East Timor Oil and Gas Report Q2 2016
BMI View: Timor-Leste is set to experience declining crude oil and natural gas production over the nextdecade as its two producing fields remain in decline. Additionally, the small domestic market size makes ituneconomical to build a refinery in the country, which will result in rising refined fuels imports over thecoming years.Latest Updates and Key Forecasts
We maintain our exploration outlook this quarter, with limited upside risk to exploration given limitedactivities in the Timor-Leste Exclusive Area (TLEA) and the current stand-off between Australia andTimor-Leste regarding the territorial arrangements in the area.
Timor-Leste's crude oil production will remain on a gradual decline through our forecast period to 2025.A slowdown in exploration in the Joint Petroleum Development Area (JPDA) and territorial dispute overthe highly prospective Greater Sunrise fields weighs on the country's long-term oil production potential.
Timor-Leste's natural gas production is set to fall by 31.5% over the next 10 years, as natural declinesoutpace efforts to sustain production at the existing field. Commercialisation of resources at the GreaterSunrise fields poses a limited upside risk to our forecasts, though development remains in a stalemateowing to major disputes with Australia and several international firms.
We forecast refined products consumption to grow over the next decade on the back of a fast-growingeconomy - rising from 1,610b/d in 2015 to 2,930b/d in 2025.
Crude oil net exports will decline throughout our forecast period, in line with production declines. Weforecast Timor-Leste's refined fuels imports to remain on an uptrend over the next decade to meetgrowing domestic demand for gasoline and diesel from the power and the autos sectors.
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