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France Oil and Gas Report Q1 2011
Business Monitor International, Jan 2011, Pages: 78
Business Monitor International's France 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 France's oil and gas industry.
The latest France Oil & Gas Report from BMI forecasts that the country will account for 14.51% of developed European regional oil demand by 2015, while making a 0.26% contribution to supply. In Developed Europe, overall oil consumption was an estimated 13.02mn barrels per day (b/d) in 2010. It is set to recover to around 13.24mn b/d by 2015. Developed Europe regional oil production was 6.96mn b/d in 2001, and in 2010 averaged an estimated 4.44mn b/d. It is set to fall to just 3.50mn b/d by 2015. Oil imports are growing steadily because supply is contracting and demand is rising, albeit slowly. In 2010, net crude imports were an estimated 8.58mn b/d. By 2015, they are expected to reach 9.73mn b/d. Norway will remain the only major net exporter, with the UK a net importer.
As regards natural gas, the Developed Europe region in 2010 consumed an estimated 419.5bn cubic metres (bcm), with demand of 470.7bcm targeted for 2015, representing 12.2% growth. Production of an estimated 259.3bcm in 2010 is set to fall to 253.0bcm in 2015, which implies net imports rising from the estimated 2010 level of 160.2bcm to some 217.7bcm by the end of the period. The French share of gas consumption in 2010 was an estimated 10.26%, while it has no appreciable share of production. By 2015, its share of gas consumption is forecast to be 9.37%.
For 2010 as a whole, we assume an average OPEC basket price of US$77.00 per barrel (bbl), up 26.5% year-on-year (y-o-y). The 2010 US WTI price is now put at US$79.16/bbl. BMI is forecasting an OPEC basket price of US$80.00/bbl in 2011, with WTI averaging US$82.25, Brent at US$82.46/bbl, Urals delivering around US$81.21 and the Dubai average being US$80.74/bbl. Our central assumption for 2012 is an OPEC price averaging US$85.00/bbl, delivering WTI at about US$87.40/bbl and Brent at US$87.60/bbl. From 2013 onwards, we are using an average OPEC price of US$90.00/bbl.
For the whole of 2010, the BMI assumption for the global gasoline price is an average US$87.49/bbl, representing a y-o-y rise of 24.7%. The global gasoil forecast is for an average price of US$88.00/bbl, probably peaking in December 2010 at more than US$95/bbl. The full-year outturn represents a 27.6% increase from the 2009 level. For 2010, the annual jet price level is forecast to be US$89.50/bbl. This compares with US$70.66/bbl in 2009. The 2010 average naphtha price is put by BMI at US$77.65/bbl, up almost 31% from the previous year’s level.
French real GDP is assumed by BMI to have risen by 1.5% in 2010. We are forecasting 1.7% average annual growth in 2010-2015. Oil consumption is set to stagnate in spite of increased economic activity, with demand of an estimated 1.85mn b/d in 2010 expected to rally to no more than 1.92mn b/d by 2015.
Crude oil imports are expected to have reached 1.91mn b/d by 2015, with domestic crude oil production falling from an estimated 15,000b/d to just 9,000b/d over the period. Gas demand is expected to rise more quickly than for oil, with new sources of supply being lined up by GDF Suez, which has signed import agreements with Egypt, Russia, Norway, Algeria and the Netherlands. Gas consumption is likely to have reached 44.6bcm by 2015. Production is negligible, so imports could rise to 42.6bcm.
Between 2010 and 2020, we are forecasting an increase in French oil and gas liquids consumption of 3.24%, with estimated 2010 demand of 1.85mn b/d rising slowly to a peak of 1.93mn b/d in 2013/14. By 2020, we are forecasting French consumption of 1.91mn b/d. Production is set to fall from around 15,000b/d to just 5,000b/d during the same period. Gas demand should rise from the estimated 2010 level of 43.1bcm to a peak of 45.0bcm in 2017, based on liquefied natural gas (LNG) and pipeline imports. Details of BMI’s 10-year forecasts can be found in the appendix to this report.
According to BMI’s country risk team, France’s long-term political risk score is 86.3, compared with the Developed Markets average of 86.8 and the global average of 63.0. Our long-term economic rating for the country is 65.5, below the Developed Markets average of 66.6 and above the global average of 52.8. France has a fully privatised and competitive oil and gas industry. State holdings have been reduced greatly in electricity and gas suppliers EDF and GDF Suez. The upstream and downstream oil segments are privatised and deregulated, with considerable IOC involvement in refining and distribution, even though former state company Total has the greatest market share.
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