Romania Oil and Gas Report Q1 2011

Romania 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 Romania's oil and gas industry.

This latest Romania Oil & Gas Report from BMI forecasts that the country will account for 3.57% of Central and Eastern European (CEE) regional oil demand by 2015, while providing just 0.48% of supply. CEE regional oil use of 5.42mn barrels per day (b/d) in 2001 is forecast to rise to 6.05mn b/d in 2010. It should increase to around 6.89mn b/d by 2015. Regional oil production was 8.89mn b/d in 2001 and is expected to average 13.82mn b/d in 2010. It is set to rise to 15.08mn b/d by 2015. Oil exports are growing steadily, because demand growth is lagging the pace of supply expansion. In 2001, the region was exporting an average of 3.47mn b/d. This total is forecast to rise to 7.76mn b/d in 2010 and reach 8.19mn b/d by 2015. Azerbaijan and Kazakhstan have the greatest production growth potential, although Russia will remain the key exporter.

In terms of natural gas, the region is forecast to consume 636.3bn cubic metres (bcm) in 2010, with demand of 747.7bcm targeted for 2015, representing 17.5% growth. Production of an estimated 787.9bcm in 2010 should reach 954.2bcm in 2015, which implies net exports rising from an estimated 151.6bcm in 2010 to 206.5bcm by the end of the period. Romania’s estimated share of 2010 regional gas consumption is 2.14%, while its share of production is put at 1.33%. By 2015, its share of demand is forecast to be 2.16%, with the country accounting for 0.87% of supply.

For 2010 as a whole, we assume an average OPEC basket price of US$77.00/bbl, a 26.5% year-on-year (y-o-y) increase. The 2010 US WTI price is now put at US$79.16/bbl. BMI is assuming 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 approximately US$87.40 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 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.

BMI forecasts Romanian real GDP falling by 1.9% in 2010. We are forecasting average annual growth of 3.0% in 2010-2015. Beyond the weakness of 2009/2010, oil demand could potentially grow at 3.0% per annum, rising to 247,000b/d by 2015. In spite of greater efforts by the OMV-backed national oil company Petrom, we see domestic oil production slipping from an estimated 92,000b/d in 2010 to 71,000b/d by 2015. This implies rising import levels, with volumes up to 176,000b/d by 2015. Natural gas consumption of an estimated 13.6bcm in 2010 can be expected to reach 16.2bcm by 2015. Romania’s gas production is forecast to slip to no more than 8.3bcm by 2015, providing an import requirement of at least 7.9bcm.

Between 2010 and 2020, we are forecasting an increase in Romanian oil consumption of 35.7%, with import volumes rising steadily from an estimated 119,000b/d to 238,000b/d by the end of the 10-year forecast period. Domestic production is forecast to fall from an estimated 92,000b/d to 48,000b/d during the period. Gas consumption is expected to rise to 19.2bcm by 2020, which will be met by 13.2bcm of imports. Details of BMI’s 10-year forecasts can be found in the appendix to this report.

Romania now holds sixth place above Ukraine in BMI’s composite Business Environment Ratings (BER) table, which combines upstream and downstream scores. It now shares sixth place with Bulgaria in BMI’s updated upstream ratings. Its gas production growth outlook, asset maturity and under-developed competitive landscape work against the country and are exacerbated by poor country risk factors. There is some scope for Romania to overtake Bulgaria in the rankings, but Russia and Turkey are likely to remain out of reach. Romania is above the mid-point of the table in BMI’s downstream ratings, with a few high scores but progress from its current joint fifth-place ranking (shared with the Czech Republic) rather unlikely. The country achieves decent scores for refining capacity, oil and gas demand and retail site intensity. SHOW LESS READ MORE >

Executive Summary

SWOT Analysis
Romania Political SWOT
Romania Economic SWOT
Romania Business Environment SWOT

Romania Energy Market Overview

Global Oil Market Review
Regaining Momentum
Quarterly Trends

Global Oil Market Outlook
Sitting Comfortably
Oil Price Forecasts

Oil Supply, Demand And Price Outlook
Short-Term Demand Outlook
Table: Global Oil Consumption (000b/d)
Short-Term Supply Outlook
Table: Global Oil Production (000b/d)
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: Central/Eastern Europe Oil Consumption (000b/d)
Table: Central/Eastern Europe Oil Production (000b/d)
Oil: Downstream
Table: Central/Eastern Europe Oil Refining Capacity (000b/d)
Gas Supply And Demand
Table: Central/Eastern Europe Gas Consumption (bcm)
Table: Central/Eastern Europe Gas Production (bcm)
Liquefied Natural Gas
Table: Central/Eastern Europe LNG Exports/(Imports) (bcm)

Business Environment Ratings
Central/Eastern Europe Region
Composite Scores
Table: Regional Composite Business Environment Rating
Upstream Scores
Table: Regional Upstream Business Environment Rating
Romania Upstream Rating – Overview
Romania Upstream Rating – Rewards
Romania Upstream Rating – Risks
Downstream Scores
Table: Regional Downstream Business Environment Rating
Romania Downstream Rating – Overview
Romania Downstream Rating – Rewards
Romania Downstream Rating – Risks

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: Romania Oil & Gas – Historical Data & Forecasts
Other Energy
Table: Romania Other Energy – Historical Data & Forecasts
Key Risks To BMI’s Forecast Scenario
Long-Term Oil And Gas Outlook

Oil And Gas Infrastructure
Oil Refineries
Table: Refineries in Romania
Service Stations
Oil Storage Facilities
Oil Terminals/Ports
Oil Pipelines
LNG Terminals
Gas Storage Facilities
Gas Pipelines

Macroeconomic Outlook
Table: Romania - GDP By Expenditure

Competitive Landscape
Executive Summary
Table: Key Players – Romania Oil & 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
SNP Petrom
Romgaz
Lukoil Romania
Rompetrol
OMV Romania
Eni – Summary
ExxonMobil – Summary
MOL – Summary
Regal Petroleum – Summary
Aurelian Oil & Gas – Summary
Melrose Resources – Summary
Others – Summary

Oil And Gas Outlook: Long-Term Forecasts
Regional Oil Demand
Table: CEE Oil Consumption (000b/d)
Regional Oil Supply
Table: CEE Oil Production (000b/d)
Regional Refining Capacity
Table: CEE Oil Refining Capacity (000b/d)
Regional Gas Demand
Table: CEE Gas Consumption (bcm)
Regional Gas Supply
Table: CEE Gas Production (bcm)
Romania Country Overview
Methodology And Risks To Forecasts

Glossary Of Terms

BMI Methodology
How We Generate Our Industry Forecasts
Energy Industry
Cross checks
Oil And Gas Ratings Methodology
Table: Structure Of BMI’s Oil & Gas Business Environment Ratings
Indicators
Table: BMI’s Upstream Oil & Gas Business Environment Ratings – Methodology
Table: BMI’s Downstream Oil & Gas Business Environment Ratings – Methodology
Sources

- SNP Petrom
- Romgaz
- Lukoil Romania
- Rompetrol
- OMV Romania
- Eni
- ExxonMobil
- MOL
- Regal Petroleum
- Aurelian Oil & Gas
- Melrose Resources