2009-02-23 05:35:02 -
Saudi Arabia Oil and Gas Report Q1 2009 - a new market research report on http://www.companiesandmarkets.com
www.companiesandmarkets.com/Summary-Market-Report/Saudi-Arabia-O ..
The latest Saudi Arabia Oil & Gas Report from BMI forecasts that the country will account for 21.16% of Middle Eastern (ME) regional oil demand by 2013, while providing a dominant 40.84% of supply.
Regional oil use of 8.24mn barrels per day (b/d) in 2001 rose to 10.61mn b/d in 2007. It should average 10.86mn b/d in 2008 and then rise to around 12.10mn b/d by 2013. Regional oil production was 22.87mn b/d in 2001, and in 2007 averaged 25.24mn b/d. It is set to rise to 29.87mn b/d by 2013. In terms of natural gas, the region in 2007 consumed 370bn cubic metres (bcm), with demand of 574bcm targeted for 2013, which represents 55% growth. Production of 363bcm in 2007
should reach 618bcm in 2013 (+70%), which implies net exports rising to 44bcm by the end of the period. Saudi Arabia in 2007 consumed 20.50% of the regions gas, with its market share forecast at 18.11% by 2013. It contributed 20.91% to 2007 regional gas production and, by 2013, will account for 16.80% of supply.
In Q308, we estimate that the OPEC basket price averaged US$113.60 per barrel (bbl), down around 3.4% from the Q208 level. The OPEC basket price averaged US$112.41/bbl in August and US$97.16/bbl in September. In October, we are assuming an average of around US$113.30/bbl. The estimated Q308 average prices for the main marker blends are now US$115.67/bbl for Brent, US$117.22/bbl for West Texas Intermediate (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/bbl for 2008. Based on recent price differentials, this implies Brent at US$113.33/bbl, 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/bbl 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/bbl 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/bbl 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/bbl. Gasoil is expected to average US$122/bbl, with naphtha slipping to US$91/bbl.
Saudi real GDP growth is now forecast by BMI at 5.7% for 2008, following 3.4% in 2007. We are assuming 5.1% growth in 2009, 3.6% in 2010, 3.4% in 2011, followed by 3.0% in 2012 and 3.9% in 2013. We expect oil demand to rise from 2.15mn b/d in 2007 to 2.56mn b/d in 2013, representing 3.0% annual growth that lags our underlying economic assumptions. State-owned Saudi Aramco is wholly responsible for oil and liquids production, forecast to rise from 10.41mn b/d in 2007 to 12.20mn b/d by 2012. There is no foreign involvement in the upstream oil segment, although international oil companies (IOCs) could have a role in future gas field development and are major players in refining and petrochemicals. Gas production should reach 103.9bcm by 2013, up from 75.9bcm in 2007. Consumption will match the trend, leaving Saudi with no import requirement or export potential during the period.
Between 2007 and 2018, we are forecasting an increase in Saudi oil production of 29.7%, with volumes rising steadily to 13.5mn b/d by the end of the 10-year forecast period. Oil consumption between 2007 and 2018 is set to increase by 37.1%, with growth slowing to an assumed 3.0% per annum towards the end of the period and the country using 2.95mn b/d by 2018. Gas production is expected to rise from 76bcm to 117bcm by the end of the period. With 2007-2018, demand growth of 54.5%, this provides a balanced market throughout the period. 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.
Saudi Arabia is still ranked a surprising last place in BMIs updated Upstream Business Environment rating. It clearly has an unrivalled oil resource and production position, but this is not sufficient to keep Saudi away from the foot of the regional league table. It is three points behind Bahrain, and shows few signs of having the ability to challenge its less well-equipped neighbour. The country is just in the lower half of the league table in BMIs Downstream Business Environment rating, with a few high scores and longer-term progress up the rankings a possibility. It is ranked sixth, just behind Iran, thanks largely to high scores for refining capacity, oil and gas demand, and nominal GDP. Generally healthy country risk factors help bolster the overall score, but Kuwait below could ultimately challenge for Saudis current position.
