United Arab Emirates Oil and Gas Report Q1 2010
Business Monitor International, December 2009, Pages: 83
United Arab Emirates 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 the United Arab Emirates' oil and gas industry.
The latest United Arab Emirates (UAE) Oil & Gas Report forecasts that the country will account for 4.35% of Middle Eastern (ME) regional oil demand by 2014, while providing 11.35% of supply. Regional oil use of 8.24mn barrels per day (b/d) in 2001 rose to an estimated 11.38mn b/d in 2009. It should average 11.66mn b/d in 2010 and then rise to around 12.68mn b/d by 2014. Regional oil production was 22.87mn b/d in 2001 and averaged an estimated 24.79mn b/d in 2009. It is set to rise to 28.65mn b/d by 2014. Oil exports are growing steadily because demand growth is lagging the pace of supply expansion. In 2001, the region was exporting an average 14.63mn b/d. This total had fallen to an estimated 13.41mn b/d in 2009, but is forecast to reach 15.96mn b/d by 2014. Iraq has the greatest production growth potential, followed by Qatar.
In terms of natural gas, the region in 2009 consumed an estimated 406.5bn cubic metres (bcm), with demand of 545.1bcm targeted for 2014, representing 34.1% growth. Estimated production of 420.6bcm in 2009 should reach 652.8bcm in 2014 (+55.2%), which implies net exports rising to 108bcm by the end of the period. The UAE in 2009 consumed an estimated 14.27% of the region’s gas, with its market share forecast at 14.63% by 2014. It contributed an estimated 12.60% to 2009 regional gas production and, by 2014, will account for 13.02% of supply.
For 2009 as a whole, we have assumed an average OPEC basket price of US$59.00 per barrel (bbl), a 37.3% decline year-on-year (y-o-y). This represents an upgrade from the US$55.00/bbl forecast we were using in the previous quarter. For 2010, we expect to see a significant oil price recovery to US$83.00/bbl for the OPEC basket price, gaining further ground to US$85.00 in 2011 and to US$90.00/bbl in 2012 and beyond. For 2009, the authors have assumed a global average gasoline price of US$67.46/bbl, with the fuel having peaked in June at almost US$80.00/bbl. The overall y-o-y fall in 2009 gasoline prices is put at 33.7%. The gasoil forecast is for an average price of US$70.59/bbl, assuming a monthly high above US$94/bbl in December 2009. The full-year outturn represents a 41.8% y-o-y fall. The annual jet price level for 2009 is estimated at US$68.45/bbl. This compares with US$124.95/bbl in 2008. The 2009 average naphtha price is put at US$52.66/bbl, down 39.7% from the previous year’s level. UAE real GDP is estimated to have fallen by 2.8% in 2009, compared with 7.4% growth in 2008.
We are assuming average annual growth of 5.0% in 2010-2014. We expect oil demand to rise from an estimated 472,000b/d in 2009 to 552,000b/d in 2014, lagging our underlying economic assumptions. State-owned Abu Dhabi National Oil Company (ADNOC) is the biggest national oil company, working in partnership with major international oil companies (IOCs) to deliver an estimated 2.75mn b/d of 2009 oil and liquids production, rising to 3.25mn b/d by the end of the forecast period – subject to OPEC quota policy. Gas production should reach at least 85bcm by 2014, up from an estimated 53bcm in 2009. Consumption is expected to rise from an estimated 58bcm to 80bcm by the end of the forecast period, allowing net exports of around 5bcm.
Between 2009 and 2019, we are forecasting an increase in UAE oil production of 38.2%, with volumes rising steadily to 3.80mn b/d by the end of the 10-year forecast period. Oil consumption between 2009 and 2019 is set to increase by 39.0%, with growth slowing to an assumed 3.0% per annum towards the end of the period and the country using 656,000b/d by 2019. Gas production is expected to rise from an estimated 53bcm to 120bcm by the end of the period. With 2009-2019 demand growth of 89.3%, this provides net gas export potential rising to 10bcm over the period. Details of the 10-year forecasts can be found in the appendix to this report.
