global asian oil market outlook dec 2002
DESCRIPTION
It is a report about opportiunities for investment in AsiaTRANSCRIPT
1
Global Global and Asian and Asian
Oil Oil Market Market OutlookOutlook
December 2002
by
2
Global Oil Demand and the Asia-Pacific Region
It is clear that global oil demand is weak.
IEA estimates that global demand grew by only 230 kb/d in 2001. In 2002 it is projected to grow by 200 kb/d, down from its projection of 420 kb/d only a few months ago.
3
Year World Asia-Pacific Share of AP
1990 330 704 213%1991 410 596 145%1992 560 923 165%1993 330 707 214%1994 840 882 105%1995 1,400 927 66%1996 1,630 823 50%1997 1,500 845 56%1998 420 -249 -59%1999 1,620 958 59%2000 640 490 76%2001 230 98 43%2002* 170 143 84%
Total 10,080 7,846 78%
*ProjectedSources: IEA (for World Demand) and FACTS Inc. (for Asia Pacific)
(kb/d)Oil Demand, 1990-2002
Global and Asia-Pacific Incremental
4
1998 1999 2000 2001 2002* 2003*China 87 343 320 111 86 174India 112 154 28 3 16 49Japan -206 84 -40 -186 -183 20S. Korea -246 130 55 3 28 28Others 4 248 137 167 197 151Total -249 958 501 98 143 422*Projected
Asia Oil Demand Growth, Selected Nations
5
Oil demand growth is weak in the short term but it will recover in the longer term...
Asia-Pacific: Annual Oil Demand Growth1975-2010
-800
-600
-400
-200
0
200
400
600
800
1,000
1,200
75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09
kb/d
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Demand Increase, kb/d
Demand Increase, %
6
Meanwhile, OPEC capacity continues to grow.
OPEC capacity grew by around one million b/d in 2001 alone.
Between 2002 and 2005, we expect OPEC capacity to go up by around 0.5 to 1 million b/d per annum, including condensates.
This excludes huge potential growth in Saudi Arabia and Iraq.
Combined OPEC and non-OPEC capacity will grow by around 1.5 million b/d of new capacity per annum until 2005/2006.
These forces are already in motion!
Oil Demand, Production Capacity, and Price
7
OPEC and Oil Prices
Beyond 2002 additional OPEC capacity plus non-
OPEC additions will act to keep a lid on prices.
Most OPEC members have spare capacity and
an incentive to cheat.
In the 2003-2005 period, the price should settle into
the $15-20/b range.
8
Real GDP Growth in Selected Asian Countries, Base Case, 1999-2020/1
(percent)
1999 2000 2001 2002 2003 2005 2010 2015 2020
Australia 4.8 3.1 2.6 4.0 3.8 3.0 2.8 2.5 2.5Bangladesh 5.4 5.6 4.7 4.0 4.0 6.0 6.0 6.0 5.0China/2 5.1 7.0 6.0 5.5 5.5 5.5 6.0 4.0 3.5Fiji 9.7 -2.8 2.6 3.7 5.2 3.5 3.0 3.0 3.0Hong Kong 3.0 10.4 0.2 1.5 3.4 3.9 4.0 3.5 3.5India/2 6.7 5.4 4.1 5.0 5.7 4.8 5.0 3.5 3.0Indonesia 0.8 4.8 3.3 3.5 4.5 6.0 5.5 5.0 4.0Japan 0.8 2.4 -0.3 -0.5 1.1 1.5 1.5 2.0 2.0Malaysia 6.1 8.3 0.5 3.5 5.3 5.0 4.0 3.0 3.0New Zealand 3.9 3.8 2.5 3.0 2.9 2.5 2.5 3.0 3.0Pakistan 4.1 4.3 3.6 4.6 5.0 4.5 5.0 4.0 4.0PNG 7.6 -0.8 -3.4 1.2 2.8 3.0 3.0 4.0 4.0Philippines 3.4 4.4 3.2 4.0 3.8 5.0 4.0 3.5 3.5Singapore 6.9 10.3 -2.0 3.6 4.2 3.0 3.0 2.5 2.5South Korea 10.9 9.3 3.0 6.3 5.9 3.5 3.5 3.0 3.0Taiwan 5.4 5.9 -1.9 3.3 4.0 3.0 2.5 2.5 2.5Thailand 4.4 4.6 1.8 3.5 3.5 4.5 4.0 3.5 3.5Vietnam 4.2 5.5 5.0 5.3 6.5 7.0 5.0 4.0 4.0
1. 1999-2001: actual; 2002-2020: projections.2. Estimated by FACTS - Differs from the official growth rate.
