Latest Report

The latest Malaysia Oil & Gas Report from BMI forecasts that the country will account for 1.78% of Asia Pacific regional oil demand by 2015, providing 8.80% of supply. Regional oil use of 21.42mn barrels per day (b/d) in 2001 will reach an estimated 27.11mn b/d in 2010, then rise to around 30.64mn b/d by 2015. Regional oil production was around 8.35mn b/d in 2001, and will average an estimated 8.91mn b/d in 2010. It is set to decrease slightly to 8.89mn b/d by 2015. Oil imports are growing rapidly, because demand growth is outstripping the pace of supply expansion. In 2001, the region was importing an average of 13.07mn b/d. This total will rise to an estimated 18.20mn b/d in 2010, and is forecast to reach 21.75mn b/d by 2015. The principal importers will be China, Japan, India and South Korea. By 2015 the only net exporter will be Malaysia.

In terms of natural gas, in 2010 the region is expected to consume 489bn cubic metres (bcm) and demand of 633bcm is targeted for 2015. Production of an estimated 412bcm in 2010 should reach 548bcm in 2015, implying net imports rising from around 77bcm to 84bcm. This is thanks to many Asian gas producers being major exporters. Malaysia’s share of gas consumption in 2010 is an estimated 6.55%, while its share of production is put at 16.99%. By 2015, its share of gas consumption is forecast to be 5.56%, with the country accounting for 15.51% of supply.

For 2011, there is considerable oil demand and oil price uncertainty, but still a very strong possibility that oil will trend higher. Economic growth may have been subdued late in 2010 and into early 2011, but should still support meaningful oil demand increases. Non-OPEC supply is likely to emerge only slightly higher so, with continued OPEC discipline, the foundations have been laid for an oil price rise – albeit falling well short of the improvement seen this year. It seems likely that the 2010 average OPEC basket price will have emerged around the US$77.00 per barrel (bbl) level, representing a year-on-year (y-o-y) gain of approximately 27%. Progress towards at least US$80 is seen as achievable in 2011.

BMI believes that Malaysian real GDP will increase by 4.9% in 2010, with average annual growth of 5.1% forecast for 2010-2015. State-owned Petronas operates in partnership with various international oil companies (IOCs) under a production sharing system that we believe will result in oil production of 782,000b/d by 2015. Consumption is forecast to rise by up to 2% per annum to 2015, implying demand of 547,000b/d. Malaysia’s gas exports are set to rise from an estimated 38bcm in 2010 to almost 50bcm in 2015, with production climbing from an estimated 70bcm to 85bcm over the period.

Between 2010 and 2020, we are forecasting a 4.02% decrease in Malaysian oil production, with crude volumes peaking at 790,000b/d in 2014. Oil consumption between 2010 and 2020 is set to increase by 21.42%, with growth slowing to an assumed 1.5% per annum towards the end of the period and the country using 589,000b/d by 2020. Gas production is expected to rise from an estimated 70bcm in 2010 to a possible 100bcm by 2019/20. With demand growth of 22.53%, this provides an export capability peaking at 61.6bcm in 2019, largely in the form of liquefied natural gas (LNG). Details of BMI’s 10-year forecasts can be found later in this report, which provides regional and country-specific projections.

Malaysia is now ranked fifth, behind Vietnam, in BMI’s composite Business Environment (BE) league table. Its strong showing reflects the country’s fourth place in BMI’s updated upstream Business Environment ratings, reflecting a strong resource position and a moderate gas output growth outlook, offset by extensive state involvement. The country is just one point behind Vietnam, but two points ahead of Papua New Guinea (PNG). Malaysia ranks 13th, behind Hong Kong, in BMI’s downstream Business Environment ratings, reflecting its limited refinery capacity expansion plans, sluggish oil and gas demand growth outlook and relatively high level of retail site intensity.

Source – © 2011