CEE regional oil use of 4.65mn barrels per day (b/d) in 2001 rose to an estimated 5.18mn b/d in 2009. It should average 5.25mn b/d in 2010 and then rise to around 5.81mn b/d by 2014. Regional oil production was 8.83mn b/d in 2001, and in 2009 averaged an estimated 13.18mn b/d. It is set to rise to 14.53mn 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 4.18mn b/d. This total had risen to an estimated 8.01mn b/d in 2009 and is forecast to reach 8.72mn b/d by 2014. In terms of natural gas, the region in 2009 consumed an estimated 589.2bn cubic metres (bcm), with demand of 677.2bcm targeted for 2014, representing 14.9% growth. Production of an estimated 767.2bcm in 2009 should reach 934.2bcm in 2014, which implies net exports rising from 177.9bcm in 2009 to 257.1bcm by the end of the period. Russia's share of gas consumption in 2009 was an estimated 70.43%, while its share of production is put at 76.96%. By 2014, its share of demand is forecast to be 67.33%, with the country accounting for 73.32% of supply. 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. Russian real GDP is estimated by BMI to have fallen by 8.1% in 2009, compared with 5.6% growth in 2008. We are assuming average annual growth of 2.2% in 2010-2014. State-controlled Gazprom has a virtual monopoly over gas transportation and exports. With it being the main provider, we see gas output rising from an estimated 590bcm in 2009 to 685bcm by 2014. Russian domestic companies control most of Russia's oil production, with the exception being Anglo-Russian joint venture (JV) TNK-BP . Rosneft is the main state-controlled oil producer. The companies are thought to have delivered 2009 output of crude oil and condensates averaging 10.01mn b/d. Oil production seems likely to stagnate over the short10.05mn b/d. Between 2009 and 2019, we are forecasting an increase in Russian oil production of 8.8%, with output rising slowly from an estimated 10.01mn b/d in 2009 to 10.89mn b/d by 2019. Oil consumption during the period is forecast to rise by 26.8%, permitti ng exports peaking at 7.89mn b/d in 2016. Gas consumption is expected to be up from 415bcm to 503bcm by 2019, providing export potential peaking at 262bcm in 2018. Details of BMI's 10-year forecasts can be found in the appendix to this report. Russia now occupies fifth place in BMI 's updated Upstream Business Environment rating, aided by unrivalled hydrocarbons resources. Its oil and gas reserves account for much of the upstream score, but licensing, privatisation and country risk factors are less impressive. Medium-term scope exists for Russia to challenge Bulgaria and Poland above it, while Romania poses no threat below. The country is near the top of the league table in BMI 's updated Downstream Business Environment rating, having kept ahead of Romania but slipped behind Ukraine to take third place. There are a few particularly high scores, but a move to challenge Ukraine is possible over the medium term. There are excellent scores for refining capacity, oil and gas demand, population and nominal GDP.
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