9
Key Indicators for China's Petroleum Sector, 1996-2002 /1
1996 1997 1998 1999 2000 2001 2002
Crude Production (million b/d) 3.14 3.21 3.21 3.21 3.24 3.30 3.40 -Offshore (kb/d) 300 324 326 323 350 383 420 -Xinjiang (kb/d) /2 287 318 310 322 327 339 347
Oil Consumption (million b/d) 3.41 3.79 3.87 4.22 4.54 4.65 4.73 Annual Growth Rate 7.9% 11.1% 2.3% 8.8% 7.6% 2.4% 1.8%
Refining Thruput (million b/d) 3.01 3.32 3.31 3.67 4.20 4.20 4.23
Crude Oil Imports (kb/d) 457 709 546 732 1,399 1,205 1,325
Crude Oil Exports (kb/d) 407 397 312 143 208 151 125
Product Imports (kb/d) 422 593 624 620 522 592 608 -LPG 113 115 152 176 153 155 210 -Gasoil 94 152 103 26 21 15 12 -Fuel Oil 175 252 299 323 260 333 280 -Others 40 74 70 95 88 89 106
Product Exports (kb/d) 120 157 146 176 220 247 233 -Gasoline 31 42 42 96 106 134 126 -Kero/jet 16 16 20 27 38 34 29 -Gasoil 32 47 20 12 12 5 14 -Others 41 53 63 41 63 74 64
1. 1996-2001: final; 2002: estimates.2. Including production from Junggar, Tarim, and Turpan-Hami basins.
10
Key Indicators for India's Petroleum Sector, 1995-2002 /1
1995 1996 1997 1998 1999 2000 2001 2002
Crude Production (kb/d) 707 665 682 665 658 645 648 659
Oil Consumption (kb/d) 1,529 1,660 1,765 1,878 2,031 2,059 2,062 2,078Annual Growth Rate 6.5% 8.5% 6.4% 6.4% 8.2% 1.4% 0.1% 0.8%
Refining Thruput (kb/d) 1,169 1,241 1,301 1,336 1,589 1,996 2,152 2,190
Crude Oil Imports (kb/d) /2 627 579 624 597 931 1,351 1,504 1,531
Crude Oil Exports (kb/d) 0 0 0 0 0 0 0 0
Product Imports (kb/d) 390 451 488 516 438 271 196 220 -LPG 20 36 40 54 61 34 26 46 -Gasoil 226 278 285 233 138 35 0 37 -Fuel Oil 17 25 15 27 18 29 19 15
Product Exports (kb/d) 61 62 53 24 24 102 159 228 -Gasoline 0 0 0 0 2 13 49 65 -Gasoil 4 4 5 0 6 44 55 100
1. 1995-2000: final; 2001: estimates, 2002: projections.2. 1999 onwards is calculated from crude runs and domestic production
11
Key Indicators for Indonesia's Petroleum Sector, 1996-2002
1996 1997 1998 1999 2000 2001 2002*
Oil Production (million b/d) 1,601 1,581 1,556 1,500 1,414 1,332 1,318
- Crude Oil 1,428 1,418 1,401 1,351 1,272 1,200 1,188 - Condensate 173 163 155 149 142 132 130
Oil Consumption (kb/d) 882 979 923 978 1,050 1,076 1,094
Annual Growth Rate 7.6% 11.0% -5.7% 5.9% 7.4% 2.5% 1.7%
Refining Thruput (kb/d) 936 911 931 922 995 990 998
Crude Oil Imports (kb/d) 196 172 199 232 204 309 291
Crude Oil Exports (kb/d) 777 791 768 782 610 662 648
Product Imports (kb/d) 176 297 150 211 247 275 296- Gasoil 97 152 87 104 112 136 161- Kerosene 41 60 22 49 51 47 55- HSFO 32 51 27 37 32 20 14
Product Exports (kb/d) 1 166 175 143 152 183 152 150- LSWR 138 140 123 109 125 98 104
Notes: * Estimate; 1 Excluding LPG.