UAE now shares first place with Qatar in the updated Upstream Business Environment rating, thanks largely to its significant oil and gas resource base and investor-friendly climate. It stands 13 points clear of Iraq, so appears secure at least over the medium term. It is unlikely, however, to be able to break away from Qatar. UAE’s score reflects the country’s gas reserves, high RPR, plus non-state competition, established licensing framework and generally encouraging country risk factors. The country is well up the league table in the Downstream Business Environment rating, with several high scores and further progress up the rankings possible over the longer term. It is ranked second behind only Turkey, thanks largely to high scores for oil and gas demand, refining capacity expansion and nominal GDP.
Executive Summary
SWOT Analysis
United Arab Emirates Political Swot
United Arab Emirates Economic Swot
United Arab Emirates Business Environment SWOT
UAE Energy Market Overview
Pipelines
Regional Energy Market Overview
Oil Supply and Demand
Table: Middle East Oil Consumption (000b/d)
Table: Middle East Oil Production (000b/d)
Oil: Downstream
Table: Middle East Oil Refining Capacity (000b/d)
Gas Supply and Demand
Table: Middle East Gas Consumption (bcm)
Table: Middle East Gas Production (bcm)
Liquefied Natural Gas
Table: Middle East LNG Exports/(Imports) (bcm)
Business Environment Ranking
Middle East Region
Composite Scores
Table: Regional Upstream Business Environment Rating
Table: Regional Downstream Business Environment Rating
Upstream Scores
Downstream Scores
UAE Upstream Rating – Overview
UAE Upstream Rating – Potential Returns
UAE Upstream Rating – Risks to Potential Returns
UAE Downstream Rating – Overview
UAE Downstream Rating – Potential Returns
UAE Downstream Rating – Risks to Potential Returns
Business Environment
Legal Framework
Infrastructure
Labour Force
Foreign Investment Policy
Tax Regime
Security Risk
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: UAE Oil & Gas – Historical Data & Forecasts
Other Energy
Table: UAE Other Energy – Historical Data & Forecasts
Key Risks to BMI’s Forecast Scenario
Long-Term Oil & Gas Outlook
Macroeconomic Outlook
United Arab Emirates – Economic Activity 2007-2014
Competitive Landscape
Table: Key Domestic & Foreign Companies In The UAE Oil And Gas Sector
Overview/State Role
Table: Key Upstream Players
Table: Key Downstream Players
Company Monitor
Abu Dhabi National Oil Company (ADNOC)
Dolphin Energy Ltd (DEL)
Emarat – Emirates General Petroleum Corporation
Emirates National Oil Company Limited (ENOC)
BP – Summary
Total – Summary
ConocoPhillips – Summary
ExxonMobil – Summary
Shell – Summary
Dana Gas – Summary
Occidental Petroleum – Summary
Japan Oil Development Company (JODCO) – Summary
Cosmo Oil – Summary
Abu Dhabi National Energy Company (TAQA) – Summary
CNPC – 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: Middle East Oil Consumption (000b/d)
Regional Oil Supply
Table: Middle East Oil Production (000b/d)
Regional Refining Capacity
Table: Middle East Oil Refining Capacity (000b/d)
Regional Gas Demand
Table: Middle East Gas Consumption (bcm)
Regional Gas Supply
Table: Middle East Gas Production (bcm)
UAE Country Overview
Methodology & Risks to Forecasts
Forecast Modelling
How we generate our industry forecasts
Energy Industry
Cross checks
Sources
- Abu Dhabi National Oil Company (ADNOC)
- Dolphin Energy Ltd (DEL)
- Emarat – Emirates General Petroleum Corporation
- Emirates National Oil Company Limited ENOC)
- BP
- Total, ConocoPhillips
- ExxonMobil
- Shell
- Dana Gas
- Occidental Petroleum
- Japan Oil Development Company (JODCO)
- Cosmo Oil
- Abu Dhabi National Energy Company (TAQA)
- CNPC
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