Thai Oil chief sees possible oil shortage in next 3-4 years

BANGKOK: -- Thailand might experience a refined oil shortage in the next 3-4 years should local demand continue to increase by at least 5% annually and no new refinery be built in that period, according to an industry executive.

Piti Yiemcharoen, President of Thai Oil Plc, said daily refining capacities of all refineries in Thailand now stood at around 1 million barrels. Actually, they could refine 900,000 barrels of oil per day while the local consumption totals more than 800,000 barrels per day.

It is estimated that the local oil demand would increase by 40,000 barrels annually if the consumption grew 5% a year. That meant the fuel demand would rise to 200,000 barrels in the next five years. Usually, the local oil consumption would rise 6-7% per annum.

Under the assumption, the refining capacities of all refineries plant would not be enough for the local consumption in the next 3-4 years.

Mr. Piti said an establishment of a new oil refinery usually required total investment of hundreds of billion bath. Worse still, most potential investors viewed investment in other businesses is more worthwhile. So, it is almost impossible the investors would opt to invest in building refineries.

What existing refineries could do now is to increase refining capacities instead of building new ones. For Thai Oil, the refining capacity is set to increase by 55,000 barrel a day in the next two years.

He said a return rate for the construction of a new refinery that is worth investment should be at 15% while the current refining margin stays at US$6 per barrel, which is considered a low return.

To get the return rate of 15%, refineries would have to enjoy the refining margin of $9-10 per barrel. So, it is rather difficult for potential investors to make a decision on the investment.

The Thai Oil chief projected crude prices would hover at the current level in the second half of this year with those in Dubai standing at %50-55 per barrel.

He said he did not believe the crude prices would rise to $100 per barrel as many feared in that period.

--TNA 2005-08-16

Thai Oil chief sees possible oil shortage in next 3-4 years 

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Seems to me he is more worried about the capacity of Thai refineries. Guess the journalist didn't understand what he was talking about. Besides, if Thailand doesn't have the capacity to refine oil, it will simply have to import the refined products in addition ot crude oil.

There will never be a shortage of oil. There is no shortage of diamonds or gold - it is just that these commodities are very expensive. In a free economy, prices will follow supply & demand.

So a global oil shortage - never. That oil one day will be too expensive to use as a fuel - that is almost a certainty. When that will happen - now that's the big question......

So a global oil shortage - never.  That oil one day will be too expensive to use as a fuel - that is almost a certainty.  When that will happen - now that's the big question......

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100 usd... not if but when... not to poke fun when a man gets caught "short" it's not a pretty sight- but seems harmonica rcvd a wedgy recently...

Alternative fuels, bring it I say! Then again, living here in the tropics, one rarely even sees solar panels in use

Thai Oil chief sees possible oil shortage in next 3-4 years 

<{POST_SNAPBACK}>

Seems to me he is more worried about the capacity of Thai refineries. Guess the journalist didn't understand what he was talking about. Besides, if Thailand doesn't have the capacity to refine oil, it will simply have to import the refined products in addition ot crude oil.

There will never be a shortage of oil. There is no shortage of diamonds or gold - it is just that these commodities are very expensive. In a free economy, prices will follow supply & demand.

So a global oil shortage - never. That oil one day will be too expensive to use as a fuel - that is almost a certainty. When that will happen - now that's the big question......

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Good point, and to add to that, the more expensive oil gets the more oil there is that can be extracted. I know this seems wrong but here's the way it works. Proven reserves represents the amount of oil in the ground that can be extracted from the ground with present technology and at a marketable cost. As the price rises the cost of extracting oil from the ground can go up and oil that was not cost effective before becomes cost effective to pump out of the ground. When oil hits $200 per barrel it will be cost effective to extract oil trapped in sand and rock deposits and this oil reserve is massive compared to the proven reserves at today's prices.

Massive tar pits in Canada come to mind!

Anyone know where I can buy a solar panel - even better where I can buy some biodiesal for my ute.

Be the change you want to see.

Oi on the move again.....ye-no-yes-no...wot

The latest data on oil prices according to the Bank of England "suggest that financial markets believe that there is a greater chance of a large rise in the price of oil than a large fall.

Currently, market participants judge that there is roughly a one in 20 chance that oil prices will be $100 or higher in August 2006."

A 5% chance of oil hitting $100 a barrel still represents long odds but Goldman Sachs - the biggest trader of energy derivatives - thinks it is a real possibility.

It put out a paper this year predicting a super-spike in oil prices to $105 a barrel. "We believe oil markets may have entered the early stages of what we have referred to as a 'super-spike' period - a multi-year trading band of oil prices high enough to meaningfully reduce energy consumption and recreate a spare capacity cushion."

Only after that has happened does Goldman Sachs think lower energy prices will return.

Even though the market has paused for breath this week after last week's heady rise, crude was still trading at about $66 a barrel in New York last night.

It is already assumed that the $70 level will be tested at some point over the next few weeks, and the gloomier analysts find it all too easy to sketch out scenarios in which it goes much higher than that.

Anyone know where I can buy a solar panel - even better where I can buy some biodiesal for my ute.

Be the change you want to see.

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Are you suggesting that alot of male farang tourists should turn into inexpensive and honest bar girls?

forget about solar panels ,they are too expensive to install, you wait 20 years before you recover your installation costs. by that time you might be dead ~!