12
Key Indicators for South Korea's Petroleum Sector, 1995-2002
1995 1996 1997 1998 1999 2000 2001 2002*
Oil Consumption (kb/d) 1,976 2,113 2,222 1,976 2,106 2,162 2,164 2,192
Annual Growth Rate 8.8% 6.9% 5.2% -11.1% 6.6% 2.6% 0.1% 1.3%
Refining Thruput (kb/d) 1,729 1,970 2,389 2,263 2,391 2,433 2,355 2,119
Crude Oil Imports (kb/d) 1,712 1,978 2,393 2,244 2,395 2,449 2,354 2,122
Product Imports (kb/d) 544 564 403 484 504 560 548 626-LPG 146 151 157 135 158 153 125 161-Naphtha 177 193 103 288 277 305 323 345-Gasoline 0 0 0 1 0 0 5 12-Kero/Jet 64 88 53 17 18 23 13 34-Diesel 88 51 9 6 6 8 18 28-Fuel Oil 68 80 72 35 44 69 63 46
Product Exports (kb/d) 347 438 611 827 816 838 816 605-LPG 8 10 13 29 37 22 13 11-Naphtha 59 88 101 123 127 133 141 127-Gasoline 1 7 27 42 31 41 44 41-Kero/Jet 46 62 65 126 135 158 160 134-Diesel 116 153 250 296 242 265 250 189-Fuel Oil 110 114 138 209 226 198 187 97
*Preliminary
13
Role of China
14
Energy and the Economy High official GDP growth but a weak linkage with
primary energy consumption growth. Official GDP growth is exaggerated. Huge energy production and consumption. Coal production and consumption declined
substantially between 1996 and 2000; a slight rebound emerged in 2001 and continues in 2002.
Growth of oil and gas use is strong. Structure of primary energy use will continue to
change significantly over the next fifteen years.
15
Key Economic Indicators for China, 1997-2002 /1
1997 1998 1999 2000 2001 2002
Yearend Population (million) 1,236.3 1,248.1 1,259.1 1,267.5 1,276.3 1,285.3Real GDP Growth (Official) 8.8% 7.8% 7.1% 8.0% 7.3% 7.5%Per Capita GDP (2001 US$) 700.5 748.0 794.1 851.9 907.8 969.0
Inflation Rate /2 2.8% -0.8% -1.4% 0.4% 0.7% 1.0%Urban Unemployment Rate /3 3.1% 3.1% 3.1% 3.1% 3.6% 4.5%
Foreign Trade Bal. (US$ bn) 40.4 43.6 29.1 24.1 22.6 27.8Foreign Trade Total (US$ bn) 325.2 323.9 360.7 474.3 509.8 600.3 Exports (US$ bn) 182.8 183.8 194.9 249.2 266.2 314.1 Imports (US$ bn) 142.4 140.2 165.8 225.1 243.6 286.2
Direct Foreign Investment Contractual (US$ bn) 51.0 52.1 41.2 62.4 69.2 83.0 Actual Use (US$ bn) 45.3 45.5 40.4 40.7 46.9 52.5
Foreign Exchange Reserves (US$ bn, end of the year) 139.9 145.0 154.7 165.6 212.2 259.0
1. 1997-2001: final; 2002: estimates.2. Defined as annual percentage change of overall retail price index.3. Officially registered. If job-losing state workers are included, actual rates are larger.
16
SDPC: State Development Planning Commission. SETC: State Economic and Trade Commission.CNPC: China National Petroleum Corporation. PetroChina: PetroChina Company LimitedSinopec: China Petrochemical Corporation. Sinopec Corp.: China Petroleum and Chemical CorporationMOFTEC: Ministry of Foreign Trade and Economic Cooperation. Unipec: United International Petroleum & Chemicals Co., Ltd.Sinochem: China National Chemical Import & Export Corporation. Chinaoil: China National United Oil Corporation.Zhenrong: Zhuhai Zhenrong Trading Co.
Organizational Chart ofChina's Petroleum Industry (State), 2002
The State Council
Sinochem
MOFTEC
CNOOC(CNOOC Ltd.)
