Estimates for Australian production of oil products for the current fiscal year to 30 June 2021 have been revised lower following oil major BP's announcement of the closure of its 146,000 b/d Kwinana refinery in Western Australia.
Australian refinery output is expected to fall gradually in the October-December quarter of 2020 and the April-June quarter of 2021. The winding down of production at BP's Kwinana refinery is expected to more than offset a recovery in production at the remaining three refineries after being affected by the downturn in demand caused by Covid-19 containment measures, according to Australian government commodity forecaster the Office of the Chief Economist in its latest Resources and Energy Quarterly (REQ) report.
Australia's refined oil product production is to average 352,000 b/d in the 2020-21 fiscal year to 30 June from the previous estimate of 442,000 b/d made in September, the December REQ report said. Estimates for refined oil product production in 2021-22 have also been lowered to 324,000 b/d from the previous forecast of 490,000 b/d, the OCE said.
The 2021-22 year would mark the first full fiscal year without output from Kwinana, with the plant expected to close around the end of April.
As a consequence of the Kwinana closure, oil product import estimates to Australia have been revised higher to an average of 785,000 b/d in 2020-21 from 699,000 b/d previously and to 844,000 b/d in 2021-22 from the previous estimate of 688,000 b/d, marking a near 32pc increase from the 2019-20 average, according to the latest REQ report.
The rise in refined oil product imports and closure of Kwinana mean a fall in Australian crude imports to 306,000 b/d in 2020-21 from the previous estimate of 342,000 b/d. The estimate for 2021-22 crude imports has been left unchanged, despite Australian oil production consumption remaining unchanged at 1.07mn b/d in 2021-22, according to the OCE.
The rise in combined imports of oil products and crude in 2021-22 may imply an increase in Australian stockpiles as part of an effort to meet its compliance with the International Energy Agency's 90-day stockholding requirement.
Australian crude and condensate production has been raised to 385,000 b/d in 2021-22 from the previous forecast of 373,000 b/d and may reflect deferred production, with estimates for output in the current 2020-21 fiscal year falling to 371,000 b/d from 378,000 b/d previously.
| Australian refined oil product output, import estimates (b/d) | |||
| 2019-20 | 2020-21 | 2021-22 | |
| Refinery production | 447,000 | 352,000 | 324,000 |
| Crude and condensate production | 372,000 | 371,000 | 385,000 |
| Refined oil product imports | 640,000 | 785,000 | 844,000 |
| Crude oil imports | 317,000 | 306,000 | 345,000 |
| Source: Office of the Chief Economist | |||
