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Iraq Oil and Gas Report Q4 2011
Business Monitor International, Oct 2011, Pages: 86
'Iraqi real GDP rose by an estimated 2.9% in 2010, and we are forecasting average annual growth of 5.7% in 2010-2015. We expect oil demand of an estimated 720,000b/d in 2011 to rise to 893,000b/d in 2015, depending on investment in infrastructure and the development of domestic production. Liquids production is set to rocket to as much as 6.2mn b/d by 2015 from an estimated 2.72mn b/d in 2011, although infrastructure development is key. Liquids output is set to 7.97mn b/d by 2020 with consumption at around 1.14mn b/d by that year.
Gas consumption is set to grow from 1.6bcm to 21.6bcm in 2011-2015, pending project progress at the Basra Gas joint venture and development of non-associated fields. Gas production will grow at a slightly higher rate, and we see pipeline gas exports from 2013. Gas production is set to grow to as much as 33bcm by 2020, with consumption at around 28bcm by that year.
We forecast that Iraq will account for 10.23% of Middle East regional oil demand by 2015, while providing 20.81% of supply. Iraq’s estimated share of regional gas consumption in 2010 will have been 1.44%, while its share of production is put at 1.08%. By 2015, its share of gas consumption is forecast to be 4.67%, with the country accounting for 4.3% 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.
In light of the unrest in the Middle East and North Africa (MENA) region in H111, as well as the oil supply effects of the Libyan civil war, we have raised our benchmark OPEC Basket price forecast from US$80 to US$101.90/bbl for 2011 and from US$85 to US$97.50/bbl for 2012. We expect Brent to average US$106/bbl in 2011 and US$101.50/bbl in 2012. We have kept our long-term (2014-20) price assumption of US$90/bbl (OPEC Basket) in place.
Iraq now ranks fourth, between Qatar and Bahrain, among Middle Eastern countries in BMI’s composite Business Environment Ratings (BERs) table, which combines upstream and downstream scores. It holds fourth place in BMI’s updated upstream ratings, with its strong prospects weighed down by risks to realisation of full potential. Iraq is close to the bottom of the Middle Eastern countries in BMI’s updated downstream ratings, with only Kuwait ranking below it.
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