Venezuela Oil and Gas Report Q2 2010
Business Monitor International, March 2010, Pages: 100
The Venezuela 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 Venezuela's oil and gas industry.
The latest Venezuela Oil & Gas Report forecasts that the country will account for 8.78% of Latin America regional oil demand by 2014, while providing 25.49% of supply. Latin America regional oil use of 6.93mn barrels per day (b/d) in 2001 reached an estimated 7.78mn b/d in 2009. It should average 7.92mn b/d in 2010 and then rise to around 8.631mn b/d by 2014. Regional oil production was 10.30mn b/d in 2001, and in 2009 averaged an estimated 9.69mn b/d. It is set to rise to 10.79mn b/d by 2014. Oil exports have been slipping, because demand growth has exceeded the pace of supply expansion. In 2001, the region was exporting an average of 3.37mn b/d. This total had fallen to an estimated 1.91mn b/d in 2009 and is forecast to recover to 2.15mn b/d in 2014. The principal exporters will be Mexico, Venezuela, Ecuador and Brazil.
In terms of natural gas, the region in 2009 consumed an estimated 200.6bn cubic metres (bcm), with demand of 263.9bcm targeted for 2014, representing 31.6% growth. Production of an estimated 216.8bcm in 2009 should reach 293.0bcm in 2014, and implies 29.1bcm of net exports by the end of the period. Venezuela contributed an estimated 14.71% to 2009 regional gas consumption, while producing 13.61%. By 2014, it is expected to consume 15.46% of the region’s gas, while contributing 20.48% to supply. For 2009 as a whole, we have assumed an average OPEC basket price of US$60.70 per barrel (bbl), a 35.5% decline year-on-year (y-o-y). 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.
In 2010, BMI is now forecasting premium unleaded gasoline prices at an average US$97.00, up from US$70.22/bbl in 2009. We are assuming an average global jet fuel price for 2010 of US$97.58/bbl, compared with US$70.63 in 2009. For gasoil, the 2010 price estimate is for an average of US$97.40/bbl, compared with US$70.50 in 2009. The FY10 naphtha price average, estimated at US$81.58/bbl compares with US$59.07 in FY09.
Venezuelan real GDP in 2009 is assumed by BMI to have fallen by 3.0%, compared with growth of 4.8% in 2008. We are assuming average annual growth of 1.5% in 2010-2014. State-owned Petróleos de Venezuela (PdVSA) works in cooperation with numerous international oil company (IOC) partners in conventional and heavy oil projects. While recent re-nationalisation moves, changes in taxation and alterations to the licensing system have reduced foreign involvement, several key players appear committed to the country. We are assuming oil and gas liquids production of 2.75mn b/d by 2014, with the country expected to pump an estimated 2.36mn b/d in 2010. Consumption beyond the economic weakness of 2009/10 is forecast to increase by up to 3% per annum to 2014, implying demand of 758,000b/d by this point. The export capability would thus be about 1.99mn b/d by 2014.
Gas production is forecast to rise from an estimated 29.5bcm in 2009 to 60.0bcm over the period, allowing for 19.2bcm of exports by 2014.
Between 2009 and 2019, we are forecasting an increase in Venezuelan oil production of 34.0%, with liquids volumes averaging 2.35mn b/d in 2009 before rising steadily to 3.15mn b/d by 2019. Oil consumption between 2009 and 2019 is set to increase by 33.1%, with growth slowing to an assumed 3.0% per annum towards the end of the period and the country using 878,000b/d by 2019. Gas production is expected to rise steadily, from an estimated 29.5bcm in 2009 to 80.0bcm in 2019. With demand growth of 76.5%, this implies export potential rising to 27.9bcm by 2019. Details of BMI’s 10-year forecasts can be found in the appendix to this report.
Venezuela ranks second, ahead of Peru and behind only Brazil, in BMI’s updated Upstream Business Environment Rating, having held its ground thanks to its vast hydrocarbons resource base. While only two points behind Brazil, it is unlikely to challenge for the outright regional lead unless the overall risk situation improves dramatically. As well as high scores for reserves, production growth potential and reserves-to-production ratios (RPR), Venezuela benefits from the substantial (but decreasing) number of international companies active within its upstream industry. The country now ranks equal eighth with Chile in BMI’s updated Downstream Business Environment Rating, reflecting its refining capacity, retail site intensity and growth in GDP per capita. Ecuador, which placed above Venezuela, may be out of reach, while Chile is capable of overtaking the country during the next few quarters.
