Just Released: "Vietnam Oil & Gas Report Q4 2012"

Fast Market Research recommends "Vietnam Oil & Gas Report Q4 2012" from Business Monitor International, now available

by Bill Thompson

(WireNews+Co) - Boston, MA - 26 October 2012

Oil output will remain fairly steady over the next five years as production from new developments offsets declining volumes at the flagship Bach Ho field. We expect oil output to peak in 2013, at 371,000b/d, before declining rapidly to just 309,000b/d by 2021. Given that demand is set to rise in line with strong economic growth, Vietnam is set to become a growing importer of oil. New developments are set to boost long-term gas production to 15bcm by 2016 but rapid consumption growth will necessitate LNG imports from 2015.

The main trends and developments we highlight for Vietnam's Oil and Gas sector are:

- New production from the Te Giac Trang (White Rhino), Dai Hung (Big Bear) and Chim Soa (Blackbird) developments will help offset declines at the flagship Bach Ho field. These projects will drive production growth to a new peak of peak at 371,000 barrels per day (b/d) in 2013, up from 326,100b/d in 2011, according to EIA estimates.
- Consumption growth is likely to slow in 2013 and 2014 following a 4% increase in the government's fuel price cap. We anticipate oil demand of 380,600b/d in 2012, rising to 411,000b/d by 2016.
- BMI estimates gas production will rise from an estimated 8.3bcm in 2012 to 12.23bcm by 2016. Despite the increase, demand will outstrip supply from 2015, with up to 1.38bcm of net imports expected in that year. By 2021, net imports of gas could hit as much as 5.52bcm, all in the form of LNG.
- Oil and gas reserves could rise if new exploration gathers pace following the conclusion of the country's latest licensing round. However, ongoing risks from vigorous Chinese opposition to drilling in the disputed South China Sea could delay drilling yet again. We have therefore kept our reserves forecasts unchanged at 4.4bn barrels (bbl) and 620bn cubic metres (bcm) for 2012.
- The development of Vietnam's refining industry is advancing, albeit at a much slower pace than initially expected. The development of the Dung Quat refinery could raise capacity to more than 200,000b/d by 2016. We also anticipate that the Nghi Son refinery will be the first new project to come onstream, with a targeted start date of 2015/2016. Vietnam's refinery developments will preserve valuable light sweet domestic crudes for export, while allowing for the processing of cheaper heavier foreign grades for domestic consumption.

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At the time of writing we assume an OPEC basket oil price for 2012 of US$107.05/bbl, falling to US$99.10/bbl in 2013. Global GDP in 2012 is forecast at 2.6%, down from an assumed 3.1% in 2011, reflecting a faltering recovery in the US and a poor eurozone outlook due to the ongoing sovereign debt crisis. For 2013, real global GDP growth is estimated at 3.1%.

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