|
|
 |
|
Viewing report
|
|
|
|
Azerbaijan Oil and Gas Report Q2 2011
Business Monitor International, April 2011, Pages: 96
The Azebaijan 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 Azebaijan's oil and gas industry.
The latest Azerbaijan Oil & Gas Report forecasts that the country will account for 1.52% of Central and Eastern European (CEE) regional oil demand by 2015, while providing 9.45% of supply. CEE regional oil use of 5.42mn barrels per day (b/d) in 2001 rose to an estimated 6.09mn b/d in 2010. It should increase to around 6.93mn b/d by 2015. Regional oil production was 8.89mn b/d in 2001 and in 2010 averaged an estimated 13.78mn b/d. 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 rose to an estimated 7.69mn b/d in 2010 and is forecast to reach 8.15mn b/d by 2015. Azerbaijan and Kazakhstan have the greatest production growth potential, although Russia will remain the most important exporter.
In terms of natural gas, the region in 2010 consumed an estimated 636.3bn cubic metres (bcm), with demand of 736.3bcm targeted for 2015, representing 15.7% 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 217.9bcm by the end of the period. Azerbaijan’s share of gas consumption in 2010 was an estimated 1.27%, while its share of production is put at 2.22%. By 2015, its share of gas consumption is forecast to be 1.57%, with the country accounting for 2.20% of supply.
The 2010 full-year outturn was US$77.45/bbl for OPEC crude, which delivered an average for North Sea Brent of US$80.34/bbl and for West Texas Intermediate (WTI) of US$79.61/bbl. The BMI price target of US$77 was reached thanks to the early onset of particularly cold weather, which drove up demand for and the price of heating oil during the closing weeks of the year.
The 2011 supply, demand and price forecasts in early January, targeting global oil demand growth of 1.53% and supply growth of 1.91%. With OECD inventories at the top of their five-year average range, we set a price forecast of US$80/bbl average for the OPEC basket in 2011. The unprecedented wave of popular uprisings in the Middle East and North Africa (MENA) that followed the removal of Tunisian President Ben Ali on January 14 has obviously fundamentally altered our outlook, particularly since the unrest spread to Libya in mid-February.
Taking into account the risk premium that has been added to crude prices in response to actual and perceived threats to supply, we have now raised our benchmark OPEC basket price forecast from US$80 to US$90/bbl for 2011 and from US$85 to US$95/bbl for 2012. Based on our expectations for differentials, this gives a forecast for Brent at US$94/bbl in 2011 and US$99/bbl in 2012. We have kept our long-term price assumption of US$90/bbl (OPEC basket) in place for the time being while we wait to see what path events in the MENA region take. We have also retained our existing supply and demand forecasts until the scheduled quarterly revision at the start of April.
Azeri real GDP rose by an estimated 5.0% in 2010. The report forecasts average annual growth of 5.8% in 2011-2015. Domestic oil consumption, having tumbled since the 1990s, should now have resumed a growth tack, and is estimated at an average of 7% per annum. By 2015, the country is projected to be using 105,000b/d of oil. The main government vehicle, Socar, currently accounts for almost half of domestic oil production but, in partnership with international oil companies (IOCs), should raise national output from an estimated 1.06mn b/d in 2010 to 1.43mn b/d by 2015. Gas production should increase from an estimated 17.5bcm in 2010 to 21.0bcm during the forecast period.
Between 2010 and 2020, we are forecasting an increase in Azeri oil and gas liquids production of 22.2%, with volumes reaching a peak of 1.45mn b/d in 2016/17, before falling to 1.30mn b/d by the end of the 10-year forecast period. Oil consumption between 2010 and 2020 is set to increase by 96.7%, with growth averaging an assumed 7.0% per annum towards the end of the period and the country using 147,000b/d by 2020. Gas production should rise from the estimated 2010 level of 17.5bcm to 32.0bcm by 2020, providing export potential increasing to at least 17.2bcm.
Azerbaijan holds second place, behind only Kazakhstan, in BMI’s composite Business Environment (BE) ratings table, which combines upstream and downstream scores. The country continues to occupy second place in BMI’s updated upstream Business Environment ratings, four points behind neighbour Kazakhstan. Its oil and gas production growth outlook, asset immaturity, high reserves-to-production ratios (RPR) and competitive landscape work in the country’s favour, but are undermined by a relatively unappealing risk environment. Azerbaijan is around the mid-point of the league table in BMI’s downstream Business Environment ratings, now sharing seventh place with Hungary thanks to some high scores, with long-term progress further up the rankings a possibility. The low level of retail site intensity is a strong suit, along with region-leading oil demand growth prospects.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
