2009-02-16 18:13:02 -
Algeria Oil and Gas Report Q1 2009 - a new market research report on http://www.companiesandmarkets.com
www.companiesandmarkets.com/Summary-Market-Report/Algeria-Oil-an ..
The latest Algeria Oil & Gas Report from BMI forecasts that the country will account for 8.19% of African regional oil demand by 2013, while providing 18.4`% of supply. African regional oil use of 2.98mn barrels per day (b/d) in 2001 rose to 3.57mn b/d in 2007. It should average 3.65mn b/d in 2008 and then rise to around 4.17mn b/d by 2013. Regional oil production was 7.84mn b/d in 2001, and in 2007 averaged 10.31mn b/d. It is set to rise to 12.96mn b/d by 2013. In terms of natural gas, in 2007 the region consumed 100bn cubic metres (bcm), with demand of 183bcm targeted for 2013, representing 83.3% growth. Production of 193bcm in 2007 should reach 358bcm in
2013 (+85.2%), which implies net exports rising from 94bcm in 2007 to 175bcm by the end of the period. In 2007, Algerias share of regional gas demand was 24.48%, while it contributed 42.98% to supply. By 2013, we expect Algeria to account for 19.93% of regional gas consumption and 36.34% of African gas supply.
In Q308, we estimate that the OPEC basket price averaged US$113.60 per barrel down around 3.4% from the Q208 level. The OPEC basket price averaged US$112.41 in August and US$97.16/bbl in September. In October, we are assuming an average of around US$113.30. The estimated Q308 average prices for the main marker blends are now US$115.67 for Brent, US$117.22 for WTI and US$113.43/bbl for Russian Urals (Mediterranean delivery). Our projections for 2008 as a whole are unchanged from the last oil market report. We are still assuming an OPEC basket price average of US$110 per barrel for 2008. Based on recent price differentials, this implies Brent at US$113.33, WTI averaging US$114.58/bbl, and Urals at US$110.36/bbl. Our central view is that the OPEC basket price will fall from US$110/bbl in 2008 to US$96 in 2009, before settling around US$90/bbl in 2010 onwards.
In terms of our refined products forecasts, the BMI composite (Rotterdam, Singapore and New York) global indicator price for unleaded gasoline is expected to average approximately US$117.50/bbl during 2008. Our jet forecast for 2008 is just under US$141/bbl, up from US$89 in 2007. The 60% annual increase represents the second biggest for the key refined products. With gasoil, BMI is assuming a similar gain in 2008, to an average US$137/bbl. Naphtha is expected to exhibit more modest growth, rising from US$75 to US$106/bbl (+41%). During 2009, we are expecting products prices to follow the underlying crude trend lower, but to prove more resilient than the feedstock implying a recovery in refining margins. Gasoline in 2009 is estimated at US$103/bbl, with jet falling to US$127. Gasoil is expected to average US$122, with naphtha slipping to US$91/bbl.
Algerian real GDP growth is now forecast by BMI at 3.1% for 2008, following 2.6% in 2007. We are assuming 3.8% growth in 2009 and 2.4% in 2010/11, followed by 4.6% in 2012 and 3.1% in 2013. We therefore expect estimated oil demand of 270,000b/d in 2007 to rise by approximately 4.0% per annum to 341,000b/d in 2013. State oil company Sonatrach dominates the industry, operating in partnership with various international oil companies (IOCs), but accounting for 60% of the country´s oil output. Thanks largely to IOC investment, combined oil and gas liquids output is forecast to increase from 2.00mn b/d in 2007 to 2.39mn b/d in 2013, with exports heading towards 2.04mn b/d. The countrys OPEC membership and assigned production quota could frustrate volume growth ambitions. Gas production of 83bcm in 2007 should reach 130bcm by 2013. Consumption of 24.4bcm in 2007 is expected to rise to 36.4bcm by the end of the forecast period, providing exports of 93.6bcm.
Between 2007 and 2018, we are forecasting an increase in Algerian oil and gas liquids production of 30.0%, with volumes rising steadily from 2.00mn b/d in 2007 to 2.60mn b/d by the end of the 10-year forecast period. Oil consumption between 2007 and 2018 is set to increase by 54.0%, with growth slowing to an assumed 4.0% per annum towards the end of the period and the country using 415,000b/d by 2018. Gas production is expected to rise to 180bcm by the end of the period. With demand rising by 109.3% between 2007 and 2018, there should be export potential increasing from 58.6bcm to 128.9bcm in the form of liquefied natural gas (LNG) and by pipeline. Details of the new BMI 10-year forecasts can be found in the appendix to this report, which provides global, regional and country-specific projections.
Algeria shares sixth place with Egypt in BMIs updated Upstream Business Environment rating, and is four points behind regional lightweight Republic of Congo (RoC). It has the potential to move higher over the medium term. The countys score benefits from healthy oil and gas reserves, a large number of nonstate companies active in the upstream sector and decent licensing terms. It should be able to break free of Egypt and is at little risk from South Africa below it. The country is near the top of the league table in BMIs updated Downstream Business Environment rating, with some high scores, but progress further up the rankings unlikely. It is ranked third behind South Africa and Egypt, thanks to high scores for gas consumption, nominal GDP, likely refining capacity expansion and oil demand growth.
