Europe, Asia pace modest gains in Global Energy Investment index

Aug. 7, 2000
The first quarter 2000 performance of the 20 countries in the Global Energy Investment (GEI) index maintained the slow growth pace of the index in the third and fourth quarters of 1999.

The first quarter 2000 performance of the 20 countries in the Global Energy Investment (GEI) index maintained the slow growth pace of the index in the third and fourth quarters of 1999.

Click here to enlarge image

The average GEI score for the 20 countries tracked in the index increased to 53 from 52-mainly based on the gains in scores in Europe and parts of Asia (Table 1).

Click here to enlarge image

Scores in the Americas overall were mixed, with Argentina, Canada, Chile, and Mexico registering gains in first quarter 2000, while the Bolivia, Brazil, and US scores all slipped (see map). In Europe and Asia, the picture was more positive, with no declines noted and 7 out of the 13 nations reporting gains in the index.

What the index does

The GEI index tracks on a quarterly basis the energy activities and market situation for a select group of countries, including financial and economic indicators, energy production and use, and energy market liberalization and privatization measures.

Changes in the index indicate developments in the climate for energy investments and market activities. Global rankings such as the GEI can reveal advances or reversals of financial, economic, and energy market conditions. They can inform market-watchers about energy trends useful in commercial assessments and decision-making.

This marks the fourth in a series of quarterly reports on the GEI index. The GEI index was first published in OGJ in October 1999 to monitor trends in oil, gas, power, and economic and financial activities in a group of 20 selected countries (OGJ, Oct. 11, 1999, p. 42). The methodology used to produce the index was detailed in the first article.

Click here to enlarge image

The historical average ratings of the index are shown in Table 2. Since the first ranking, the pace of gains has added 7 points to the index, from a 46 rating a year ago to 53 points at present (OGJ, Jan. 10, 2000, p. 21, and June 12, 2000, p. 26).

Asia

In Asia, Japan and Thailand scored strong increases in the GEI index based on improving economic and commercial activity. In Thailand, gains in its first quarter 2000 gas production were 24 bcf higher than in fourth quarter 1999.

Australia held steady at 74 points, while China moved up 3 points to 30 based on oil use growth of 600,000 b/d, oil production gains of 80,000 b/d, and an increase of 38 bcf in natural gas production. This was despite a lowering in China's economic and commercial indicators.

South Korea rose 1 point on the index to 34 based on oil use gains of 130,000 b/d and power generation asset sales activities.

Elsewhere in Asia, the Philippines and India held steady at 38 and 34, respectively.

Europe

The UK's GEI ranking held steady at a score of 77 despite a slight drop in its economic indices, offset by gains in gas production growth.

On the strength of oil and gas production gains, Norway rose 3 points in the index to 67.

France gained 1 point as oil use rose 130,000 b/d and electricity market conditions improved, rising to a 41 score.

The score for Spain rose due to improved electricity and natural gas market conditions and higher oil consumption, up 80,000 b/d.

Elsewhere in Europe, Germany's and Italy's scores held constant at 67 and 46, respectively.

Americas

In the Americas, Mexico's score rose due to higher oil consumption, up 90,000 b/d, and improving conditions in electricity and natural gas markets.

Argentina's increase to a score of 59 from 57 was due largely to electricity asset sales to the private sector. Brazil moved down to 52 from 53 because of stagnant oil use, while Bolivia decreased to 46 from 48 due to slippage in its economic indices and some gas production declines.

Canada moved up to a score of 66 based on a 4% increase in gas production volumes in the first quarter and improved electricity market conditions. Chile moved to 68 from 66, led by gains in its economic indicators and gas market activity improvements.

US performance in the index was hit in the recent rankings by a slump in oil use in first quarter 2000 and a decline of 100,000 b/d in oil production. US oil use recovered 250,000 b/d in second quarter 2000.

These combined to offset US gains in the electricity sector that added 1.5 gw of new merchant-plant capacity and 4.7 gw of utility power plant sales to the unregulated market sector.