The latest Ecuador Oil & Gas Report from BMI forecasts that the country will account for 2.44% of Latin America regional oil demand by 2013, while providing 4.73% of supply. Latin America regional oil use of 6.66mn barrels per day (b/d) in 2001 reached an estimated 7.72mn b/d in 2008. It should average 7.86mn b/d in 2009 and then rise to around 8.58mn b/d by 2013. Regional oil production was just under 10.40mn b/d in 2001, and in 2008 averaged an estimated 9.99mn b/d. It is set to rise to 10.78mn b/d by 2013. Oil exports are slipping, because demand growth is exceeding the pace of supply expansion. In 2001, the region was exporting an average 3.73mn b/d. This total had fallen to an estimated 2.27mn b/d in 2008 and is forecast to be 2.21mn b/d in 2013. In terms of natural gas, the Latin America region in 2008 consumed an estimated 194bn cubic metres (bcm), with demand of 266bcm targeted for 2013, representing 45% growth. Estimated production of 208bcm in 2008 should reach 294bcm in 2013, and implies 28bcm of net exports the end of the period. Ecuador's share of regional gas production and consumption will remain insignificant. In terms of the OPEC basket of crudes, the average price in Q4 2008 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. Ecuador's real GDP is forecast by BMI to contract by 1.7% in 2009, compared with estimated growth of 5.4% in 2008. We are assuming a 5.4% decline in 2010, followed by growth of 3.2% in 2011, 3.7% in 2012 and 4.2% in 2013. State-owned Petroecuador co-operates with several international oil companies (IOCs) and they have between them delivered a greater volume of crude over the past couple of years. We are assuming oil and gas liquids production of no more than 510,000b/d by 2013, with the country expected to pump 495,000b/d in 2009. Consumption is forecast to increase by around 3% per annum to 2013, implying demand of 209,000b/d by the end of the forecast period. The export capability would therefore be approximately 301,000b/d by 2013. Between 2007 and 2018, we are forecasting a decrease in Ecuador's oil production of 13.5%, with crude volumes falling steadily from 520,000b/d in 2007 to 450,000b/d by the end of the 10-year forecast period. Oil consumption between 2007 and 2018 is set to increase by 34.1%, with growth slowing to an assumed 3.0% per annum towards the end of the period and the country using 243,000 b/d by 2018. Gas production and consumption will grow only slowly from a very low base over the period. Details of BMI's 10-year forecasts can be found in the appendix to this report, which provides global, regional and country-specific projections. Ecuador still ranks seventh in BMI's updated Upstream Business Environment rating, just behind Argentina, and with a comfortable lead over Bolivia. Scores are mid-table or higher for proven oil reserves, oil and gas output growth and reserves-to-
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