Chinaoil(CNPC:70%;
Sinochem:30%)
Unipec(Sinopec: 70%;
Sinochem: 30%)
CNPC(PetroChina)
Sinopec(Sinopec Corp.)
SETCSDPC
Zhenrong
17
China's Crude Oil Production by Company, 2001
CNPC/PetroChina 65%
CNOOC 11%Others 1%
Sinopec 23%
Note: Total output was 3.30 million b/d.
18
China's Crude Distillation Capacity by Company at the Start of 2002
CNPC/PetroChina 41%
Others 7%
Sinopec 52%
Note: Total capacity was 5.6 million b/d.
19
China's Petroleum Product Demand 1990-2015
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
90 91 92 93 94 95 96 97 98 99 00 01 02 05 08 10 15
Light Distillates
Middle Distillates
Heavy Distillates
(kb/d)
Note: 1990-2000 are actual, 2001 is preliminary, 2002-2015 are projections.
20
China: Petroleum Product Balance, 2001
Production Imports Exports Demand
LPG 338.6 155.4 0.6 493.3
Naphtha 357.0 2.5 21.0 339.5
Gasoline 968.0 0.0 134.4 865.0
Kero/Jet 170.0 42.1 33.9 185.0
Gasoil 1,696.4 10.6 5.2 1,705.0
Fuel Oil 373.0 333.4 7.9 705.0
Other 232.0 47.9 44.3 241.0
Product Total 4,135.0 591.9 247.5 4,533.8
Crude Burning 114.0 114.0
TOTAL 4,249.0 591.9 247.5 4,647.8
Note: Gasoil imports include estimates of smuggling.
(kb/d)
21
Historical and Projected Crude Imports toChina and the Share of the Middle East
Year Total Imports Mideast Imports Share of Mideast(kb/d) (kb/d) (%)
1990 58 23 39.51993 313 146 46.71994 247 98 39.71995 342 159 46.61996 455 242 53.21997 709 337 47.51998 536 332 61.91999 732 338 46.22000 1,399 751 53.72001 1,205 677 56.22002 1,325 655 49.42005 1,550 920 59.42010 2,250 1,480 65.82015 3,000 2,125 70.8
Note: 1990-2001 are actual; 2002 is estimated; 2005-2015 are projections.
22
East of Suez Product Flows
23
Mideast Net Exports/Asia-Pacific Net Imports*
(500)
-
500
1,000
1,500
2,000
2,500
3,000
3,500
95 ME
95 AP
99 ME
99 AP
00 ME
00 AP
01 ME
01 AP
02 ME
02 AP
03 ME
03 AP
05 ME
05 AP
08 ME
08 AP
kb/d
HFO/Other Mid Dist
Mogas Naphtha
*excluding LPG
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Mideast Net Exports, 1995-2008
(500)
-
500
1,000
1,500
2,000
2,500
3,000
3,500
1995
1996
1997
1998
1999
2000
2001
2002
2003
2005
2008
tho
usa
nd
bar
rels
/day
NaphthaGasolineMid DistillateFuel Oil
25
Asia-Pacific Middle Distillate Balance
(200)
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000kb
/d
Diesel Imports Kero/Jet Imports
Diesel Exports Kero/Jet Exports
NET IMPORTS
1995 1999 2000 2001 2005
26
Asia-Pacific: Recent Product Balances Asia-Pacific: Forecast** Product Balances
1995 Output Imports Exports Demand 1998 Output Imports Exports Demand
LPG* 805 767 140 1,470 LPG* 976 884 230 1,608 Naphtha* 1,173 740 308 1,585 Naphtha* 1,507 900 276 2,120 Gasoline 2,823 302 255 2,865 Gasoline 3,197 284 295 3,174 Kero/jet 1,693 516 250 1,926 Kero/jet 1,879 463 368 1,982 Diesel 4,541 1,237 696 4,999 Diesel 5,253 1,118 888 5,449 Fuel Oil 3,147 968 646 3,450 Fuel Oil 2,930 1,225 789 3,386 Other 608 163 141 662 Other 705 177 170 737 TOTAL 14,789 4,692 2,435 16,955 TOTAL 16,448 5,052 3,016 18,456 DU Crude 86 352 - 437 DU Crude 133 223 - 356
