Angola Oil and Gas Report Q2 2012

BMI View: With several new projects such as Pazflor (220,000b/d) and PSVM (150,000b/d) expected to come on-stream in the next few years, we see Angolan oil output rising substantially in the coming decade. Attempts to cut gas flaring boost the outlook for gas production as well. Nevertheless, OPEC quotas, the risk of project delays and the Angolan political environment still imply a significant amount of uncertainty.

Main trends and developments we highlight for Angola’s oil and gas sector are as follows:

BMI expects oil production to increase from approximately 1,982,000 barrels per day (b/d) in 2011 to 2,729,000 in 2021, as ambitious new projects, such as Pazflor (220,000b/d) and PSVM (150,000b/d), come onstream.

Consumption of crude is likely to rise at an average rate of 9.90% from 2011 to 2021. This very high growth is boosted by the country’s double-digit GDP growth, as the economy enjoys a catching up phenomenon following nearly three decades of civil war. We therefore anticipate that consumption will rise from an estimated 81,000b/d in 2011 to hit 208,000b/d by 2021.

BMI forecasts that gas production will increase from 0.74bn cubic metres (bcm) in 2011 to 7.23bcm by 2021, as the authorities and companies reduce the practice of flaring and start monetising associated gas resources. Gas production is to be boosted further by new projects with considerable associated gas production, such as Pazflor (1.5bcm) and PSVM (2.5bcm).

Gas demand is set to rise at an average rate of 2.23% although this hides a more irregular pace. Relatively low gas growth when compared to growth in gas production and oil consumption can be explained by the fact that gas plays virtually no role in the country’s electricity generation and that there are no plans to expand its share in the energy mix. As a result, we see gas consumption rising from 0.74bcm in 2011 to 0.93bcm by 2021.

Non-subsalt Angolan oil reserves are likely to reach a peak in the coming decade, although they are set to increase at first thanks to exploration potential; not only in the well known Lower Congo and Kwanza basin, but also in the southern Namibe basin. There is a substantial upside risk to our forecasts in the form of the subsalt acreages that were put on offer in 2011. However, with still limited information on the commercial viability and speed at which these resources could be monetised, we have decided not to include them in our forecast until more information is made available. Oil reserves are forecast to peak at about 10bn barrels (bbl) in 2014-2016 before coming down to 8.8bn bbl by 2021, whereas gas reserves are expected to rise steadily throughout the period from 283bcm in 2011 to 310bcm in 2021.

In terms of infrastructure, the authorities have ambitious plans in LNG and refining. The Angola LNG project appears to be on target to meet the 2012 completion deadline. However, the 65,000b/d Luanda refinery is still struggling and has low utilisation rates. The 200,000b/d SonaRef project is stalling but we still expect it to come on-stream in the next 10 years, albeit with some delays. As for the 200,000b/d Soyo plant, it is still early stages and we deem it unlikely to concretise before 2021.

Angola’s dependence on oil prices leads to high volatility in the country’s export revenues. Our assumptions of a slower growth in China, a faltering recovery in the US and a worsening eurozone debt crisis, clearly pose a threat to global demand. As a result, we assume OPEC basket oil prices to fall from US$107.52/bbl in 2011 to US$99.38/bbl in 2012, thus creating a downside risk for the Angolan macroeconomic outlook.

Business Monitor International's Angola 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 Angola's oil and gas industry.

BMI Industry View
SWOT Analysis
Angola Oil and Gas SWOT
Global Energy Market Outlook
Table: Libya Production Update: Main Fields (As Of January 9 2012)
Table: Global Oil Consumption 2009-2016, 000b/d
Table: Global Oil Production 2009-2016, 000b/d
Regional Energy Market Outlook
Angola Energy Market Overview
Table: Upstream Projects Database
Industry Forecast Scenario
Oil And Gas Reserves
Table: Industry Summary Data, 2009-2016
Table: Industry Summary Data, 2014-2021
Oil Supply And Demand
Gas Supply And Demand
Export Revenues
Key Risks To BMI’s Forecast Scenario
Oil And Gas Infrastructure
Oil Refineries
Table: Refineries In Angola
LNG Terminals
Regional and Country Risk/Reward Ratings
Table: Upstream Risk / Reward Ratings
Table: Downstream Risk / Reward Ratings
Angola Upstream Rating – Overview
Angola Upstream Rating – Rewards
Angola Upstream Rating – Risks
Angola Downstream Rating – Overview
Angola Downstream Rating – Rewards
Angola Downstream Rating – Risks
Competitive Landscape
Table: Key Players In Angola’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
Sociedade Nacional de Combustíveis de Angola (Sonangol)
Chevron
Esso Exploration Angola
BP Angola
Total Exploration Angola
Eni Angola Production
Statoil – Summary
Sinopec – Summary
Petrobras – Summary
Marathon Oil – Summary
Cobalt International Energy – Summary
Repsol YPF – Summary
Others – Summary
Africa – Regional Appendix
Table: Oil Consumption, (000b/d) 2009-2016
Table: Oil Consumption, (000b/d) 2014-2021
Table: Oil Production, (000b/d) 2009-2016
Table: Oil Production, (000b/d) 2014-2021
Table: Refining Capacity, (000b/d) 2009-2016
Table: Refining Capacity, (000b/d) 2014-2021
Table: Gas Consumption, (bcm) 2009-2016
Table: Gas Consumption, (bcm) 2014-2021
Table: Gas Production, (bcm) 2009-2016
Table: Gas Production, (bcm) 2014-2021
LNG Net Exports, (bcm) 2009-2016
LNG Net Exports, (bcm) 2014-2021
Methodology And Risks To Forecasts
Glossary Of Terms
Oil And Gas Risk/Reward Ratings Methodology
Ratings Overview
Table: BMI’s Oil & Gas Business Environment Ratings – Structure
Indicators
Table: BMI’s Oil & Gas Upstream Ratings – Methodology
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology
BMI Methodology
How We Generate Our Industry Forecasts
Energy Industry
Cross checks
Sources

- Sociedade Nacional de Combustíveis de Angola (Sonangol)
- Chevron
- Esso Exploration Angola
- BP Angola
- Total Exploration Angola
- Eni Angola Production
- Statoil
- Sinopec
- Petrobras
- Marathon Oil
- Cobalt International Energy
- Repsol YPF

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