BMI forecasts that South Africa will account for 14.03% of African regional oil demand by 2014, with negligible domestic crude production but a growing synthetic oil capability. African regional oil use of 2.98mn barrels per day (b/d) in 2001 rose to an estimated 3.60mn b/d in 2009. It should average 3.66mn b/d in 2010 and then rise to around 4.13mn b/d by 2014. Regional oil production was 7.84mn b/d in 2001 and in 2009 averaged an estimated 9.79mn b/d. It is set to rise to 12.52mn b/d by 2014. 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 6.19mn b/d in 2009 and is forecast to reach 8.40mn b/d by 2014. Angola has the greatest production growth potential, with Nigerian exports set to soar if it can re solve recent quasi-political issues. In terms of natural gas, the region in 2009 consumed an estimated 124bcm, with demand of 191bcm targeted for 2014. Production of an estimated 248bcm in 2009 should reach 385bcm in 2014, which implies net exports rising from 124bcm in 2009 to 193bcm by the end of the period. In 2009, South Africa's estimated share of regional gas supply was 1.82%, remaining around this level in 2014. The country's share of demand in 2009 was an estimated 4.05%, with 5.43% predicted by 2014. For 2009 as a whole, we have assumed an average OPEC basket price of US$59.00 per barrel (bbl), a 37.3% decline year-on-year (y-o-y). This represents an upgrade from the US$55.00/bbl forecast we were using in the previous quarter. For 2010, we expect to see a significant oil price recovery to US$83.00/bbl for the OPEC basket price, gaining further ground to US$85.00/bbl in 2011 and to US$90.00/bbl in 2012 and beyond. For 2009, BMI has assumed a global average gasoline price of US$67.46/bbl, with the fuel having peaked in June at almost US$80.00/bbl. The overall y-o-y fall in 2009 gasoline prices is put at 33.7%. The BMI gasoil forecast is for an average price of US$70.59/bbl, assuming a monthly high above US$94/bbl in December 2009. The full-year outturn represents a 41.8% y-o-y fall. The annual jet price level for 2009 is estimated at US$68.45/bbl. This compares with US$124.95/bbl in 2008. The 2009 average naphtha price is put by BMI at US$52.66/bbl, down 39.7% from the previous year's level. South African real GDP is estimated by BMI to have fallen by 1.8% in 2009, compared with 3.1% growth in 2008. We are assuming average annual grow th of 3.2% in 2010-2014. We expect oil demand to rise from an estimated 540,000b/d in 2009 to 579,000b/d in 2014, representing less than 1.5% annual growth that lags our underlying economic assumptions . There is very little domestic crude production, although national companies contribute some 200, 000b/d of synthetic oil output. International oil companies (IOCs) are restricted largely to roles in oil refining and fuels di stribution. Gas production could reach 7.0bcm by 2012/2013, up from an estimated 4.5bcm in 2009. Consumption is expected to rise from 5.0bcm to 10.4bcm by the end of the forecast period, requiring imports of 3.4bcm. Between 2009 and 2019, we are forecasting an increase in South African oil and gas liquids consumption of 15.5%, with demand rising steadily to 624,000b/d by the end of the 10-year forecast period. Synthetic oil production is set to rise from 205,000b/d to 350,000b/d, with crude imports peaking at 309,000b/d in 2011. Gas consumption is expected to rise to 11.5bcm by the end of the period, requiring imports up from an estimated 0.5bcm in 2009 to 6.5bcm by 2019. Details of BMI 's 10-year forecasts can be found in the appendix to this report. South Africa is still ranked eighth in BMI 's updated Upstream Business Environment rating, reflecting its virtually non-existent oil and gas resource base. It stands seven points clear of Equatorial Guinea and Sudan, so should be safe over the medium term. South Africa's score reflects the low level of state asset ownership and the advanced stage of privatisation, plus an established licensing framework and largely encouraging country risk factors. The absence of hydr ocarbon resources offsets th ese positive factors. The country is well up the league table in BMI 's Downstream Business Environment rating, with several high scores. It is ranked first, ahead of Egypt, thanks largely to high scores for oil demand, gas consumption growth, non-state competition, deregulation, and nominal GDP. Egypt is four points below and represents no immediate threat to South Africa's ranking.
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