*nonrefinery LPG: 261 naphtha: - *nonrefinery LPG: 294 naphtha: -
2000 Output Imports Exports Demand 2001 Output Imports Exports Demand
LPG* 1,148 892 192 1,866 LPG* 1,244 827 203 1,902 Naphtha* 1,741 1,128 371 2,441 Naphtha* 1,757 1,123 371 2,511 Gasoline 3,443 382 415 3,386 Gasoline 3,561 349 480 3,428 Kero/jet 2,161 446 409 2,147 Kero/jet 2,210 363 436 2,127 Diesel 5,943 798 729 5,968 Diesel 6,051 784 776 6,082 Fuel Oil 2,765 1,259 642 3,342 Fuel Oil 2,695 1,283 637 3,256 Other 803 211 194 797 Other 783 183 174 795 TOTAL 18,004 5,116 2,952 19,941 TOTAL 18,301 4,912 3,077 20,100 DU Crude 147 184 - 331 DU Crude 142 126 - 269
*nonrefinery LPG: 272 naphtha: - *nonrefinery LPG: 294 naphtha: -
27
Asia-Pacific: Forecast** Product Balances
2002 Output Imports Exports Demand 2003 Output Imports Exports Demand
LPG* 1,273 942 181 2,005 LPG* 1,320 927 176 2,072 Naphtha* 1,758 1,090 329 2,519 Naphtha* 1,759 1,006 216 2,549 Gasoline 3,603 357 473 3,515 Gasoline 3,752 337 457 3,632 Kero/jet 2,157 435 422 2,172 Kero/jet 2,290 411 469 2,232 Diesel 6,036 896 829 6,118 Diesel 6,171 882 799 6,253 Fuel Oil 2,452 1,163 527 3,138 Fuel Oil 2,605 1,196 665 3,136 Other 866 191 171 811 Other 800 173 148 825 TOTAL 18,145 5,074 2,932 20,278 TOTAL 18,697 4,934 2,929 20,700 DU Crude 145 89 - 234 DU Crude 144 90 - 234
*nonrefinery LPG: 296 naphtha: - *nonrefinery LPG: 291 naphtha: -
2005 Output Imports Exports Demand 2008 Output Imports Exports Demand
LPG* 1,425 1,009 185 2,250 LPG* 1,521 1,062 168 2,415 Naphtha* 1,857 1,087 260 2,684 Naphtha* 1,961 1,241 223 2,978 Gasoline 3,985 382 454 3,912 Gasoline 4,127 540 370 4,297 Kero/jet 2,441 357 503 2,296 Kero/jet 2,539 395 506 2,428 Diesel 6,425 959 845 6,538 Diesel 6,720 1,172 777 7,114 Fuel Oil 2,821 1,103 724 3,201 Fuel Oil 2,963 1,221 772 3,412 Other 846 185 170 864 Other 883 190 155 921 TOTAL 19,800 5,082 3,141 21,745 TOTAL 20,714 5,817 2,968 23,565 DU Crude 139 92 - 236 DU Crude 145 87 - 232
*nonrefinery LPG: 339 naphtha: - *nonrefinery LPG: 374 naphtha: -
**1995-2000, actual; 2001-2008, see respective countries.
28
GTL: Is Asia Ready forGTL Premiums?
29
GTL technology has not changed much since 1923, but new catalysts have reduced costs and allowed more flexibility to produce desired fuels.
Given project proposals, some 400 kb/d of GTL diesel could be in the market by the end of the decade.
As a result, many plants look set to take off commercially.
30
Most GTL projects target ultra-low sulfur, high cetane diesel fuels.
Global excitement on GTL has been enormous, but there are serious misconceptions too.
