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New licensing rounds could lead to a sharp rise in upstream investment, helping to drive long-term growth in reserves and production. However, high oil prices are likely to ensure the country's oil import bill remains high even as efficiency drives slow demand growth. Rising natural gas demand in the second half of the decade could see the Philippines import its first LNG cargo; however, until a FID is made on an import terminal, BMI will not factor this development into its current forecasts.
The main trends and developments we highlight for the Philippines' Oil & Gas sector are: - In the near term, the Philippines's total gas production will be determined not by field capacity, which is substantial, but by the available market for the fuel. The development of the Malampaya gas field, located 80km off the coast of Palawan Island, has been managed so supply can be sent to purpose-built power stations, and the main demand driver over the near-to-medium term will, therefore, be the domestic electricity sector.
- Over the longer term, there is clear potential for growth in consumption of Filipino gas, but the customers and infrastructure are not yet in place, so we are assuming demand will only grow gradually to 6.59bn cubic metres (bcm) by 2021. If plans to build a liquefied natural gas (LNG)- power hub do progress to a final investment decision (FID) then BMI will adjust its forecasts to take this extra demand potential into account.
- Liquids production growth will be driven by higher condensate and natural gas liquids (NGL) volumes from the Malampaya gas project and by the Galoc phase II development, which is set to add between 4,000 and 6,000 barrels per day (b/d) by 2014. Total liquids output will, therefore, rise from an estimated 33,000b/d in 2012 to 39,000b/d in 2016.
- We estimate that oil demand will be 305,000b/d in 2012, rising to 312,000b/d by 2016. The implied oil import trend indicates a slight rise from an estimated 272,000b/d in 2012 to some 274,000b/d in 2016.
At the time of writing we assume an OPEC basket oil price for 2012 of US$111.47/barrel (bbl), falling to US$107/bbl in 2013. Global GDP in 2012 is forecast at 3.2%, up from an assumed 3.1% in 2011, reflecting a faltering recovery in the US and uncertainty with regard to the eurozone debt situation. For 2013, growth is estimated at 3.7%.
Click for Report details:Philippines Oil and Gas Report Q3 2012