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Bahrain Oil And Gas Report Q2 2012
Business Monitor International, May 2012, Pages: 54
BMI View: Bahrain has a far smaller oil and gas resource base than its neighbours, but is a leading regional refined products exporter. In the coming decade, the country may begin importing LNG, but will also boost both oil and gas production. The country will continue to enjoy revenues from the Abu Saafa field, which is shared with Saudi Arabia, but will also continue importing Saudi crude oil to feed the Sitra refinery, which may be expanded. Despite the political unrest in 2011, Bahrain has not fallen in our riskreward ratings as the country remains open to foreign investment.
We highlight these trends and developments in Bahrain’s oil and gas sector:
- BMI sees Bahraini oil production rising to as much as 95,000 barrels per day (b/d) by 2021, in line with efforts to boost output at the mature Bahrain field. We expect oil consumption to grow to at least 60,000b/d. Increased oil flows from Saudi Arabia are also expected, potentially rising to 175,000b/d later in the current decade.
- We expect both oil and gas reserves to decline in the period 2012-21, pending new discoveries. Oil reserves are expected to fall to 112mn barrels (bbl) by 2021, with gas reserves falling to around 80bn cubic metres (bcm).
- Gas production and consumption are likely to grow in tandem to just around 19.5bcm by 2021. .. Risks to our forecasts include final approval for the expansion of the Sitra refinery, enlargement of the Saudi import pipeline, as well as for a proposed LNG import terminal to feed growing gas demand.
- State-run firms Bahrain Petroleum (BAPCO) and Saudi Aramco are considering a scheme to replace, upgrade, and redirect a pipeline that links Saudi oil fields to Bahrain’s only refinery, said Bahraini energy minister Abdul Hussein Mirza in March 2012. The project will increase the capacity of the pipeline to 350,000b/d, the minister told Dow Jones Newswires in an interview. The two countries are expected to finish the front-end engineering and design, or FEED, by the end of 2012, and open the tender in 2013. The estimated cost is around US$350mn.
At the time of writing, we assume an OPEC basket oil price for 2012 of US$99.38/bbl, falling to US$97.23/bbl in 2013. Global GDP in 2012 is forecast at 3.2%, up from an assumed 3.1% in 2011 reflecting a faltering recovery in the US and an uncertain eurozone debt situation. For 2013, growth is estimated at 3.7%.
Like many other African countries, Botswana's domestic new vehicle market makes up just a small percentage of the country's total car fleet, as used cars dominate the landscape. Although the used car segment is still popular in many African markets, sales of new passenger cars in Botswana grew by over 20% in 2007, 2008 and 2010, although they did dip in 2009 owing to the effects of the global financial crisis. BMI estimates that growth in 2011 came in at 10.6% and believes that the level seen in previous years may be difficult to achieve again, with average annual growth of just 8.1% forecast between 2012 and 2016.
We have made downward revisions to our real GDP growth forecasts for Botswana as a protracted global economic slowdown will temper the outlook for diamond exports, while the government's attempts to reduce its wage bill will weigh on final consumption. We are now forecasting economic expansion of 4.2% in 2012 and 5.4% in 2013, from previous estimates of 5.4% and 5.5% respectively. The solid outlook is driven by growing interest in the country's mining sector and the investment in infrastructure this will necessitate. However, subdued public and private consumption, coupled with uncertain external demand, tempers our forecasts. Having said this, estimated passenger car sales growth of 10.6% for 2011 is still respectable.
However, we forecast that annual car sales growth will average 8.1% over the rest of our forecast period (2012-2016) and we expect sales to total 0.04mn by the end of 2016. We expect commercial vehicles to outperform the car segment, owing to growth in key industrial sectors such as mining and construction.
As the government looks to diversify the economy away from a dependence on diamond exports (accounting for 70% of total exports, according to the latest trade statistics), we would expect further growth in these other industries to generate further demand for commercial vehicles. We forecast growth in the total commercial vehicle segment of more than 20% in 2012 and 2013 as companies looking to move into these sectors invest in fleets, slowing to a more sustainable average of 15.3% for 2013-2016.
One development that should support increased vehicle ownership in general, however, is a road improvement project. In August 2011, the OPEC Fund for International Development agreed to loan the government of Botswana US$40mn to help fund a project to improve 827km of roads in rural and semiurban areas. The World Bank will contribute a further US$186mn towards the total US$385.12mn budget, with Botswana's government providing the remaining amount.
With no domestic mass production, the new vehicle market is largely composed of imports and, based on the most recent available statistics, Japanese brands are the most popular. The Transport Communications Unit released a report in July 2011 showing that Toyota Motor accounted for 40% of imported new vehicles in 2009, followed by Nissan Motor in second, Germany's Volkswagen in third and Mazda Motor in fourth.
Business Monitor International's Bahrain 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 Bahrain's oil and gas industry.
BMI Industry View
Bahrain Oil and Gas SWOT
Global Energy Market Outlook
Libya Production Update: Main Fields (As Of Jan 9)
Global Oil Consumption, 000’s B/d, 2009-2016
Global Oil Production, 2009-2016
Regional Energy Market Outlook
Bahrain Energy Market Overview
Industry Forecast Scenario
Table: Industry Summary Data, 2008-2016
Table: Industry Summary Data, 2013-2021
Oil and Gas Reserves
Oil Supply And Demand
Gas Supply And Demand
Refining and Oil Products Trade
Key Risks To BMI’s Forecast Scenario
Oil and Gas Infrastructure
Table: Refineries In Bahrain
Oil Storage Facilities
Regional and Country Risk/Reward Ratings
Middle East Upstream Business Environment Ratings
Middle East Downstream Business Environment Ratings
Table: Key Domestic And Foreign Companies In The Bahrain Oil And Gas Sector
Licensing And Regulation
International Energy Relations
Table: Key Upstream Players
Table: Key Downstream Players
Bahrain Petroleum Company (BAPCO)
Bahrain National Gas Company (Banagas)
Gulf Petrochemical Industries – Summary
Others – Summary
Table : Oil Consumption, (000b/d) 2008-2016
Table : Oil Consumption (000b/d), 2014-2021
Table : Oil Production, (000b/d), 2008-2016
Table : Oil Production (000b/d), 2014-2021
Table : Refining Capacity,(000b/d) 2008-2016
Table : Refining Capacity (000b/d), 2014-2021
Table : Gas Consumption (bcm), 2008-2016
Table : Gas Consumption (bcm), 2014-2021
Table : Gas Production, (bcm) 2008-2016
Table : Gas Production (bcm), 2014-2021
Table: Net LNG Exports (bcm), 2009-2016
Glossary Of Terms
Methodology And Risks To Forecasts
Oil And Gas Risk/Reward Ratings Methodology
Table: BMI’s Oil & Gas Business Environment Ratings – Structure
Table: BMI’s Oil & Gas Upstream Ratings – Methodology
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology
How We Generate Our Industry Forecasts
- Bahrain Petroleum Company (BAPCO)
- Bahrain National Gas Company (Banagas)
- Chevron Bahrain
- Occidental Petroleum
- Gulf Petrochemical Industries
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