In terms of natural gas, in 2010 the region is expected to have 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. Japan's share of gas consumption in 2010 was an estimated 17.97%, while it provides no meaningful share of production. By 2015, it is expected to be consuming 13.89% of the region's gas.
Preliminary data suggest that the 2010 full year outturn was US$77.38 per barrel (bbl) for OPEC crude, which is expected to have d rc helicopter and car market place elivered North Sea Brent and West Texas Intermediat dodge ry/alfa-romeo">alfa romeo e averages of around US$79.40/bbl. The BMI price target of US$77 was reached thanks to the early onset of particularly 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.
Japanese real GDP is assumed by BMI to have increased by 2.9% in 2010, and we foresee average annual growth of 1.5% in 2010-2015. There is little domestic upstream activity, with local state and private firms concentrating on international exploration efforts. The outlook for domestic oil and gas production therefore remains poor. Oil consumption is forecast to fall between 2010 and 2015, implying demand of 4.13mn b/d by the end of the forecast period. The country should be consuming almost 90bcm of gas by 2015, all of which will be imported in the form of liquefied natural gas (LNG).
Between 2010 and 2020, we are forecasting a reduction in Japanese oil consumption of 7.95%, with demand slipping steadily to the end of the period and the country using 4.05mn b/d by ferrari 2020. Gas consumption is expected to rise from an estimated 88.5bcm in 2010 to 91.2bcm by 2020. All of Japan's gas will continue to be imported in the form of LNG. Details of BMI's 10-year forecasts, which provide regional and country-specific projections, can be found to the rear of this report.
Japan now shares eighth place with Indonesia and Pakistan in BMI's composite Business Environment (BE) league table. The country ranks 11th, behind Thailand, in BMI's updated upstream Business Environment ratings, thanks to a virtual absence of hydrocarbon resources. The score reflects the limited involvement of the government in upstream oil activities and an exceptionally healthy country risk profile, which counter the lack of reserves and output growth potential. Japan holds third place, above Singapore, in BMI's downstream Business Environment ratings, reflecting its high levels of oil and gas consumption, increasing gas demand and the established modern refining capability. However, it is held back by a high level of retail site intensity and a poor oil demand growth outlook.
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