Executive Summary
SWOT Analysis
Venezuela Political SWOT Analysis
Venezuela Economic SWOT Analysis
Venezuela Business Environment SWOT Analysis
Venezuela Energy Market Overview
Global Oil Market Outlook Q110
Not So Bleak Midwinter
Oil Price Forecasts
Global Oil Market Review Q409
Quarterly Trends
Nigeria And Iraq Pose Problems
Oil Supply, Demand And Price Outlook Q110
Table: Global Oil Consumption (000b/d)
Short-Term Demand Outlook
Table: Global Oil Production (000b/d)
Short-Term Supply Outlook
Longer-Term Supply And Demand
Oil Price Assumptions
Table: Crude Price Assumptions 2010
Table: Oil Price Forecasts
Regional Energy Market Overview
Oil Supply And Demand
Table: Latin America Oil Consumption (000b/d)
Table: Latin America Oil Production (000b/d)
Oil: Downstream
Table: Latin America Oil Refining Capacity (000b/d)
Gas Supply And Demand
Table: Latin America Gas Consumption (bcm)
Table: Latin America Gas Production (bcm)
Liquefied Natural Gas
Table: Latin America LNG Exports/(Imports) (bcm)
Business Environment Rating
Latin America Region
Composite Scores
Table: Regional Upstream Business Environment Rating
Table: Regional Downstream Business Environment Rating
Upstream Scores
Downstream Scores
Venezuela Upstream Rating – Overview
Venezuela Upstream Rating – Potential Returns
Venezuela Upstream Rating – Risks To Potential Returns
Venezuela Downstream Rating – Overview
Venezuela Downstream Rating – Potential Returns
Venezuela 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
Liquefied Natural Gas
Refining And Oil Products Trade
Revenues/Import Costs
Table: Venezuela Oil And Gas – Historical Data And Forecasts
Other Energy
Table: Venezuela Other Energy – Historical Data And Forecasts
Key Risks To BMI’s Forecast Scenario
Long-Term Oil And Gas Outlook
Oil And Gas Infrastructure
Oil Refineries
LNG Terminals
Macroeconomic Outlook
Table: Venezuela – Economic Activity, 2007-2014
Competitive Landscape
Executive Summary
Table: Key Players In Venezuela’s Oil And Gas Sector
Overview/State Role
Licensing And Regulation
Government Policy
Licensing Rounds
International Energy Relations
Table: Key Upstream Players
Table: Key Downstream Players
Company Monitor
PdVSA
Chevron
Total Venezuela
Repsol YPF Venezuela
BP – Summary
Statoil – Summary
Eni – Summary
Petróleo Brasileiro (Petrobras) – Summary
Perenco – Summary
Galp Energia – Summary
BeloVenezolana – Summary
Others – Summary
Former IOC Partners – Summary
Glossary Of Terms
Oil And Gas Ratings: Revised Methodology
Introduction
Ratings Overview
Table: BMI Oil And Gas Business Environment Ratings: Structure
Indicators
Table: BMI Oil And Gas Business Environment Upstream Ratings: Methodology
Table: BMI Oil And Gas Business Environment Downstream Ratings: Methodology
Oil And Gas Outlook: Long-Term Forecasts
Regional Oil Demand
Table: Latin America Oil Consumption (000b/d)
Regional Oil Supply
Table: Latin America Oil Production (000b/d)
Regional Refining Capacity
Table: Latin America Oil Refining Capacity (000b/d)
Regional Gas Demand
Table: Latin America Gas Consumption (bcm)
Regional Gas Supply
Table: Latin America Gas Production (bcm)
Venezuela Country Overview
Methodology And Risks To Forecasts
BMI Forecast Modelling
How We Generate Our Industry Forecasts
Energy Industry
Cross checks
Sources
- PdVSA
- Chevron
- Total Venezuela
- Repsol YPF Venezuela
- BP
- Statoil
- Eni – Summary
- Petróleo Brasileiro (Petrobras)
- Perenco
- Galp Energia
- BeloVenezolana
- Others
- Former IOC Partners
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