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SINGAPORE, NOVEMBER, 29: The Pacific Basin oil market is poised for its biggest wave of new regional crude in a decade but it will be a last-gasp effort far too meagre to offset waning output from other fields in their sunset years.
The fading profile of Asian oil will be cushioned by a slug of new crude from eastern Russia as well as a potential doubling in output of condensate, the ultra-light oil being unlocked by developing the region's many untapped natural gas finds.
Oilfields producing more than 100,000 barrels per day (bpd) in Australia, Malaysia and India are due to come onstream in the next two years, a small share of global new production but a hefty volume for a region that has been mostly wrung out.
Asia now produces just under 10 per cent of the world's oil, but consumes about 30 per cent of it.
While these fields in theory provide more competition to rising imports from Africa and the Caspian -- the nearest sources of the light, sweet crude preferred by most refiners -- they are unlikely even to balance the loss of output from the rapidly ageing fields in countries such as Australia and Indonesia.
"It will slow down the overall decline, but it won't be enough to prevent it," said Noel Tomnay, Principal Consultant with Wood Mackenzie in Singapore.
China, the biggest producer in Asia and the sixth-largest globally, has raised output by 4.3 per cent so far this year to about 3.6 million bpd, mostly from new production in the Bohai Basin. All but a small share is consumed domestically.
But analysts say output may plateau in the next few years and will lag demand growth, pegged at 6.5 per cent or 430,000 bpd next year -- enough to swallow output from nearly every new Asian oilfield due to start up in 2006 and 2007.
In all, new Asia-Pacific fields will pump some 250,000 bpd of crude next year and 300,000 bpd the year after, a Reuters survey found, a meagre contribution to the startup of more than 3 million bpd of new fields worldwide.
Total oil production in Asia -- excluding Russia -- will fall from around 7.5 million bpd in 2005 to 7.2 mn bpd in 2008, said Wood Mackenzie's Tomnay.
FRESH OIL
Australia's Woodside Petroleum Ltd. will bring onstream its Enfield oilfield in October next year at around 100,000 bpd. This will be followed by US independent Murphy Oil Corp.'s 120,000-bpd Kikeh field in Malaysia in 2007.
Both of those will likely hit the export market, providing refiners with new supply options.
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