31
Gas-to-Liquids Projects: Current, Possible and Proposed as of August 2002
Existing ProjectsOutput Capacity (b/d)
Mossgas Gasoline and diesel 30,000Shell Bintulu (original-destroyed by fire) Primarily diesel 10,000Shell Bintulu (replacement) Primarily diesel 12,500Sub-Total 42,500
Possible Projects by 2010Output Capacity (b/d)
Sasol/ChevronTexaco Nigeria Primarily diesel 34,000Shell Iran Primarily diesel 75,000Shell Qatar Primarily diesel 75,000ExxonMobil Qatar Primarily diesel 100,000Sasol Qatar* Primarily diesel 34,000Conoco Qatar Primarily diesel 120,000Sub-Total 438,000
Other Proposed ProjectsOutput Capacity (b/d)
ANGTL Alaska Primarily diesel 50,000Shell Argentina Primarily diesel 75,000Syntroleum Australia Lube oil 11,500Shell Australia Primarily diesel 75,000Sasol/ChevronTexaco Australia Primarily diesel 30,000GTL Bolivia Primarily diesel 10,000Syntroleum Chile Primarily diesel 10,000Shell Egypt Primarily diesel 75,000Ivanhoe Energy Egypt Primarily diesel 45,000Sicor Ethiopia Primarily diesel 20,000Rentech Indonesia Primarily diesel 15,000Shell Indonesia Primarily diesel 75,000Statoil Iran Primarily diesel 60,000Shell Malaysia Primarily diesel 75,000Drake Synergy Nigeria Primarily diesel 20,000Ivanhoe Energy Oman Primarily diesel 45,000Ivanhoe Energy Qatar Primarily diesel 185,000Sasol Qatar (possible expansion of *) Primarily diesel 86,250Marathon Qatar Primarily diesel 80,000Shell Trinidad Primarily diesel 75,000PDVSA Venezuela Diesel and lube oil 15,000Sub-Total 1,132,750
32
Are all of these projects really viable?
At $30/b oil everything works.
At $10-12/b oil GTL projects are dead on arrival.
At $18-20/b prospects are uncertain.
Key –
– Gas cost
– Premium for environmentally clean fuel
33
At $18-20/b oil and no premium, projects are only viable if gas cost is $.50-$.75/mmBTU or less.
As a consequence, projects may not be viable in Asia (where gas cost is generally higher) if there is not a substantial premium.– Some have talked of premiums of upwards of $10/bbl
for diesel. We do not believe this for one moment!
Are all of these projects really viable? (cont’d)
34
Will there be a substantial premium? Consider the case of Japan...
Some believe that GTL could command a substantial premium in Japan, but they are probably mistaken.– Although officially diesel sulfur standards are to
change in January 2005, Japanese refiners will start manufacturing 50 PPM diesel this winter and all inventories in the Tokyo metro area will be 50 PPM by April 2003.
– It is expected that 10 PPM diesel will follow, probably well before 2010.
35
Will there be a substantial premium? (cont’d)
Refiners seem set to meet more stringent diesel sulfur standards with additional upgrades and investment.
For a typical refinery the cost of getting from 50 PPM to 10-15 PPM is only approximately $0.75-$1.50/b.
In general, the government provides ample lead time for the refiners to make adjustments, as well as providing subsidies.
36
Thus the economics of GTL diesel versus hydrotreating may not bode well for GTL in the near term.
In the longer term, the move toward a zero sulfur specification may give the best incentive for GTL diesel.
37
Net Imports of Diesel, Asia-Pacific Region
0
100
200
300
400
500
600
1995 1999 2000 2001 2002 2003 2005 2008
kb/d
38
GTL-Key Conclusions
Projects targeting the Asia-Pacific region may not materialize as planned.– Gas costs are relatively high– Premiums may be quite low– Viability depends on oil price
39
GTL-Key Conclusions (cont’d)
The natural home for GTL projects is the Middle East, particularly Iran and Qatar.– Large reserves– Relatively low price
Overall, the introduction of sulfur-free diesel in the E.U. and the U.S. by 2009-2010 may be the best chance for GTL.
