The latest Thailand Oil & Gas Report from BMI forecasts that the country will account for 3.58% of Asia Pacific regional oil demand by 2012, while providing 2.73% of 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 around 29.38mn b/d by 2012. In terms of natural gas, the region in 2007 consumed an estimated 436bn cubic metres (bcm), 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. Thailand’s share of gas consumption in 2007 was an estimated 7.55%, while its share of production was 7.06%. By 2012, its share of gas consumption is forecast to be 7.99%, with the country accounting for 7.50% of supply. 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, WTI averaging US$85.63/bbl and Urals at US$81.88/bbl. Thai real GDP growth is forecast at 4.8% for 2008, unchanged from 2007. We are assuming 5.5% growth in 2009, 5.6% in 2010, 5.3% in 2011 and 4.9% in 2012.

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 235,000b/d by 2012, although the country is expected to pump 292,000b/d in 2008. Consumption is expected to have recovered in 2007 after stagnating in 2006, but then increase by 2.5% per annum to 2012, implying demand of 1.05mn b/d by this time. The import requirement would therefore be about 817,000b/d by 2012. End-period gas consumption of 47.2bcm outstrips likely supply of 35bcm. Between 2007 and 2018, we are forecasting a reduction in Thailand oil production of 42.4%, with crude volumes falling steadily to 173,000b/d in 2018.

Oil consumption between 2007 and 2018 is set to increase by 27.4%, with growth slowing to an assumed 2.0% per annum towards the end of the period and the country using 1.19mn b/d by 2018. Gas production is expected to rise from around 25bcm in 2007 to a peak of 35bcm in 2012-2014, before slipping to 30bcm by 2018. With demand growth of 92%, this requires imports rising to 33bcm by the end of the forecast period. We are assuming liquefied natural gas (LNG) imports beyond 2012. 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.

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 Indonesia and just behind Malaysia. The country now ranks equal eighth with Pakistan in BMI’s updated Downstream Business Environment rating, reflecting its above-average gas demand growth outlook and relatively low level of retail site intensity. It is ahead of the Philippines and just behind Australia in the league table.