BMI View: Even as sustained weakness in global crude prices provide some near-term support to refining margins, conditions will remain challenging for the South Korean refiners due to faltering domestic demand, rising competition in the regional fuels exports market and a sharp slowdown in Chinese demand for fuels imports from Korea. We highlight that South Korea remain at risk of an LNG oversupply, as subpar economic performance and continued energy diversification in the power sector could undermine the country's ability to consume all of its contracted LNG volumes over the coming years.
|e/f = BMI estimate/forecast. Source: KNOC, EIA, BMI|
|Crude, NGPL & other liquids prod, 000b/d||20.0||19.6||19.2||18.8||18.4||18.4||18.1|
|Dry natural gas production, bcm||0.4||0.2||0.1||0.1||0.0||0.0||0.0|
|Dry natural gas consumption, bcm||47.8||45.4||44.9||44.5||44.0||43.6||43.4|
|Refined products production, 000b/d||2,821.1||3,068.6||3,099.3||3,130.3||3,145.9||3,177.4||3,193.3|
|Refined products consumption & ethanol, 000b/d||2,259.9||2,351.9||2,360.0||2,368.2||2,376.3||2,384.3||2,392.2|
Latest Updates And Key Forecasts
We do not expect any additions to South Korea's current refining capacity of 3.0mn b/d within the next decade, as rising competition in the exports market and tightening conditions in the domestic market limit scope for major expansion campaigns.
The Middle East will remain the country's largest supplier of crude oil, though the government is actively trying to diversify its crude sources. The government's decision to offer freight incentives to cargoes originating from regions other than the Middle East will provide opportunities for suppliers in Europe, West Africa and Latin America to increase their market share.
Asia-Pacific continues to absorb the bulk of South Korea's refined fuels exports, accounting for about 80.0% of total exports in 2015. Rapid cutback in domestic refining capacity has propelled Australia to become Korea's second largest refined fuels trade partner, while sluggish economic performance and faltering fuels demand has led China to slip to the position of fourth, from second previously.
The availability of cheaper power sources such as nuclear energy and even coal has weighed on Korea's demand for LNG over 2014-2015, a trend we see remaining in play over the next decade. Long-term growth will also be hindered as the government seeks to incorporate greater renewables energy into its power mix.
The South Korea Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for South Korea including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, national and multinational companies and changes in the regulatory environment.
BMI's South Korea Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Korean oil and gas industry.
- Benchmark BMI's independent oil and gas industry forecasts for South Korea to test consensus views - a key input for successful budgeting and strategic business planning in the Korean oil and gas market.
- Target business opportunities and risks in the Korean oil and gas sector through reviews of latest industry trends, regulatory changes and major deals, projects and investments in South Korea.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity) and Competitive Landscape Tables.
BMI Industry View
Summary of BMI’s key forecasts and industry analysis, covering oil and gas reserves, supply, demand and refining, plus analysis of landmark company developments and key changes in the regulatory environment.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the upstream and downstream sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecast:
- Pricing: Oil price (USD/bbl, WTI, Brent, OPEC basket, Urals); oil products prices (unleaded gasoline, gasoil/diesel, jet/kerosene – USD/bbl) at global hubs.
- Production, Consumption, Capacity & Reserves: Proven oil reserves (bn barrels), production, consumption, refinery capacity and throughputs (‘000b/d); proven gas reserves (tcm), production and consumption (bcm) and fuels trade.
- Imports & Exports: Crude oil exports/imports (‘000s b/d) and value of crude oil trade in USD. Fuels exports/imports (‘000s b/d) and value of fuels trade in USD. Natural gas imports/exports (bcm), by pipeline and/or LNG, and value of natural gas trade.
BMI’s Oil & Gas Risk Reward Index
BMI’s Risk Reward Indices provide investors (independents, NOCs, IOCs, oil services companies) looking for opportunities in the region with a clear country-comparative assessment of the upstream and downstream market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A profile of the upstream and downstream sectors, including analysis of reserves, output, consumption and trade of energy products; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.
Comparative company analyses by USD sales, % share of total sales, number of employees, year established, ownership structure, oil production (‘000b/d), gas production (bcm), downstream capacity (‘000b/d) and % market share.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Regional perspective on size and value of the industry. Plus comparative rankings by production, refining, imports and exports of oil, gas and LNG.
Global Oil Market & Oil Products Outlook
Based on our country coverage of over 99% of global oil and gas production and consumption, BMI provides demand, supply and price forecasts to end-2024 for oil, gas and oil products.
The Oil & gas Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.