Jan. 25, 2010 -
PRLog -- The latest Egypt Oil & Gas Report from BMI forecasts that the country will account for 18.56% of African regional oil demand by 2013, while providing 5.67% of supply. African regional oil use of 2.98mn barrels per day (b/d) in 2001 rose to an estimated 3.65mn b/d in 2008. It should average 3.73mn b/d in 2009 and then rise to around 4.15mn b/d by 2013. Regional oil production was 7.84mn b/d in 2001, and in 2008 averaged an estimated 10.46mn b/d. It is set to rise to 12.52mn b/d by 2013. South Africa in 2008 accounted for an estimated 0.13% of regional oil supply, and its market share is expected to be 0.13% by the end of the forecast period. Oil exports are growing steadily, because demand growth is lagging the pace of supply expansion. In 2001, the region was exporting an average 4.86mn b/d. This total had risen to an estimated 6.80mn b/d in 2008 and is forecast to reach 8.36mn b/d by 2013. In terms of natural gas, the region in 2008 consumed an estimated 106bcm, with demand of 182bn cubic metres (bcm) targeted for 2013. Production of an estimated 214bcm in 2008 should reach 358bcm in 2013, which implies net exports rising from an estimated 107bcm in 2008 to 176bcm by the end of the period. Egypt in 2008 consumed an estimated 30.29% of the region's gas, with its market share set to be 22.78% by 2013. It contributed an estimated 25.69% to 2008 regional gas production and, by 2013, will account for 23.76% of supply. 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. 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/bbl for the OPEC price, gaining further ground to US$65.00 in 2011 and US$70/bbl in 2012. We are now using a long-term price assumption of US$70 for 2013-2018, down from our previous assumption of US$90/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. Egyptian real GDP growth is forecast by BMI at 3.7% for 2009, down from an estimated 7.2% in 2008. We are assuming 3.0% growth in 2010, 4.8% in 2011 and 4.5% in 2012, followed by 4.4% in 2013. We expect oil demand to rise from an estimated 671,000b/d in 2008 to 771,000b/d in 2013, subject to national efforts to conserve oil and increase the use of gas. State oil company Egyptian General Petroleum Corporation (EGPC) operates in partnership with various international oil companies (IOCs), and alone accounts for just 20% of the country's oil output. In spite of higher recent IOC investment, combined oil and gas liquids output is forecast to decrease from an estimated 730,000b/d in 2008 to 710,000b/d in 2013. Gas production should reach 85bcm by 2013, up from an estimated 55bcm in 2008. Consumption is expected to rise from 33bcm to 42bcm by the end of the forecast period, providing exports of 43bcm. Between 2007 and 2018, we are forecasting a decrease in Egyptian oil and gas liquids production of 11.9%, with volumes slipping steadily to 626,000b/d by the end of the 10-year forecast period. Oil consumption between 2007 and 2018 is set to increase by 37.3%, with growth slowing to an assumed 3.0% per annum towards the end of the period and the country using 894,000b/d by 2018. Gas production is expected to rise to 106bcm by the end of the period. With demand rising by 58.2% between 2007 and 2018, there should be export potential increasing to 55.4bcm, in the form of LNG. Details of BMI's 10- year forecasts can be found in the appendix to this report, which provides global, regional and country-specific projections. Egypt now occupies seventh place in BMI's updated Upstream Business Environment rating, just two points behind Algeria. The county's score benefits from healthy proven gas reserves, an established competitive landscape, a reasonable gas reserves-to-
production ratio (RPR) and attractive licensing terms. The country's risk environment is sound, but this alone may not be enough to push Egypt past Algeria during the next couple of quarters. However, South Africa is a comfortable distance behind and lacks the upstream credentials to challenge for Egypt's seventh place. The country is in the upper half of the league table in BMI's Downstream Business Environment rating, with some high scores but progress further up the rankings unlikely. It is ranked second, thanks to high scores for refining capacity, oil and gas demand, retail site intensity, population and GDP per capita growth. The growth outlook for oil/gas consumption and refining capacity represent relatively weak suits. Algeria is immediately behind it in the regional rankings, and there is some risk of it challenging for Egypt's second place.
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