Egypt Oil and Gas Report Q1 2010
Business Monitor International, December 2009, Pages: 93
Business Monitor International's Egypt 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 Egypt's oil and gas industry.
The latest Egypt Oil & Gas Report from BMI forecasts that the country will account for 19.67% of African regional oil demand by 2014, while providing 5.53% of supply. African regional oil use of 2.98mn barrels per day (b/d) in 2001 rose to an estimated 3.60mn b/d in 2009. It should average 3.66mn b/d in 2010 and then rise to around 4.13mn b/d by 2014. Regional oil production was 7.84mn b/d in 2001, and in 2009 averaged an estimated 9.79mn b/d. It is set to rise to 12.52mn 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 4.86mn b/d. This total had risen to an estimated 6.19mn b/d in 2009 and is forecast to reach 8.40mn b/d by 2014. Angola has the greatest production growth potential, with Nigerian exports set to soar if it can resolve recent quasi-political issues.
In terms of natural gas, the region in 2009 consumed an estimated 124bn cubic metres (bcm), with demand of 191bcm targeted for 2014. Production of an estimated 248bcm in 2009 should reach 385bcm in 2014, which implies net exports rising from 124bcm in 2009 to 193bcm by the end of the period. Egypt consumed an estimated 34.41% of the region’s gas in 2009, with its market share set to be 27.23% by 2014. It contributed an estimated 26.26% to 2009 regional gas production and, by 2014, will account for 23.91% of supply.
For 2009 as a whole, the publisher has 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 they were using in the previous quarter. For 2010, the publisher expects to see a significant oil price recovery to US$83.00/bbl for the OPEC basket price, gaining further ground to US$85.00/bbl in 2011 and to US$90.00/bbl in 2012 and beyond.
For 2009, BMI has 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 BMI 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 by BMI at US$52.66/bbl, down 39.7% from the previous year’s level.
Egyptian real GDP is estimated by BMI to have risen by 4.7% in 2009, compared with 7.2% growth in 2008. The publisher is assuming average annual growth of 4.9% in 2010-2014. The publisher expects oil demand to rise from an estimated 700,000b/d in 2009 to 811,000b/d in 2014, subject to national efforts to conserve oil and increase the use of gas. State oil company Egyptian General Petroleum Corporation (EGPC) operates in partnership with various international oil companies (IOCs), and alone accounts for just 20% of the country’s oil output. In spite of higher recent IOC investment, combined oil and gas liquids output is forecast to decrease from an estimated 705,000b/d in 2009 to 692,000b/d in 2014. Gas production should reach 92bcm by 2014, up from an estimated 65bcm in 2009. Consumption is expected to rise from almost 43bcm to 52bcm by the end of the forecast period, providing exports of 40bcm.
Between 2009 and 2019, the publisher is forecasting a decrease in Egyptian oil and gas liquids production of 13.5%, with volumes slipping steadily to 610,000b/d by the end of the 10-year forecast period. Oil consumption between 2009 and 2019 is set to increase by 34.4%, with growth slowing to an assumed 3.0% per annum towards the end of the period and the country using 941,000b/d by 2019. Gas production is expected to rise to 110bcm by the end of the period. With demand rising by 49.2% between 2009 and 2019, there should be export potential increasing to 46.6bcm, largely in the form of LNG. Details of BMI’s 10-year forecasts can be found in the appendix to this report.
Egypt occupies seventh place in BMI’s updated Upstream Business Environment rating, just one point behind Republic of Congo (RoC). The country’s score benefits from healthy proven gas reserves, an established competitive landscape, a reasonable gas reserves-to-production ratio (RPR) and attractive licensing terms. The country’s risk environment is sound, but this alone may not be enough to push Egypt past RoC during the next few quarters. However, South Africa is five points behind and lacks the upstream credentials to challenge for Egypt’s seventh place. The country is comfortably in the upper half of the league table in BMI’s Downstream Business Environment rating, with some high scores but progress further up the rankings unlikely. It is ranked second, thanks to high scores for refining capacity, oil and gas demand, retail site intensity, population and GDP per capita growth. The growth outlook for oil/gas consumption and refining capacity represent relatively weak suits. Algeria is behind it in the regional rankings, and there is some long-term risk of it challenging for Egypt’s second place.
Executive Summary
SWOT Analysis
- Egypt Political SWOT
- Egypt Economic SWOT
- Egypt Business Environment SWOT
Egypt Energy Market Overview
- Regional Market Overview
- Oil Supply And Demand
- Table: Africa Oil Consumption (000b/d)
- Table: Africa Oil Production (000b/d)
- Oil: Downstream
- Table: Africa Oil Refining Capacity (000b/d)
- Gas Supply And Demand
- Table: Africa Gas Consumption (bcm)
- Table: Africa Gas Production (bcm)
- Liquefied Natural Gas
- Table: Africa LNG Exports/(Imports) (bcm)
Business Environment Ranking
- Africa Region
- Composite Scores
- Table: Regional Upstream Business Environment Rating
- Table: Regional Downstream Business Environment Rating
- Upstream Scores
- Downstream Scores
- Egypt Upstream Rating – Overview
- Egypt Upstream Rating – Potential Returns
- Egypt Upstream Rating – Risks to Potential Returns
- Egypt Downstream Rating – Overview
- Egypt Downstream Rating – Potential Returns
- Egypt 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: Egypt Oil & Gas – Historical Data & Forecasts
- Other Energy
- Table: Egypt Other Energy – Historical Data & Forecasts
- Key Risks To BMI’s Forecast Scenario
- Long-Term Oil & Gas Outlook
- Macroeconomic Outlook
- Table: Egypt – Macroeconomic Forecasts
Competitive Landscape
- Executive Summary
- Table: Key Players – Egyptian Energy Sector
- Overview/State Role
- Table: Key Upstream Players
- Table: Key Downstream Players
Company Monitor
- Egyptian General Petroleum Corporation (EGPC)
- BP Egypt
- Eni Egypt
- Shell Egypt
- BG Egypt
- Apache Energy
- Dana Gas
- Melrose Resources – Summary
- Lukoil – Summary
- ExxonMobil – Summary
- Chevron – Summary
- GDF Suez – Summary
- Reliance Industries – Summary
- Enel – Summary
- Edison – Summary
- Dana Petroleum – Summary
- RWE Dea – Summary
- Kuwait Energy Company – Summary
- TransGlobe Energy – Summary
- Vegas Oil & Gas – Summary
- Circle Oil – 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: Africa Oil Consumption (000b/d)
- Regional Oil Supply
- Table: Africa Oil Production (000b/d)
- Regional Refining Capacity
- Table: Africa Oil Refining Capacity (000b/d)
- Regional Gas Demand
- Table: Africa Gas Consumption (bcm)
- Regional Gas Supply
- Table: Africa Gas Production (bcm)
- Egypt Country Overview
- Methodology & Risks To Forecasts
- BMI Forecast Modelling
- How the publisher generate their industry forecasts
- Energy Industry
- Cross checks
- Sources
- Egyptian General Petroleum Corporation (EGPC)
- BP Egypt
- Eni Egypt
- Shell Egypt
- BG Egypt
- Apache Energy
- Dana Gas
- Melrose Resources
- Lukoil
- ExxonMobil
- Chevron
- GDF Suez
- Reliance Industries
- Enel
- Edison
- Dana Petroleum
- RWE Dea
- Kuwait Energy Company
- TransGlobe Energy
- Vegas Oil & Gas
- Circle Oil
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