Italy Oil and Gas Report Q3 2009
Business Monitor International, July 2009, Pages: 65
Italy Oil and Gas Report provides industry professionals and strategists, corporate analysts, oil and gas associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Italy's oil and gas industry
BMI forecasts that Italy will account for 12.43% of Developed European regional oil demand by 2013, while contributing 4.11% to supply. In Developed Europe, overall oil consumption reached an estimated 13.75mn barrels per day (b/d) in 2008. It is set to rise to around 13.88mn b/d by 2013. Developed Europe’s regional oil production was 6.97mn b/d in 2001, and in 2008 averaged an estimated 5.06mn b/d. It is set to fall to just 3.77mn b/d by 2013. Oil imports are growing steadily, because supply is contracting and demand is rising, albeit slowly. In 2008, net crude imports were an estimated 8.70mn b/d. By 2013, they are expected to have reached 10.11mn b/d. Norway will remain the only major net exporter, with the UK becoming a net importer.
As regards natural gas, the Developed Europe region in 2008 consumed an estimated 440bn cubic metres (bcm), with demand of 490bcm targeted for 2013, representing 11.2% growth. Production of an estimated 269bcm in 2007 should rise to 279bcm in 2013, which implies net imports rising from the estimated 2008 level of 171bcm to some 211bcm by the end of the period. Italy’s share of gas consumption in 2008 was an estimated 17.84%, while it contributed around 3.31% to production. By 2013, its share of gas consumption is forecast to be 18.23%, with a 2.86% contribution to regional supply.
In terms of the OPEC basket of crudes, the average price in Q109 was an estimated US$45.78 per barrel (bbl), down 13% from the US$52.51/bbl recorded during the previous three months. During the second quarter, there has been little change to our view of oil market developments. BMI is forecasting an average OPEC basket price of US$51.30/bbl, with the March gains being retained in April, before further recovery to a possible US$57.00 is seen by June. For 2009, we are still assuming an average OPEC basket price of US$52.00/bbl (-45% year-on-year). The BMI full year forecast implies Brent crude at US$53.73, WTI averaging US$54.90/bbl and Urals at US$52.66 for 2009.
For the whole of 2009, the BMI assumption for gasoline is an average US$56.89/bbl, with the price peaking at a forecast monthly average of US$64.75 in December 2009. The overall y-o-y fall in 2009 gasoline prices is put at 44.1%. For gasoil in 2009, the BMI forecast is for an average price of US$69.35/bbl, assuming a monthly high of US$94.48/bbl in December. The full-year outturn represents a 42.8% fall from the 2008 level. The monthly average jet fuel price is forecast to range from US$53.75 in February to US$96.76/bbl in December, proving an annual level of US$71.78/bbl. This compares with US$124.95/bbl in 2008.
Italian real GDP is now forecast by BMI to fall by 4.5% in 2009, compared with the 1.0% decline in 2008. We are now assuming an average annual growth rate of 0.2% between 2009 and 2013. By 2013, we expect to see the country consuming 1.72mn b/d of oil. A rise in near-term domestic oil production is expected. We are assuming oil production of 180,000b/d by 2010, but imports are set to reach 1.56mn b/d by 2013. Use of gas in power generation is the key to demand growth and consumption looks set to reach 89.2bcm by 2013. Imports are likely to have reached 81.2bcm at this stage.
Between 2008 and 2018, we are forecasting a decrease in Italian oil production of 20.0%, with output peaking at 180,000b/d in 2010 before slipping to 120,000b/d at the end of the 10-year forecast period. Given oil consumption forecast to decrease by 2.13%, imports can be expected to fall from an estimated 1.59mn b/d in 2008 to a low of 1.53mn b/d in 2009, before rebounding to 1.58mn b/d by the end of the forecast period. Gas demand should rise from the estimated 2008 level of 78.5bcm to 98.5bcm by 2018. Production of an estimated 8.9bcm in 2008 is expected to fall to 7.0bcm by 2018, requiring imports up from 69.6bcm to 91.5bcm, in the form of pipeline gas and LNG. Details of BMI’s 10-year forecasts can be found in the appendix to this report.
Our long-term political score for Italy is 80.3 (out of 100), below the developed markets average of 85.8. Italy has the third-lowest political risk rating of countries in the BMI developed markets universe. Our long-term economic risk rating is 66.1, which compares with a developed markets average of 69.3. It is the second-lowest in the group of countries, ahead of Greece. Italy has a privatised energy sector operating under EU guidelines. There is a significant upstream oil and gas segment featuring domestic and foreign operators. Downstream oil is highly competitive and involves a mixture of international oil companies (IOCs) and domestic companies. Both the gas and power markets are privatised and open to competition.
Executive Summary
SWOT Analysis
Italy Political SWOT
Italy Economic SWOT
Italy Energy Market Overview
Regional Energy Market Overview
Oil Supply And Demand
Table: Developed Markets Oil Consumption (000b/d)
Table: Developed Markets Oil Production (000b/d)
Oil: Downstream
Table: Developed Markets Oil Refining Capacity (000b/d)
Gas Supply And Demand
Table: Developed Markets Gas Consumption (bcm)
Table: Developed Markets Gas Production (bcm)
Liquefied Natural Gas
Table: Developed Markets LNG Imports/(Exports) (bcm)
Industry Forecast Scenario
Oil And Gas Reserves
Oil Supply And Demand
Gas Supply And Demand
LNG
Refining And Oil Products Trade
Revenues/Import Costs
Table: Italy Oil & Gas – Historical Data & Forecasts
Other Energy
Table: Italy Other Energy – Historical Data & Forecasts
Key Risks To BMI’s Forecast Scenario
Long-Term Oil & Gas Outlook
Macroeconomic Outlook
Table: Italy – Economic Activity
Competitive Landscape
Executive Summary
Table: Key Players – Italian Energy Sector
Overview/State Role
Table: Key Upstream Players
Table: Key Downstream Players
Company Monitor
Eni
Royal Dutch Shell
ERG
Po Valley Energy
Enel – Summary
Petroceltic – Summary
Mediterranean Oil and Gas – Summary
Total – Summary
Lukoil – Summary
Northern Petroleum – Summary
Others – Summary
Glossary of Terms
Oil & Gas Ratings: Revised Methodology
Introduction
Ratings Overview
Table: BMI Oil & Gas Business Environment Ratings: Structure
Indicators
Table: BMI Oil & Gas Business Environment Upstream Ratings: Methodology
Table: BMI Oil & Gas Business Environment Downstream Ratings: Methodology
Oil & Gas Outlook: Long-Term Forecasts
Regional Oil Demand
Table: Developed Europe Oil Consumption (000b/d)
Regional Oil Supply
Table: Developed Europe Oil Production (000b/d)
Regional Refining Capacity
Table: Developed Europe Oil Refining Capacity (000b/d)
Regional Gas Demand
Table: Developed Europe Gas Consumption (bcm)
Regional Gas Supply
Table: Developed Europe Gas Production (bcm)
Italy Country Overview
Methodology & Risks To Forecasts
BMI Forecast Modelling
How We Generate Our Industry Forecasts
Energy Industry
Cross checks
Sources
- Eni
- Royal Dutch Shell
- ERG
- Po Valley Energy
- Enel
- Petroceltic
- Mediterranean Oil and Gas
- Total
- Lukoil
- Northern Petroleum
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