The International Energy Agency expects Southeast Asia's crude oil demand to rise by over 50% in the next 20 years, resulting in a tripling of its oil import bill to some $240 billion by 2035.
In its Southeast Asia Energy Outlook report released Wednesday, the IEA said that oil demand in the region -- which covers the 10 member countries in the Association of Southeast Asian Nations -- is now at 4.4 million b/d, accounting for 37% of the primary energy mix.
This is expected to rise to 5.4 million b/d in 2020 and will hit 6.8 million b/d by 2035, representing almost one-fifth of the growth in global demand, the IEA said.
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Oil demand in Indonesia -- ASEAN's largest energy consumer -- will rise from 1.5 million b/d in 2012 to 2.1 million b/d in 2035; in Thailand, demand is expected to rise from 1 million b/d in 2012 to 1.6 million b/d in 2035; in Malaysia, from 600,000 b/d to 850,000 b.d; and in the Philippines from 270,000 b/d to 600,000 b/d, the IEA said.
Most of the growth will come from the transport sector, where energy demand will likely double over the 2011-2035 period across Southeast Asia due to rising incomes, low and subsidized oil product prices, and in some areas a lack of public transport.
Oil will meet 90% of Southeast Asia's transport demand by 2035, the IEA said. DWINDLING RESERVES AND PRODUCTION
On the other hand, the region only has 12.9 billion barrels of crude oil reserves remaining, which at current levels of production would sustain output for just 14 years, the IEA said.
Vietnam and Malaysia together have 8.4 billion barrels of proven crude oil reserves while Indonesia has 2.7 billion barrels.
Crude oil production has fallen from a peak of 2.9 million b/d in 1996 to 2.5 million b/d last year and is expected to fall to 1.7 million b/d by 2035 due to field declines and limited new discoveries in the upstream, the IEA said.
Indonesia will still remain the region's largest oil producer, although output is expected to fall significantly from 889,000 b/d last year to 668,000 b/d by 2035, while Malaysia will see output decline from 674,000 b/d in 2012 to 419,000 b/d in 2035. Thailand's oil output is expected to slide the most, falling 67.4% from 393,000 b/d in 2012 to 128,000 b/d in 2035.
The IEA said the one bright spot is Myanmar, which may have the potential to produce more crude oil as it is relatively under-explored.
GROWING RELIANCE ON IMPORTS
As a result, Southeast Asia's net oil imports will rise from the current 1.9 million b/d to 5.1 million b/d by 2035. This will result in a near doubling of its oil import dependency to 75% from 44% today, while its import bill will balloon from $77 billion currently to almost $240 billion, equivalent to almost 4% of GDP, it said.
The IEA added that Southeast Asia will then become the fourth-largest net importer of oil, behind only China, India and the European Union. In particular, Thailand and Indonesia's spending on net oil imports will reach nearly $70 billion each in 2035.
Thailand's net oil imports will rise to 1.5 million b/d by 2035, from 600,000 b/d last year while Indonesia's net imports are likely to increase from 600,000 b/d last year to 1.4 million b/d by 2035, accounting for 70% of its total demand, according to the IEA.
The IEA based its estimates on a crude price forecast of $128/b in 2035 with ASEAN GDP per capita rising 3.7% annually to almost $8,700.
--Song Yen Ling, firstname.lastname@example.org
--Mriganka Jaipuriyar, email@example.com
--Edited by E Shailaja Nair, firstname.lastname@example.org