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Chile Oil and Gas Report Q4 2008 (Business Monitor International)
- Market: Energy and Utilities
- Published Date: 24/10/2008
- Report Title: Chile Oil and Gas Report Q4 2008
- Table of Contents: View Table of Contents
- Report Type: Market Report
- Country: Chile
- Number of Pages: 89
The latest Chile Oil & Gas Report from BMI forecasts that the country will account for 4.82% of Latin American regional oil demand by 2012, while making no meaningful contribution to supply. Latin America regional oil use of 6.66mn barrels per day (b/d) in 2001 reached 7.47mn b/d in 2007. It should average 7.59mn b/d in 2008 and then rise to around 8.23mn b/d by 2012. In terms of natural gas, the region in 2007 consumed 183 billion cubic metres (bcm), with demand of 254bcm targeted for 2012, representing 39% growth. Production of 196bcm in 2007 should reach 279bcm in 2012, and implies 25bcm of net exports the end of the period. Chile’s share of gas consumption in 2007 was 2.40%, while it has no significant share of production. By 2012, its share of gas consumption is forecast to be 3.09%.
In Q208, we estimate that the OPEC basket price averaged just under US$115 per barrel (bbl) – up around 24% from the Q108 level. The OPEC basket price had exceeded US$127/bbl on the 22nd of May, slipping back towards US$121/bbl later in the month. In June, we assumed an average of around US$120/bbl, to deliver our quarterly estimate of US$114.98/bbl. The estimated Q208 average prices for the main marker blends are now US$118.63/bbl for Brent, US$119.61/bbl for WTI and US$115.89/bbl for Russian Urals (Mediterranean delivery). Our projections for 2008 as a whole have been revised upwards from the last quarterly report. We are now assuming an OPEC basket price average of US$106 per barrel for 2008, compared with the US$81 estimate provided by our last quarterly report. Based on recent price differentials, this implies Brent at US$109.71/bbl, WTI averaging US$110.64/bbl, and Urals at US$106.88/bbl.
Chilean real GDP growth is forecast by BMI at 4.0% for 2008, down from 5.1% in 2007. We are assuming 4.6% growth in 2009, 4.8% in 2010, followed by 4.5% in 2011 and 4.2% in 2012. State oil and gas company ENAP is responsible for all domestic oil and gas production, with volumes in decline. We are assuming oil and gas liquids production of no more than 5,000b/d by 2012, with the country expected to pump an average 8,000b/d in 2008. Consumption is forecast to increase by around 3% per annum to 2012, implying demand of 396,000b/d by the end of the forecast period. The import requirement would therefore be approximately 391,000b/d by 2012. Gas production is forecast to increase from 1.5bcm in 2007 to 1.7bcm by 2011, falling back to 1.6bcm in 2012, with net imports of 6.3bcm required by 2012.
Between 2007 and 2018, we are forecasting an increase in Chilean oil consumption of 30.6%, with demand rising steadily from 255,000b/d to 333,000b/d. The annual growth rate is expected to slow to 3.0% towards the end of the period. Gas production is expected to peak at around 1.8bcm in 2009/10, before declining steadily to 1.2bcm by 2018. With demand growth of 140% to almost 11bcm, this provides an import requirement rising from 2.9bcm to 9.4bcm during the 10-year period. Details of the new BMI 10-year forecasts can be found in the Appendix of this report, which provides global, regional and country-specific projections.
Chile’s outright last place in BMI’s updated Upstream Business Environment rating is achieved in spite of high reserves-to-production ratios (RPR) and an investor-friendly country risk profile. There is little likelihood of a move much further up the rankings, but Chile may be able to catch Mexico during the next few quarters. The country fares rather better in BMI’s updated Downstream Business Environment rating, with equal fifth place (alongside Peru) reflecting its oil demand growth outlook, regulatory environment and attractive country risk rating. It is positioned above Mexico in the league table, with the potential to move higher.
Chile’s outright last place in BMI’s updated Upstream Business Environment rating is achieved in spite of high reserves-to-production ratios (RPR) and an investor-friendly country risk profile. There is little likelihood of a move much further up the rankings, but Chile may be able to catch Mexico during the next few quarters. The country fares rather better in BMI’s updated Downstream Business Environment rating, with equal fifth place (alongside Peru) reflecting its oil demand growth outlook, regulatory environment and attractive country risk rating. It is positioned above Mexico in the league table, with the potential to move higher.
In Q208, we estimate that the OPEC basket price averaged just under US$115 per barrel (bbl) – up around 24% from the Q108 level. The OPEC basket price had exceeded US$127/bbl on the 22nd of May, slipping back towards US$121/bbl later in the month. In June, we assumed an average of around US$120/bbl, to deliver our quarterly estimate of US$114.98/bbl. The estimated Q208 average prices for the main marker blends are now US$118.63/bbl for Brent, US$119.61/bbl for WTI and US$115.89/bbl for Russian Urals (Mediterranean delivery). Our projections for 2008 as a whole have been revised upwards from the last quarterly report. We are now assuming an OPEC basket price average of US$106 per barrel for 2008, compared with the US$81 estimate provided by our last quarterly report. Based on recent price differentials, this implies Brent at US$109.71/bbl, WTI averaging US$110.64/bbl, and Urals at US$106.88/bbl.
Chilean real GDP growth is forecast by BMI at 4.0% for 2008, down from 5.1% in 2007. We are assuming 4.6% growth in 2009, 4.8% in 2010, followed by 4.5% in 2011 and 4.2% in 2012. State oil and gas company ENAP is responsible for all domestic oil and gas production, with volumes in decline. We are assuming oil and gas liquids production of no more than 5,000b/d by 2012, with the country expected to pump an average 8,000b/d in 2008. Consumption is forecast to increase by around 3% per annum to 2012, implying demand of 396,000b/d by the end of the forecast period. The import requirement would therefore be approximately 391,000b/d by 2012. Gas production is forecast to increase from 1.5bcm in 2007 to 1.7bcm by 2011, falling back to 1.6bcm in 2012, with net imports of 6.3bcm required by 2012.
Between 2007 and 2018, we are forecasting an increase in Chilean oil consumption of 30.6%, with demand rising steadily from 255,000b/d to 333,000b/d. The annual growth rate is expected to slow to 3.0% towards the end of the period. Gas production is expected to peak at around 1.8bcm in 2009/10, before declining steadily to 1.2bcm by 2018. With demand growth of 140% to almost 11bcm, this provides an import requirement rising from 2.9bcm to 9.4bcm during the 10-year period. Details of the new BMI 10-year forecasts can be found in the Appendix of this report, which provides global, regional and country-specific projections.
Chile’s outright last place in BMI’s updated Upstream Business Environment rating is achieved in spite of high reserves-to-production ratios (RPR) and an investor-friendly country risk profile. There is little likelihood of a move much further up the rankings, but Chile may be able to catch Mexico during the next few quarters. The country fares rather better in BMI’s updated Downstream Business Environment rating, with equal fifth place (alongside Peru) reflecting its oil demand growth outlook, regulatory environment and attractive country risk rating. It is positioned above Mexico in the league table, with the potential to move higher.
Chile’s outright last place in BMI’s updated Upstream Business Environment rating is achieved in spite of high reserves-to-production ratios (RPR) and an investor-friendly country risk profile. There is little likelihood of a move much further up the rankings, but Chile may be able to catch Mexico during the next few quarters. The country fares rather better in BMI’s updated Downstream Business Environment rating, with equal fifth place (alongside Peru) reflecting its oil demand growth outlook, regulatory environment and attractive country risk rating. It is positioned above Mexico in the league table, with the potential to move higher.
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