Thailand Oil and Gas Report

The latest Thailand Oil & Gas Report from BMI forecasts that the country will account for 2.92% of Asia Pacific regional oil demand by 2013, while providing 2.77% of supply. Asia Pacific regional oil use of 21.40mn barrels per day (b/d) in 2001 reached 25.67mn b/d in 2008. It should average 24.83mn b/d in 2009, then rise to around 28.51mn b/d by 2013. Regional oil production was just under 8.41mn b/d in 2001, and averaged 8.45mn b/d in 2008. It is set to increase to 8.75mn b/d by 2013. In 2001 the region was importing an average 12.99mn b/d. This total had risen to an estimated 17.22mn b/d in 2008, and is forecast to reach 19.76mn b/d by 2013.

In terms of natural gas, in 2008 the region consumed 459bn cubic metres (bcm) and demand of 562bcm is targeted for 2013. Production of 356bcm in 2008 should reach 488bcm in 2013, but implies net imports easing from an estimated 102bcm per annum in 2008 to 74bcm in 2013. This is in spite of many Asian gas producers being major exporters. Thailand's share of gas consumption in 2008 was 8.16%, while its share of production was 8.11%. By 2013, its share of gas consumption is forecast to be 7.58%, with the country accounting for 7.17% of supply.

For 2009 as a whole, we are now assuming an average OPEC basket price of US$55.00 per barrel (bbl), a 41.5% decline year-on-year (y-o-y). This represents an upgrade from the US$52 forecast we have stuck with during the past three quarters. Our OPEC basket assumption delivers likely Brent, WTI, Urals and Dubai prices of US$56.30, US$57.50, US$55.60 and US$55.60/bbl respectively. For 2010, we expect to see a recovery to US$60.00/bbl for the OPEC price (up from our previous forecast of US$58), gaining further ground to US$65.00 in 2011 and to US$70.00/bbl in 2012. Our post-2010 forecasts are unchanged and we are continuing to use a long-term price assumption of US$70.00 for 2013-2018.

In 2009, BMI is now assuming a global average gasoline price of US$62.12/bbl, with the fuel having peaked in June. The overall y-o-y fall in 2009 gasoline prices is put at 40.0%. The BMI gasoil forecast is for an average price of US$68.62/bbl, assuming a monthly high of US$92.49/bbl in December. The fullyear outturn represents a 43.4% fall from the 2008 level. The annual jet price level for 2009 is forecast to be US$65.17/bbl. This compares with US$124.95/bbl in 2008. The 2009 average naphtha price is put by BMI at US$49.06/bbl, down 43.9% from the previous year's level.

Thai real GDP is now forecast by BMI to decline by 4.5% in 2009, compared with growth of 2.6% in 2008. We are now assuming 2.2% growth in 2010, followed by 3.6% in 2011, 4.2% in 2012 and 4.6% in 2013. State-controlled PTTEP and international oil company (IOC) partners are working hard to secure domestic oil and gas volumes, with limited success in terms of crude oil. We are assuming oil and gas liquids production of no more than 242,000b/d by 2013, although the country is expected to pump 295,000b/d in 2009. Consumption is expected to slip in 2009, but should then increase by up to 2% per annum in 2010-2013, implying demand of 833,000b/d by the end of the forecast period. The import requirement would therefore be about 591,000b/d by 2013. End-period gas consumption of an estimated 42.6bcm outstrips likely supply of 35.0bcm.

Between 2008 and 2018, we are forecasting a reduction in Thai oil production of 42.3%, with crude volumes falling steadily to 187,000b/d in 2018. Oil consumption between 2008 and 2018 is set to increase by 15.4%, with growth slowing to an assumed 2.0% per annum towards the end of the period and the country using 0.92mn b/d by 2018. Gas production is expected to rise from 28.9bcm in 2008 to a peak of 35.0bcm in 2012-2014, before slipping to 30.0bcm by 2018. With demand growth of 45.5%, this will require imports to rise to 24.4bcm by the end of the forecast period. Details of BMI's 10-year forecasts can be found at the back of this report, which provides regional and country-specific projections.

Thailand still ranks eighth in BMI's updated Upstream Business Environment rating, reflecting a modest resource position, moderate gas growth outlook and an IOC-friendly competitive environment. The country sits just ahead of Indonesia, but should be able to keep its Asian neighbour at bay. Thailand now ranks equal 10th with Malaysia and Pakistan in BMI's updated Downstream Business Environment rating, reflecting its above-average gas demand and relatively low level of retail site intensity. It is above Hong Kong and Taiwan in the league table.