Iraq Oil and Gas Report Q4 2012
Business Monitor International, November 2012, Pages: 89
BMI View:
Iraq has the greatest potential for oil production growth in the Middle East region. The lofty government-set goals may remain out of reach, thanks to infrastructure issues, political instability,
investment lag and likely conflicts with OPEC, but production could well exceed 6mn barrels per day
(b/d) by 2017 and be heading towards 8mn b/d by 2021. Current forecasts among third parties vary wildly, with no close consensus likely until IOCs bring key projects nearer to completion.
We highlight the following trends and developments in Iraq’s oil and gas sector:
- Unappealing licensing terms, regulatory uncertainty and ongoing security concerns continue to undermine the development of Iraq’s post-war oil industry. Baghdad’s last licensing round drew just three successful bids. Without improved terms and increased international oil company
(IOC) interest, Iraq will find it very difficult to meet its extremely ambitious oil production target of 11mn b/d by 2020.
- Iraqi crude oil production in August 2012 reached its highest level in more than three decades at 3.07mn b/d. Increased shipments from the southern ports also lifted exports to a new high of 2.57mn b/d, according to Paris-based International Energy Agency (IEA). Additional output is coming from a number of joint venture projects, including ExxonMobil’s West Qurna-1, Eni’s Zubair field and the China National Petroleum Corporation (CNPC)-led Halfaya project.
- BMI sees Iraq crossing the 6mn b/d oil production mark by 2017, with the largest contributions being made by the major southern fields, such as Rumaila, Zubair and West Qurna-I. Much of this increase depends on the successful execution of the water injection project being led by USbased ExxonMobil. Disagreements between Baghdad and Exxon over the US group’s interest in Kurdish oil could slow West Quma progress.
- Consumption of oil is set to exceed 1mn b/d by 2018, based on higher demand for refined fuels as the economy expands and from the country’s growing power needs. The huge increase in crude production and export volumes implies a spectacular rise in state revenues, which should filter through to much greater macroeconomic strength.
- Iraq’s refining segment may struggle to attract the investment necessary to substantially reduce imports of refined fuels. We have pencilled in an ongoing programme of refinery expansion, but plans are somewhat vague and domestic capacity looks set to remain well below refined products consumption levels.
- Iraq’s natural gas sector has substantial potential, both through the capture of associated gas
(through the Basra Gas joint venture) and through the development of non-associated fields. We see gas output ramping up significantly after 2013, with small exports starting as early as 2017.
We are assuming an average OPEC basket oil price for 2012 of US$107.05/bbl, falling to US$99.10 in 2013. By 2016, we expect the price to average US$93.25, edging lower to US$91.50/bbl by 2021. Based on these assumptions and BMI production forecasts, Iraq’s oil revenues should increase from an estimated US$86.9bn in 2012 to US$221.5bn by 2021.
