2008-09-25 09:01:00 -
Argentina Oil and Gas Report Q3 2008 - a new market research report on http://www.companiesandmarkets.com www.companiesandmarkets.com/Summary-Market-Report/Argentina-Oil- ..
The latest Argentina Oil & Gas Report from BMI forecasts that the country will account for 6.28% of Latin America regional oil demand by 2012, while providing 6.25% of supply. Latin America regional oil use of 6.84mn barrels per day (b/d) in 2001 reached an estimated 7.28mn b/d in 2007. It should rise to around 8.16mn b/d
by 2012. In terms of natural gas, the region in 2007 consumed an estimated 197bcm, with demand of 267bcm targeted for 2012, representing growth of 35.6% between 2007 and 2012. Production of an estimated 208bcm in 2007 should reach 282bcm in 2012, which implies end-period net exports of around 15bcm per annum. Argentina´s share of gas consumption in 2007 was an estimated 21.79%, while its share of production was 22.89%. By 2012, its share of gas consumption is forecast to be 18.18%, with the country accounting for 18.10% of supply. In Q108, we estimate that the OPEC basket price averaged US$92.64 per barrel up around 9% from the Q407 level. The OPEC basket price had exceeded US$102 by the middle of March, slipping back towards US$96/bbl later in the month. The estimated Q108 average prices for the main marker blends are now US$96.54 for Brent, US$97.31 for WTI and US$93.44/bbl for Russian Urals (Mediterranean delivery). Our projections for 2008 as a whole are revised upwards from BMIs last quarterly report. We are now assuming an OPEC basket price average of US$81 per barrel for 2008, compared with the US$74 estimate provided by our last quarterly report. Based on recent price differentials, this implies Brent at US$84.71, WTI averaging US$85.63/bbl, and Urals at US$81.88/bbl. Real GDP growth is forecast by BMI at 6.0% for 2008, down from an estimated 8.7% in 2007. We are assuming 4.1% growth in 2009, 3.6% in 2010, followed by 3.9% in 2011 and 3.7% in 2012. A new state entity (Enarsa) partners international oil companies (IOCs) in supporting output growth efforts, operating alongside regional heavyweight RepsolYPF and others. We are assuming oil production of no more than 700,000b/d by 2012, with the country expected to pump 710,000b/d in 2008. Consumption is forecast to increase by around 2.5% per annum to 2012, implying demand of 513,000b/d by the end of the forecast period. The crude oil export capability would therefore be approximately 187,000b/d by 2012. Gas production is forecast to increase from an estimated 47.5bcm in 2007 to 51bcm over the period. Between 2007 and 2018, we are forecasting a decrease in Argentinean oil production of 27.0%, with crude volumes peaking in 2009 at 730,000b/d, before falling steadily to 515,000b/d by the end of the 10- year forecast period. Oil consumption between 2007 and 2018 is set to increase by 25.6%, with growth slowing to an assumed 1.5% per annum towards the end of the period and the country using 569,000 b/d by 2018. Gas production is expected to rise gradually, from around 47.5bcm in 2007 to a peak of 52.0bcm in 2011, before slipping back to 37.5bcm by 2018. With demand growth of 28%, this provides export potential falling from a forecast peak of 4.9bcm in 2010 to imports of 17.4bcm by 2018. Details of the new BMI 10-year forecasts can be found in the Appendix of this report, which provides global, regional and country-specific projections. Argentina occupies sixth place in BMIs newly revised Upstream Business Environment rating, above Ecuador. Its gas resources, largely privatised oil sector, licensing regime and competitive landscape work in the countrys favour, but are undermined by an absence of growth potential, asset maturity and unappealing risk environment. Scope exists for Argentina to break further away from Ecuador, where risk issues abound, but Trinidad looks set to move out of reach. The country is well up the league table in BMIs newly-revised Downstream Business Environment rating, reflecting its privatised refining and marketing segment, substantial capacity and competitive environment, offset by only moderate growth potential and a relatively high level of retail site intensity. Trinidad is immediately behind it in the regional rankings, but there is little to choose between the two countries and Argentina isnt at great risk of being overhauled during the next few quarters.
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