40
Middle East Product Trade
41
Middle East: Net Product Exports
0
200
400
600
800
1,000
1,200
1,400
Bahra
inIra
nIra
q
Kuwait
Oman
Qatar
Saudi
Arabia UAE
Yemen
kb/d
1998200020022005
42
Middle East: Net Product Export by Group*
(500)
-
500
1,000
1,500
2,000
2,500
3,000
3,500
1997
1998
1999
2000
2001
2002
2003
2005
2008
*Excluding LPG and Others
kb/d
Fuel Oil Diesel Kero/JetGasoline Naphtha
43
Middle East Total: Recent Product Balances**
1995 Output Imports Exports Demand 1998 Output Imports Exports Demand
LPG* 997 - 753 243 LPG* 1,127 - 843 284 Naphtha* 575 - 530 45 Naphtha* 618 - 556 62 Gasoline 657 31 87 600 Gasoline 676 38 44 676 Kero/jet 674 32 386 321 Kero/jet 696 16 396 324 Diesel 1,382 45 535 893 Diesel 1,445 20 481 982 Fuel Oil 1,230 241 730 761 Fuel Oil 1,417 133 767 784 Other 137 1 44 94 Other 161 4 47 116 TOTAL 5,651 349 3,065 2,957 TOTAL 6,138 211 3,135 3,229 DU Crude 249 - - 249 DU Crude 304 - - 304
*nonrefinery LPG: 860 naphtha: 234 *nonrefinery LPG: 948 naphtha: 216
2000 Output Imports Exports Demand 2001 Output Imports Exports Demand
LPG* 1,213 - 866 348 LPG* 1,282 - 839 443 Naphtha* 701 - 575 126 Naphtha* 745 5 644 106 Gasoline 692 54 30 715 Gasoline 689 82 11 760 Kero/jet 670 12 367 325 Kero/jet 652 - 342 310 Diesel 1,389 32 376 1,045 Diesel 1,470 1 395 1,076 Fuel Oil 1,180 85 607 659 Fuel Oil 1,212 94 566 740 Other 162 4 40 126 Other 109 42 20 132 TOTAL 6,007 187 2,861 3,344 TOTAL 6,159 224 2,816 3,566 DU Crude 315 - - 315 DU Crude 322 - - 322
*nonrefinery LPG: 1,069 naphtha: 229 *nonrefinery LPG: 1,088 naphtha: 229
**2001 balances are preliminary estimates
44
2002 Output Imports Exports Demand 2003 Output Imports Exports Demand
LPG* 1,319 - 817 502 LPG* 1,386 - 817 570 Naphtha* 741 11 640 112 Naphtha* 802 12 675 140 Gasoline 711 94 19 786 Gasoline 834 32 56 810 Kero/jet 684 - 360 324 Kero/jet 905 - 574 331 Diesel 1,554 31 484 1,101 Diesel 1,671 1 560 1,112 Fuel Oil 1,449 65 753 761 Fuel Oil 1,295 43 604 734 Other 128 38 31 136 Other 135 32 28 140 TOTAL 6,587 239 3,104 3,722 TOTAL 7,028 120 3,312 3,836 DU Crude 352 - - 352 DU Crude 345 - - 345
*nonrefinery LPG: 1,107 naphtha: 230 *nonrefinery LPG: 1,263 naphtha: 236
2005 Output Imports Exports Demand 2008 Output Imports Exports Demand
LPG* 1,745 - 972 773 LPG* 1,884 - 1,073 811 Naphtha* 889 - 722 167 Naphtha* 989 - 793 196 Gasoline 1,082 14 240 857 Gasoline 1,237 4 316 925 Kero/jet 938 - 595 343 Kero/jet 1,046 - 698 348 Diesel 1,861 3 714 1,150 Diesel 2,235 - 1,000 1,234 Fuel Oil 1,350 88 636 803 Fuel Oil 1,329 86 549 866 Other 163 21 34 150 Other 163 30 33 161 TOTAL 8,029 127 3,913 4,243 TOTAL 8,883 120 4,462 4,540 DU Crude 351 - - 351 DU Crude 330 - - 330
*nonrefinery LPG: 1,403 naphtha: 264 *nonrefinery LPG: 1,463 naphtha: 277
Middle East Total: Forecast Product Balances
45
Outlook for Margins
46
Base Case Price Forecast(Products Singapore spot; crudes fob; forecast prices in 2002$/b)
1997 1998 1999 2000 2001 2002 2003 2005 2008 2010 2015Arab Light 18.74$ 12.16$ 17.33$ 26.81$ 23.16$ 24.41$ 21.40$ 20.45$ 24.65$ 25.50$ 25.60$ Dubai 18.13$ 12.17$ 17.21$ 26.15$ 22.81$ 24.00$ 21.00$ 20.00$ 24.20$ 25.00$ 25.00$ Minas 19.39$ 12.34$ 17.80$ 28.75$ 24.06$ 24.56$ 22.50$ 22.25$ 26.20$ 26.80$ 27.00$ Tapis 21.03$ 13.82$ 18.84$ 29.74$ 25.33$ 25.38$ 23.60$ 23.50$ 27.70$ 28.50$ 28.85$ Brent 19.10$ 12.74$ 17.86$ 28.39$ 24.46$ 24.96$ 22.50$ 22.25$ 26.45$ 27.25$ 27.50$ WTI 20.61$ 14.41$ 19.26$ 30.30$ 25.89$ 25.93$ 24.20$ 23.85$ 28.05$ 28.90$ 29.25$
