The latest Singapore Oil & Gas Report from BMI forecasts that the country will account for 3.46% of Asia Pacific regional oil demand by 2012, while not contributing to supply. Asia Pacific regional oil use of 21.4mn barrels per day (b/d) in 2001 reached an estimated 25.56mn b/d in 2007. It should rise to 29.38mn b/d by 2012. In terms of natural gas, the region consumed an estimated 436bn cubic metres (bcm) in 2007, with demand of 591bcm targeted for 2012, representing growth of 35.57% between 2007 and 2012.

Production of an estimated 354bcm in 2007 should reach 455bcm in 2012, but implies net imports rising from an estimated 82bcm per annum to 136bcm. Singapore’s share of gas consumption in 2007 was an estimated 1.63%, and market share is expected to rise to 1.86% by 2012. There is no gas production in Singapore. In Q108, we estimate that the OPEC basket price averaged US$92.64 per barrel (/bbl) – up around 9% from the Q407 level. The OPEC basket price had exceeded US$102 by the middle of March, slipping back towards US$96/bbl later in the month. The estimated Q108 average prices for the main marker blends are now US$96.54 for Brent, US$97.31 for WTI and US$93.44/bbl for Russian Urals (Mediterranean delivery).

Our projections for 2008 as a whole are revised upwards from BMI’s last quarterly report. We are now assuming an OPEC basket price average of US$81/bbl for 2008, compared with the US$74 estimate provided by our last quarterly report. Based on recent price differentials, this implies Brent at US$84.71/bbl, WTI averaging US$85.63/bbl and Urals at US$81.88/bbl. Singapore’s real GDP growth is forecast by BMI at 5.9% for 2008, down from an estimated 7.7% in 2007. We estimate 5.2% growth in 2009, 4.7% in 2010, 4.5% in 2011 and 5.2% in 2012. There is no domestic oil or gas production, with extensive international oil company (IOC) involvement in refining and petrochemicals.

Oil consumption is forecast to increase by around 3% per annum to 2012, implying demand of 1.02mn b/d by the end of the forecast period. Gas demand and imports are forecast to increase from an estimated 7.1bcm in 2007 to 11bcm by 2012. Between 2007 and 2018, we are forecasting an increase in Singapore’s domestic oil consumption from 879,000b/d to 1.21mn b/d (+38.1%), with the island’s refining capacity rising from 1.26mn b/d to 1.65mn b/d. Gas demand is expected to rise from around 7bcm in 2007 to a possible 17bcm by 2018 (+139%), driven by power generation requirements. LNG imports are expected to commence in 2013 and reach 4bcm per annum through the initial import terminal.

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. Singapore now ranks equal 11th (alongside South Korea and Hong Kong) in BMI’s updated Upstream Business Environment rating, thanks to a virtual absence of hydrocarbon resources. The score reflects the limited involvement of the government in upstream oil activities and an exceptionally healthy country risk profile, which partly offset the lack of reserves and output growth potential. The country sits just ahead of bottom-placed Taiwan in the upstream league table. The country ranks fourth in BMI’s updated Downstream Business Environment rating, reflecting its relatively high level of oil consumption, increasing gas demand, established modern refining capability, fuels export capability and a relatively low level of retail site intensity. It is sandwiched between Japan and South Korea.