 2009. The 2010 average naphtha price is estimated at US$83.09 - compared with US$59.30/bbl in 2009. For global unleaded gasoline, BMI is now forecasting an average US$95.66/bbl in 2010, up from around US$70.17/bbl in 2009.

Indian real GDP growth is assumed by BMI to be 7.8% in 2010, with an annual average of 8.0% forecast in 2010-2014. State oil firm Oil & Natural Gas Corporation (ONGC) is charged with maximising domestic oil production, which in 2010 averages an estimated 830,000b/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 3.80mn b/d by 2014. The import requirement would therefore be approximately 2.90mn b/d by the end of the forecast period. Gas consumption is set to rise from an estimated 63bcm in 2010 to 110bcm, with domestic supply up from around 45bcm in 2010 to at least 70bcm by 2014.

Between 2010 and 2019, we are forecasting an increase in Indian oil production of 2.41%, with crude volumes peaking in 2012 at 950,000b/d, then falling steadily to reach 850,000b/d in 2019. Oil consumption between 2010 and 2019 is set to increase by 42.27%, with growth slowing to an assumed 3.0% per annum towards the end of the period and the country using 4.45mn b/d by 2019. Gas production is expected to rise from an estimated 45bcm in 2010 to a possible 95bcm by 2019. With demand growth of 163.6%, India is likely to be importing up to 72bcm 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 now 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 14 points behind Australia and just one ahead of Vietnam. The country ranks second, just one behind 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 six points ahead of Australia, with no threat from the more mature Asian energy economy.

Source : officialwire.com