The latest Germany Oil & Gas Report from BMI forecasts that the country will account for 17.17% of developed European regional oil demand by 2013, while making a contribution of just over 1.0% to supply. In Developed Europe, overall oil consumption reached an estimated 13.75mn barrels per day (b/d) in 2008. It is set to rise to around 14.04mn b/d by 2013. Developed Europe regional oil production was 6.97mn b/d in 2001, and in 2008 averaged an estimated 5.0mn b/d. It is set to fall to just 3.80mn b/d by 2013. Oil imports are growing steadily, because supply is contracting and demand is rising, albeit slowly. In 2008, net crude imports were an estimated 8.75mn b/d. By 2013, they are expected to have reached 10.24mn b/d. In terms of natural gas, the Developed Europe region in 2008 consumed an estimated 440bn cubic metres (bcm), with demand of 490bcm targeted for 2013, representing 11.2% growth. Production of an estimated 269bcm in 2007 should rise to 279bcm in 2013, which implies net imports rising from the estimated 2008 level of 171bcm to some 211bcm by the end of the period. Germany's share of gas consumption in 2008 was an estimated 18.86%, while it accounted for 5.39% of production. By 2013, its share of gas consumption is forecast to be 19.0%, with a 4.83% share of production. In terms of the OPEC basket of crudes, the average price in Q408 was an estimated US$52.53 per barrel (bbl), down sharply from the US$113.49 recorded during the previous three months. The full year 2008 average is put by BMI at US$94.08/bbl, representing a 36% year-on-year (y-o-y) increase. North Sea Brent, WTI and Russian Urals are believed to have averaged US$97.06, US$99.33 and US$94.56/bbl respectively during 2008. For 2009, we are now assuming an average OPEC basket price of US$52/bbl (- 45% y-o-y), with Q109 expected to deliver US$40.00. The new full year forecast implies Brent crude at US$55.65, WTI averaging US$56.63/bbl and Urals at US$52.48 for 2009. For 2010, we expect to see a recovery to US$58.00/bbl for the OPEC price, gaining further ground to US$65.00 in 2011 and US$70.00/bbl in 2012. We are now using a long-term price assumption of US$70.00 for 2013-2018, down from our previous assumption of US$90.00/bbl. In 2009, we see monthly average global wholesale gasoline prices ranging from US$38.90 in January to a high of US$64.90 reached in August and in December, providing a full year average of US$56.20 - just over 55% of the 2008 outturn. The 2009 BMI gasoil forecast is for an average price of US$67/bbl, assuming a monthly low of US$46.40 in January and a high of US$77.30/bbl in December. The full-year outturn represents a 45% downturn from the 2008 level. For 2009, the monthly average jet fuel price is forecast to range from US$47.90 in January to US$79.80/bbl in August, proving an annual level of US$69.20/bbl. German real GDP growth is forecast by BMI to fall 3.2% in 2009, down from estimated growth of 1.1% in 2008. We are assuming an average 1.0% growth in 2009-2013. Our forecast is for minimal oil demand growth to 2013, with end-period consumption at no more than 2.41mn b/d after declining demand in 2008/09. Gas consumption is now more than 20% of primary energy demand, accounting for 11% of power generation supply. Our estimate is for gas demand to rise from an estimated 83bcm in 2008 to 93bcm by 2013. Germany's gas production is forecast to fall from an estimated 14.5bcm in 2008 to 13.5bcm over the period. Between 2007 and 2018, we are forecasting a decrease in German oil and gas liquids consumption of 4.2%, with volumes peaking at 2.41mn b/d in 2011-13, then heading lower to 2.29mn b/d by the end of the 10-year forecast period. Production is set to fall from an estimated 60,000b/d to just 30,000b/d during the same period. Gas demand should rise from the estimated 2008 level of 83bcm to a peak of 93bcm by 2013/2014, before slipping back to 90bcm by 2016-2018. Imports are expected to peak at 79.5bcm in 2013/2014, in the form of pipeline volumes. Details of BMI's 10-year forecasts can be found in the Appendix to this report, which provides global, regional and country-specific projections. BMI's long-term political risk rating for Germany is currently 85.8, in line with the Developed Markets average and behind only the UK and Norway in Developed Europe. Our long-term economic risk rating for Germany is 66.9 (behind Spain, Belgium, the UK and Norway in developed Europe), which compares with a Developed Markets average of 68.9. Germany has a privatised energy sector operating under EU guidelines. There is a small upstream oil and gas segment, with international oil company (IOC) and local company involvement. Downstream oil features a mixture of IOCs and domestic companies, while gas and electricity interests remain in largely German (non-state) hands.
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