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Look asia project(english)

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Look asia project(english)

  1. 1. Look Asia ProjectJanuary 2012
  2. 2. AnalysisOil Consumption - World and AsiaOil Production - World and AsiaOil RefineryCrude Oil Export Direction Shift – ColombiaNecessity of The Project from Korea’s StandpointNecessity of The Project from Colombia’sStandpointOutlook for Colombia’s Oil to Access AsianMarket
  3. 3. Oil Consumption - World and Asia World oil consumption and production - 85m b/d (’08) projected to rise to 112m b/d (‘35) – increase of 31%↑ Changing ratio of oil consumption by region between 2008 and 2035  Asia (25%→43%), N. America (24%→27%), Europe (21%→21%)  China occupies 10% of world oil consumption (’08) but is projected to rise 15% (’35)  India projected to have highest annual growth rate of 3.5% of any country (up 1% world) Prospects of Oil Consumption of Asia (’08-’35) (m b/d) Consumption of Oil by Region in 2025 Growth 2008 2015 2025 2035 Rate(%) N. America 7.8 12.1 15.6 16.9 2.9% Asia China (3.8) (8.1) (10.8) (11.6) (4.2%) 25.8% Japan 5.0 4.3 4.7 4.5 -0.4% 38.5% Korea 2.1 2.3 2.4 2.6 0.7% 3.0 3.8 5.7 7.5 3.5% 20.0% India Europe (2.1) (2.8) (4.6) (6.4) (4.2%) Total 13 17.5 22.5 25.1 0.01%Source : IEA (International Energy Outlook, 2011) * ( ) indicates the volume of oil imports Look Asia Project 3
  4. 4. Oil Production - World Oil production by region projected in 2035 - OPEC (47%), N. America and Europe (each 21%) Highest annual growth rate in Mid. America is projected to rise by 2.9% (1% for the world) Estimated growth rate by Vector Error Correction Model (VECM) employing macro historical data  Korea (2.08%), China (4.3%), Japan (-1.7%), India (3.7%), USA (-1.2%) Projection of Oil Production by region (2008-2035) (m b/d) Oil Consumption Trends Annual 16000 2008 2015 2035 growth 14000 China rate(%) 12000 OPEC 35.6 38.6 46.9 1.0% 10000 N. America 15.0 16.7 21.1 1.3% USA 8000 Europe 17.8 18.4 21.0 1.1% 6000 India Asia 8.7 8.6 9.3 0% 4000 Korea Mid. America 7.4 9.1 12.5 2.9% 2000 Japan Others 1.2 1.9 1.2 0% 0 Total World 85.7 93.3 111.2 1% Source : IEA (International Energy Outlook, 2011) Look Asia Project 4
  5. 5. Oil Refinery Ecopetrol of Colombia owns 5 refinery facilities, Barrancabermeja refinery is the biggest producing 250,000 b/d Refinery capacity is 296,000 b/d - refined oil was 291,000 b/d in 2010 (utility ratio is 87%) The capacity over oil consumption is 99% in 2010 and 127% in 2015  Therefore additional oil refinery facility is not required It is planned to expand refinery capacity  Barrancabermeja from 205,000b/d in 2012 →250,000 until 2013  Cartagena from 80,000b/d to 165,000b/d (Unit: thousand b/d) 2008 2009 2010 2011 2012f 2013f 2014f 2015f Oil Consumption 288 279 296 300 307 315 324 331 Refinery capacity 291 291 291 291 336 421 421 421Source: Ecopetrol, BMI
  6. 6. Crude Oil Export Direction Shift - Colombia Shift in export direction from USA to Asia driven by  Stagnant oil consumption in USA and increasing US imports from Canada  Rapid growth of oil consumption in Asia (Korea, China and India) Evidence of shift since 2008  Exports ratio 2008 (USA: 81%, Asia:1%) vs 2010 (USA: 74%, Asia: 9.3%) USA Annual growth rate of 2008 - 2035 0.4% consumption 2008 81% Asia Exports ratio of 2010 74% Colombia’s oil 2035 ? Columbia Korea+China+Japan+India Annual growth rate of 2008 - 2035 2.1% consumption 2008 1% Exports ratio of 2010 9.3% Colombia’s oilLook Asia Project 2035 ? 6
  7. 7. Outlook for Colombia’s Oil to Access Asian Market Predicted that oil production increase from 786,000 b/d (2010) to 1,000,000 b/d (2015) Identified oil reserves 6.7 billion barrels in Llanos and Putumayo basins Possible production of oil 980,000 b/d (2012) Plan to construct Pacific Pipeline • 1,400km from Llanos basin to Tumaco port • Pipeline capacity 450,000 b/d 2010 2012 2015 2020 2025 2030 NE Asian Imports 1,355.4 1,511.4 1,773.0 2,081.0 2,329.9 2,597.6 Increasing Rate 156 417.6 725.6 974.5 1,242.2 Share (%) 28.8 10.8 6.2 4.6 3.6 Unit : 10,000 b/d
  8. 8. Necessity of The Project from Korea’s Standpoint Korea, is ranked 5th in the world importation of oil and necessary to engage in exploration overseas • Too high dependency of oil imports from Middle East (82%) → Need to diversify • Policy for an oil hub of East Asia with favorable ports and oil reserves facilities • Perception of Korean Gov’t on overseas oil development → Strong policy drive of the Gov’t  Advantage of oil hub in East Asia(China,  Lack of investment experience in South Japan and India) America  Appropriate oil logistics  Expensive transport cost due to long infrastructure(storage facility and ports) distance  Know-how of overseas infrastructure S W construction) O T  High growth of oil demand in East Asia  Large-scale overseas’ oil development of  Need for oil imports diversification China  Increasing interest of Colombia in oil  Continuous instability of socio-politics of exports to Asia South America Diversification of Oil Imports and Development of Overseas’ Oil
  9. 9. Necessity of The Project from Colombia’s Standpoint  Colombia ranked 4th in South America in terms of oil production • Abundant oil reserves (1.9 billion barrels) only 20% of total territory explored • Pursuing strong policy for oil industry as a core industry with high growth rate • Growing interest in in exporting oil to Asia market due to decline in oil exports to USA  High economic growth rate (6% since 2009)  Unstable domestic security  Abundant oil resource (1.9 billion barrels)  Delay in project process due to complicated  Strong policy for oil industry assessment  Growing interest in exporting to Asian market  Demand of Consortium with local companies  Difficulties in financing S W O T  Expanded investment in infrastructure due to  Intermittent guerrilla attacks on oil infrastructure political stability  Frequent earthquakes in Andes mountains  Abundant investment capital due to increasing infra fundsInfrastructure Establishment for Diversifying Exports Countries

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