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Boston, MA -- (SBWire) -- 04/15/2014 --The International Energy Agency reports that in 1990 the country was able to provide 14% of its oil needs, but heightening demand and no sizable discoveries within its borders mean Chile barely provides 2% of its needs from domestic production. It's the same story with natural gas: a very small resource base cannot hope to transform the country into one of oil and gas independence, but small discoveries of shale may point to an opening for some small explorers. The real opportunities are in liquefied natural gas (LNG) and crude as well as refined product importation. A new presidential administration with a centre-left agenda came into power in March 2014. While there is no hint of regulatory reassessment, the new administration knows it has to address the balance between rising demand and declining reserves.

The key trends and developments in the Chilean oil and gas sector are:

- Oil: Our analysts have pegged current in-situ proven crude oil reserves in 2014 at only 147.8mn barrels (bbl), which is equivalent to 13 months' worth of consumption of refined products (370,600b/d). But while consumption is growing, reserves are declining, making Chile more and more reliant upon imported stock. Overall crude oil domestic reserve depletion rates are dropping by 1.5% per year. By 2023, Chile will have only 137.7mn bbl in reserves.
- Gas: On the gas side of the ledger, it's the same story: little domestic stock and high domestic demand. We put Chilean in-situ domestic gas reserves at a modest 96.8bcm with annual local production in 2014 of 1.2bcm, or just 22% of the country's requirements to meet consumption requirements. By 2023 Chile will only be able to fulfil 15% of its gas requirements from domestic sources.
- Refining: Empresa Nacional del Petroleo (ENAP)'s three refineries have a booked refining capacity of 226,000b/d with a current utilisation rate of 85% supplying only 61% of the country's needs. Our assessment is that the reality is, based on utilisation rates, ENAP is only producing 192,000b/d with 2014 total demand expected to come in at 370,600b/d, meaning tankers from abroad have to deliver 178,700b/ d to make up the shortfall. Our projections indicate that Chile will need 469,000b/d of refined products by 2023, meaning the country will be capable of only 46% domestic sourcing.
- Chile gets a third LNG Access point. Chilean power generators Colbun and AES Gener expect Bermuda-registered Hoegh LNG to install a new floating storage and regasification unit (FSRU) by mid 2015. The term of the contract is 10 years, with an optional extension of five years. The FSRU, which will be situated in Quintero Bay, near Santiago, will supply AES Gener's power plants in the country with natural gas. The ship is in the finishing stages of completion at a Hyundai yard in South Korea.

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