Naphtha 21.93$ 14.83$ 19.37$ 28.28$ 23.78$ 24.77$ 22.75$ 22.45$ 27.90$ 29.35$ 30.50$ Mogas (92 RONC) 23.89$ 16.30$ 20.19$ 31.08$ 25.63$ 27.09$ 24.05$ 23.95$ 29.65$ 31.10$ 32.50$ Mogas (95 RONC) 24.55$ 17.20$ 21.01$ 32.51$ 27.50$ 28.28$ 26.05$ 26.05$ 31.90$ 33.35$ 34.90$ Mogas (97 RONC) 25.96$ 17.92$ 21.71$ 33.69$ 28.87$ 29.28$ 27.55$ 27.55$ 33.50$ 34.95$ 36.50$ Kerojet (DPK) 25.04$ 16.37$ 21.42$ 34.27$ 28.31$ 28.43$ 26.05$ 25.25$ 30.85$ 32.25$ 33.25$ Diesel, 0.05% S 25.99$ 17.31$ 20.98$ 34.29$ 29.18$ 28.63$ 26.80$ 25.75$ 31.30$ 32.60$ 33.50$ Diesel, 0.2% S 24.74$ 15.96$ 19.68$ 32.99$ 27.84$ 27.45$ 25.62$ 24.55$ 30.10$ 31.40$ 32.40$ Diesel, 0.5% S 24.24$ 15.46$ 19.13$ 32.44$ 27.29$ 26.85$ 25.05$ 24.05$ 29.65$ 31.00$ 32.00$ HSFO (380 cSt) 15.41$ 10.14$ 14.96$ 22.88$ 19.32$ 20.29$ 18.80$ 18.05$ 21.95$ 22.50$ 22.10$ LSWR 16.94$ 10.99$ 15.49$ 25.73$ 21.83$ 22.88$ 21.05$ 20.05$ 24.20$ 25.00$ 24.60$
Note: Average annual prices; 1997-2001 are actual.
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High, Base and Low Price Forecasts for Dubai, $/b
-
5
10
15
20
25
30
35
40
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Note: Yearly average prices; 1998 - 2001 actual. Forecast prices in 2002$.The base case represents the long-term sustainable path; The high and low cases represent the band (floor and ceiling) within which prices can fluctuate.
X
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-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
1995 1997 1999 2001 2003 2005 2007 2009
Hydroskimming Cracking
* Nominal$ up to 2001 (actual prices), 2002$ thereafter. Cracking yield is based on RCC.
Past and Projected Gross Refining Margins (Arab Light), Singapore Market (US$/b)* X
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Specs and Refining Margins
Historically, Asian margins were the highest, followed by Europe and the U.S., respectively.
In the past few years, the situation has reversed itself, with the U.S. showing the best margins and Asia the worst.
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Specs and Refining Margins
Asian prices for gasoline and diesel fuels are now sharply below those of the U.S., and cracking margins are much lower. Generally, there is an unsustainable and extreme difference between the regions.
Why is there such disparity? The answer is in the product specifications, which has resulted in a globalized jet fuel trade and regionalized gasoil and gasoline markets.
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Specs and Refining Margins
As far as specs are concerned, a decade ago, Asia was divided in three camps:
The rich countries of Asia: Japan, South Korea, Taiwan, which followed the U.S. and Western Europe.
The middle income developing countries of Southeast Asia.
The low income countries: China, Indochina, and India.
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Newly Globalized Product Markets
By 2010, product specifications in Asia, the U.S., and Europe will be very close to each other. The convergence of these product markets has important implications for the product trade.
For the first time, the key markets will have similar specifications, providing the basis for a globalized product markets. This means products will move from one region to another if economics permits.
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