Asia-Pacific to import more oil from Mideast
Asia-Pacific to import more oil from Mideast
MANILA (AFP): Rapid oil consumption and dwindling production in the Asia-Pacific will increase the region's dependency on oil from the Middle East, an industry scholar said here.
Fereidun Fesharaki, director of the resources program of the Honolulu-based East-West Center said the boom the region's economies coincides with the decline in the availability of local, low-sulfur crudes produced by Asia-Pacific nations.
This includes producers like China, Indonesia, Malaysia, India and Australia, he told a regional forum on oil and energy in the Philippine capital.
The Asia-Pacific region in 1993 accounted for 11.3 percent or 6.7 million barrels per day (bpd) of the 59 million bpd produced worldwide and the region contains only 4.5 percent of the global reserves.
The "small" gas and oil resource base however, shows a reserve-to-production ratio of 18 years for the Asia-Pacific region which was far less than the world average of 46 years and Middle East average of 99 years, Fesharaki said.
He said the region's high gross domestic product growth rates, the appreciation of currencies such as the Japanese yen, South Korean won and Taiwan dollar against the U.S. dollar, and the phasing out of price stabilization funds leading to lower prices, were responsible for the rise in demand for energy and oil products.
Asia-Pacific crude production, which will rise to 6.92 million bpd in 1995, will fall to 6.77 million bpd in 2000, then to 6.57 million bpd in 2005 as production drops in Indonesia, Malaysia and Australia after 1997.
Demand
Demand for oil in the region is expected to grow four percent annually from 1994 to 2000 and three percent from 2000 to 2005 as petroleum product demand grows from 16.3 million bpd in 1995 to 22.9 million bpd in 2005 from the current 15.3 million bpd consumed, he said.
"The imbalance of the Asia-Pacific oil supply versus demand will reach such a level that another major Middle East crisis will have a profound impact on the region's oil industry," he said.
Refining investments will be greatly affected by the decline of availability of low-sulfur crudes as Asia-Pacific countries settle for the heavy, sour crudes of the Middle East since new environmental regulations are being proposed, he said.
At present, crude oil imports from the Gulf in the Middle East into the Asia-Pacific region account for 70 percent of supply, and this is expected to rise to 92 percent by 2005, "unless alternative sources for petroleum can be found," Fesharaki said.
"This requires that to pay for the oil, special linkages," between Asia-Pacific and Middle East countries will have to be made, he said adding that "many Asian countries will be investing in the Middle East through other manufacturing activities, where perhaps they could barter for oil."