SPC S PETROLEUM ADVISORY SERVICES Pacific Energy Advisory Group meeting Pritanshu Singh 10-13 th December
Presentation Outline SPC s role in the Petroleum sector Movement of Asia Pacific Tapis Crude. Issues Affecting the Price of Crude Oil SPC s Current Petroleum Activity with PICT Developments in 2013
SPC s role in the Petroleum Sector Provides petroleum data and advisory services to Pacific Island Countries for efficient use of fuel. Strengthening the existing petroleum database of PIC s (Demand/Supply). Assist regulators in PIC s to monitor price control instruments. Harmonize Fuel standards Technical assistance to regulators for review of policies
OVERVIEW GLOBAL PETROLEUM MARKET In 2008, Crude oil provided 34% of Worlds Energy needs. International Energy Agency Projects crude oil will provide 30% of worlds energy mix in 2030
Consumption World - 82,000,000 barrels per day Pacific - 40,000 barrels per day Fiji - 11,000 barrels per day PNG - 20,000 barrels per day Source: 2009 - SPC Petroleum Database
REFINERY ULCCVLCC / LCC OIL EXTRACTION MR TANKERS END USERS FUEL DEPOTS TRANSFER OF FUEL BY TRUCKS / PIPELINES
Issues Affecting the Price of Crude Oil
Asia Pacific/ Middle East Spot Crude 1. Cossack 11. Kikek 2. Gippsland 12. ESPO 3. Tapis 13. Miri Light 4. Belida 14. Labuan 5. Kutubu 6. Handil Mix 7. Attaka 8. Vityaz Blend 9. Ardjuna 10. Sokol
180.000 160.000 Tapis Crude Oil Spot Price Global Financial Crisis US$ per Barrel 140.000 120.000 100.000 80.000 Gulf War Lack of OPEC Action Series of OPEC Cuts Iraq War 60.000 40.000 20.000 0.000
Traditional Factors Driving Oil Prices Seasonal Weather Cold Winters can result in higher heating Severe weather events Hurricane Sandy, Japan Tsunami Oil Supply or Demand Changes U.S. Commercial Crude Oil Inventory Levels OPEC Decisions. Refinery Infrastructure. Marginal cost of production
Emerging Factors Driving Oil Prices Asian Oil Demand Sharp rise in demand for oil from China and other Asian countries since 2000. Economical Euro Zone Crisis, decrease in demand for oil from Europe, causes an excess of supply in supplier countries. Geopolitical Events Instability in oil producing countries causes oil prices to rise. The Declining Value of the U.S. Dollar Oil is priced in U.S. dollars and changes in the value of the U.S. dollar influences crude oil prices.
Context: Extreme Petroleum Dependency in the Pacific PICs exlcuding PNG & Fiji 99% Pacific Islands Countries 95% Caribbean 80% Asia Pacific 45% World 34% 0% 20% 40% 60% 80% 100% 120% Source: International Energy Agency (2009) & ADB Report (2009)
Petroleum Fuel end-use in PICs Electricity DIESEL GENERATOR 25% Transport LAND, AIR & SEA 75% 0% 20% 40% 60% 80%
SPC s CURRENT PETROLEUM ACTIVITY WITH PICT
Petroleum Pricing Support 1. Monthly Fuel Price Verification to Fiji and Solomon Islands. 2. Extensions of Monthly pricing support to 16 PICTS ; Cook Islands, Nauru, Niue, Tonga and Tuvalu. 3. Annual/ Triennial Review of Petroleum and LPG Pricing Template for TONGA. 4. Assist regulators in PIC s to monitor price control instruments. 5. Provide technical assistance to regulators to review and Harmonize Fuel standards. 6. Assist PIC s in reviewing Petroleum policies.
Current work: Review of Solomon Islands National Energy Policy Petroleum Policies and Strategies. Advisory to Technical working group set up to review Fiji s Trade Fuel Standards Advisory to PICT s on Platts Gasoil Assessment Change and its impact on PICT s. Pacific Fuel Price Monitor
Figure 01: Regional Retail Prices - Diesel (ADO) & Mogas (Petrol) - December 2009 200 180 700 US cents per litre 160 140 120 100 80 600 500 400 300 60 40 20 200 100 0 0 American Samoa Cook Islands (Raratonga) Fiji French Polynesia FSM - Kosrae Kiribati Marshall Islands Nauru New Caledonia Niue Palau Papua New Guinea Samoa Solomon Islands Tokelau Tonga Tuvalu Vanuatu US cents per Gallon Mogas Diesel Average Pacific Mogas Price Average Pacific Diesel Price
Fuel Quality in PICs Type of Fuel Grades Countries Unleaded Petrol (Mogas) Gasoline 97 unleaded Gasoline 95 unleaded Gasoline 92 unleaded Aust/NZ Kerosene/Jet Dual Purpose Kerosene All PICs Gasoil (Diesel) Gasoil 10 ppm Gasoil 50 ppm Gasoil 500 ppm Gasoil 2500 ppm Gasoil 5000 ppm Fiji and most PICs Aust/ NZ French Territory Fiji (looking at adopting Euro IV, January 2013) American Samoa Small Is States e.g. Tuvalu Fuel Oil Heavy Sulfur Fuel Oil Fiji Electricity Authority Waste Oil - Fiji & Nauru
Developments in 2013 Fiji Trade fuel standards Fiji will be adopting Euro IV emission standards from January 2013; (From Diesel 500ppm to Diesel 50ppm). This will be applicable to use of diesel in Fiji only. However Fiji will still be able to import, store and re-export to PICT s 5000 and 500ppm diesel. Platts Gasoil Assessment Change Platts a McGraw Hill Publishing company will stop assessing Gasoil/Diesel 5000ppm from January 2013. This will have an impact on countries importing 5000ppm such as Tuvalu and Tonga as there will be no published data for price verification of 5000ppm diesel.
THANK YOU
PRITANSHU SINGH [Ms] Assistant Petroleum Officer Economic Development Division [EDD] Secretariat of the Pacific Community [SPC] - Suva Regional Office Postal Address: Private Mail Bag, Suva, Fiji Islands Street Address: 3rd. Floor Lotus Building, Nabua Tel: +679 3379404 Fax: +679 3370146 Email :pritanshus@spc.int singhpritanshu25.com (for files > than 2mb Website: www.spc.int