"Taiwan Oil & Gas Report Q2 2011" is now available at Fast Market Research

PRLog (Press Release)– Mar 19, 2011– The latest Taiwan Oil & Gas Report from BMI forecasts that the country will account for 3.67% of Asia Pacific regional oil demand by 2015, while making no meaningful contribution to supply. Regional oil use of 21.42mn barrels per day (b/d) in 2001 reached an estimated 27.28mn b/d in 2010, and will then rise to around 30.80mn b/d by 2015. Regional oil production was around 8.35mn b/d in 2001, and averaged an estimated 8.82mn b/d in 2010. It is set to increase slightly to 8.85mn 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 13.07mn b/d. This total rose to an estimated 18.46mn b/d in 2010 and is forecast to reach 21.96mn 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 consumed 493bn cubic metres (bcm) and demand of 647bcm is targeted for 2015. Production of an estimated 412bcm in 2010 should reach 548bcm in 2015, implying net imports rising from around 81bcm to 99bcm. This is thanks to many Asian gas producers being major exporters. Taiwan's estimated share of gas consumption in 2010 was 2.35%, while its share of production is minimal. By 2015, its share of g chrysler as consumption is forecast to be 2.14%.

Preliminary data suggest that the 2010 full year outturn was US$77.38 per barrel (bbl) for OPEC crude, which is expected to have delivered chevrolet North Sea Brent and West Texas Intermediate (WTI) averages o acura f around US$79.40/bbl. The BMI price target of US$77 was reached thanks to the early onset of particul cadillac arly cold weather, which drove up demand for and the price of heating oil during the closing weeks of the year. The oil market is now in a bullish mood, in spite of the economic uncertainty facing the world in 2011.

Global GDP growth in 2011 should exceed 3%, but is unlikely to match the level seen in 2010. Slower economic expansion in China and Japan is set to undermine a potentially unchanged rate of growth in the US and eurozone. Oil prices seldom reflect underlying macroeconomic trends, but the case for surging energy demand and spiralling fuel costs is far from convincing. Ample oil inventories and increasing OPEC supply are likely to keep the price of crude in check - and we are sticking with our forecast of an average US$80/bbl for the OPEC basket.

The 2010 rise in Taiwanese real GDP is estimated by BMI to have been 9.0%, with average annual growth of 5.1% forecast in 2010-2015. State-owned CPC has been given the task of securing oil and gas supply, but has no significant domestic volumes to contribute. Oil consumption beyond 2009 is forecast to increase by around 2.0% per annum to 2015, implying demand of 1.13mn b/d by the end of the forecast period. Gas usage is expected to rise from the estimated 2010 figure of 11.6bcm to 13.8bcm by 2015, supplied largely by liquefied natural gas (LNG) imports.

Between 2010 and 2020, we are forecasting an increase in Taiwan's oil consumption from an estimated 1.02mn b/d to 1.25mn b/d, with the country's refining capacity rising from an estimated 1.20mn b/d to 1.31mn b/d. Gas demand is expected to rise from an estimated 11.6bcm in 2010 to a possible 15.3bcm by 2020, met largely by LNG imports. Details of BMI's 10-year forecasts, which provide regional and country-specific projections, can be found at the end of this report.

Taiwan takes 15th and last place in BMI's composite Business Environment (BE) league table, lagging well behind Hong Kong and South Korea. Taiwan also ranks 15th and last in BMI's updated upstream Business Environment ratings, thanks to a virtual absence of hydrocarbon resources. The score reflects the total control of the government over upstream oil activities and a healthy country risk profile, the latter offsetting partly the lack of reserves and output growth potential. The country is last in BMI's downstream Business Environment ratings, some distance behind nearest rivals Malaysia and Papua New Guinea (PNG). The poor showing reflects its high level of state involvement, relatively high retail site intensity, and modest oil and gas demand growth outlook.

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