BMI Industry View 7
SWOT Analysis 9
Iraq Oil and Gas SWOT 9
Global Energy Market Outlook 10
Oil: Getting Closer To Emerging Markets Inflection Point 10
Table: Oil Consumption Forecasts, 2010-2016 (’000b/d) 12
Table: Oil Production Forecasts, 2010-2016 (’000b/d) 14
Regional Energy Market Outlook 18
Iraq Energy Market Overview 25
Table: Upstream Projects Database 26
Industry Forecast Scenario 28
Table: Iraq Oil & Gas – Historical Data And Forecasts, 2009-2016 28
Table: Iraq Oil & Gas – Long Term Forecast, 2014 - 2021 29
Oil And Gas Reserves 30
Oil Supply And Demand 31
Gas Supply And Demand 32
LNG 33
Refining And Oil Products Trade 33
Revenues/Import Costs 34
Key Risks To our Forecast Scenario 34
Oil And Gas Infrastructure 35
Oil Refineries 35
Table: Refineries In Iraq 37
Oil Terminals/Ports 37
Oil Pipelines 38
LNG Terminals 39
Gas Pipelines 39
Regional And Country Risk/Reward Ratings 41
Table: Oil and Gas Risk/Reward Ratings 42
Table: Middle East Upstream Oil and Gas Risk/Reward Ratings 43
Table; Middle East Downstream Oil and Gas Risk/Reward Ratings 43
Iraq Upstream Rating – Overview 44
Iraq Upstream Rating – Rewards 44
Iraq Upstream Rating – Risks 44
Iraq Downstream Rating – Overview 44
Competitive Landscape 45
Executive Summary 45
Overview/State Role 46
Government Policy 46
Hydrocarbons Law 48
Licensing Rounds 50
Table: Fields Licensed Under First Bidding Round (June 2009) 51
Table: Fields Licensed Under Second Bidding Round (December 2009) 53
Table: Fields Licensed Under Third Bidding Round (October 2010) 55
International Energy Relations 57
Company Monitor 59
China National Petroleum Corporation (CNPC) – Summary 59
Royal Dutch Shell – Summary 60
Addax Petroleum – Summary 62
Genel Energy – Summary 62
RAK/DNO International – Summary 63
Heritage Oil – Summary 63
Gulf Keystone Petroleum – Summary 64
BP – Summary 64
Kogas – Summary 65
Eni – Summary 66
ExxonMobil – Summary 66
Lukoil – Summary 68
Statoil – Summary 68
Gazprom Neft – Summary 68
MOL – Summary 69
Chevron – Summary 69
Total – Summary 70
Pearl Petroleum – Summary 70
Türkiye Petrolleri Anonim Ortakligi (TPAO) – Summary 71
Marathon Oil – Summary 71
Murphy Oil – Summary 71
Repsol – Summary 71
Others – Summary 71
Oil Services Companies – Summary 74
Middle East – Regional Appendix 75
Table: Oil Consumption, 2009-2016 (’000b/d) 75
Table: Oil Consumption, 2014-2021 (’000b/d) 75
Table: Oil Production, 2009-2016 (’000b/d) 76
Table: Oil Production, 2014-2021 (’000b/d) 76
Table : Refining Capacity, 2009-2016 (’000b/d) 76
Table: Refining Capacity, 2014-2021 (’000b/d) 77
Table: Gas Consumption, 2009-2016 (bcm) 77
Table: Gas Consumption, 2014-2021 (bcm) 78
Table: Gas Production, 2009-2016 (bcm) 78
Table: Gas Production, 2014-2021 (bcm) 79
Table: Net LNG Exports, 2009-2016 (bcm) 79
Table: Net LNG Exports, 2014-2021 (bcm) 79
Methodology And Risks To Forecasts 80
Glossary Of Terms 81
Table: Glossary Of Terms 81
Oil And Gas Risk/Reward Ratings Methodology 83
Ratings Overview 83
Table: BMI’s Oil & Gas Business Environment Ratings – Structure 84
Indicators 85
Table: BMI’s Oil & Gas Upstream Ratings – Methodology 85
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology 86
BMI Methodology 87
How We Generate Our Industry Forecasts 87
Energy Industry 87
Cross checks 88
Sources 88
Company Monitor
China National Petroleum Corporation (CNPC) – Summary
Royal Dutch Shell – Summary
Addax Petroleum – Summary
Genel Energy – Summary
RAK/DNO International – Summary
Heritage Oil – Summary
Gulf Keystone Petroleum – Summary
BP – Summary
Kogas – Summary
Eni – Summary
ExxonMobil – Summary
Lukoil – Summary
Statoil – Summary
Gazprom Neft – Summary
MOL – Summary
Chevron – Summary
Total – Summary
Pearl Petroleum – Summary
Türkiye Petrolleri Anonim Ortakligi (TPAO) – Summary
Marathon Oil – Summary
Murphy Oil – Summary
Repsol – Summary
Others – Summary
Oil Services Companies – Summary
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