The Asian Pacific area is set to become more dependent upon Middle East crude oil over the next 15 years, according to a forecast by Fereidun Fesharaki of the East-West Centre in Honolulu.
The prediction comes as Saudi Arabian Petroleum & Mineral Resources Minister Hisham Nazer completed a groundbreaking tour of four leading Asian economies which has raised the prospect of Saudi joint venture oil projects with China.
Fesharaki forecast Asian crude oil output would hold steady at about 7 million barrels a day (b/d) from 1995. It would fall to 6.6 million b/d by 2000.
Crude available for export from the region would drop to 1.7 million b/d in 1995 compared with 2.2 million b/d in 1994. By 2000, the figure would be about 1 million b/d.
China is expected to become a net crude oil importer by the end of 1994. Indonesia would fall into the same category later in the 1990s.
The Asia-Pacific area’s dependence upon crude oil is forecast to rise to 59 per cent in 1995 and 67 per cent by 2000. By that time, the Gulf area would account for more than 93 per cent of the region’s import needs, unless other oil sources were located.
Fesharaki forecasts that Asian gas demand could rise to 4.8 million barrels of oil equivalent a day in 2000. The figure, which excludes demand in China, compares with Asian gas consumption of 2.7 million barrels of oil equivalent a day in 1992. The region’s natural gas reserves are just 9 per cent of the world total.
Fesharaki forecasts that Japan would remain the world’s largest liquefied natural gas (LNG) consumer. Demand is set to rise to as much as 70 million tonnes by 2010. Demand in South Korea could rise to 10 million tonnes by 2000. Total regional demand could exceed 100 million tonnes by the start of the new century.
Fesharaki forecasts that a serious LNG supply gap would emerge in 2005- 2015. More than 25 million tonnes of new capacity would be needed to meet LNG demand in 2010.
The rising tide of Asia demand is the motivating force behind Saudi Arabia’s new overture in the region. In a visit at the end of May, Nazer visited The Philippines, China, South Korea and Japan. Saudi Arabia confirmed the acquisition of 45 per cent of The Philippines’ leading oil refiner and distributor in February. It has a shareholding in South Korea’s largest refiner and Chinese officials say that Saudi Aramco plans to take a 40 per cent stake in a new refinery in China. Nazer was also expected to call for a revival of plans for joint-venture oil refineries with Japan during his visit to the country (see Saudi Arabia).