The latest Qatar Oil & Gas Report from BMI forecasts that the country will account for just 1.10% of Middle Eastern (ME) regional oil demand by 2014, while providing 6.70% of supply. Regional oil use of 7.47mn barrels per day (b/d) in 2001 rose to an estimated 10.64mn b/d in 2009. It should average 10.98mn b/d in 2010 and then rise to around 11.95mn b/d by 2014. Regional oil production was 22.83mn b/d in 2001, and averaged an estimated 24.66mn b/d in 2009. It is set to rise to 27.18mn 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 15.36mn b/d. This total had eased to an estimated 14.02mn b/d in 2009 and is forecast to reach 15.23mn b/d by 2014. Iraq has the greatest production growth potential, followed by Qatar.
In terms of natural gas, the region consumed an estimated 367.6bn cubic metres (bcm) in 2009, with demand of 492.5bcm targeted for 2014, representing 28.7% growth. Estimated production of 429.9bcm in 2009 should reach 657.8bcm in 2014 (+39.8%), which implies net exports rising to 165.0bcm by the end of the period. Qatar in 2009 consumed an estimated 5.82% of the region's gas, with its market share forecast at 7.12% by 2014. It contributed an estimated 24.89% to 2009 regional gas production and, by 2014, will account for 23.81% of supply.
We are sticking with our forecast that the OPEC basket of crudes will average US$83.00/bbl in 2010. Wide variations in crude differentials so far in 2010 make forecasting tricky for Brent, West Texas Intermediate (WTI) and Urals, but we believe the three benchmarks will average around US$85.11, US$88.22 and US$83.62/bbl respectively, with Dubai coming in at US$83.14. By 2011, there should be further growth in oil consumption and more room for OPEC to regain market share and reduce surplus capacity through higher production quotas. We are assuming a further increase in the OPEC basket price to an average US$85.00/bbl. For 2012 and beyond, we continue to use a central case forecast of US$90.00/bbl for the OPEC basket.
For 2010, the BMI assumption for premium unleaded gasoline is an average global price of US$96.83/bbl. The year-on-year (y-o-y) rise in 2010 gasoline prices is put at 38%. Gasoil in 2010 is expected to average US$92.45/bbl, with the full-year outturn representing a 37% increase from the 2009 level. For jet fuel in 2010, the annual level is forecast to be US$95.58/bbl, compared with US$70.66/bbl in 2009. BMI forecasts the average naphtha price for 2010 at US$82.46/bbl, up 39% from the previous year's level.
Qatar's real GDP is assumed by BMI to have risen by 7.8% in 2009, followed by forecast 15.3% growth in 2010. We are assuming average annual growth of 8.3% in 2010-2014. We expect oil demand to rise from an estimated 100,000b/d in 2009 to 131,000b/d in 2014. State-owned Qatar Petroleum (QP) negotiates exploration and production (E&P) agreements, shares in upstream projects, and has 50% of oil and 40% of gas production. It has signed agreements with many of the leading international oil companies (IOCs), particularly for gas development and export projects. Our estimates assume 1.38mn b/d of 2009 oil and liquids production, rising to 1.82mn b/d by the end of the forecast period. Gas production should reach 157bcm by 2014, up from an estimated 107bcm in 2009. Consumption is expected to rise from an estimated 21bcm to 35bcm by the end of the forecast period, allowing for exports of 122bcm.
Between 2010 and 2019, we are forecasting an increase in Qatari oil and gas liquids production of 39.1%, with volumes rising steadily to 2.16mn b/d by the end of the 10-year forecast period. Oil consumption between 2010 and 2019 is set to increase by 69.0%, with growth slowing to an assumed 6.0% per annum towards the end of the period and the country using 176,000b/d by 2019. Gas production is expected to rise from an estimated 107bcm to 180bcm by the end of the period. With 2010-2019 demand growth of 127.2%, this provides an export capability rising from an estimated 86bcm to 127bcm by 2019. Details of BMI's 10-year forecasts can be found in the appendix to this report.
Qatar holds second place, just behind the United Arab Emirates (UAE) in BMI's composite Business Environment (BE) ratings table, which combines Upstream and Downstream scores. However, the country holds outright first place, two points head of the UAE, in BMI's updated Upstream Business Environment rating. We see little risk over the short term of Qatar having its position challenged, thanks largely to the country's extraordinary gas wealth. The country's score benefits from a sound country risk profile, healthy output growth prospects, high reserves-to-
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