Iran Oil & Gas Report Q1 2011: New research report available at Fast Market Research

Jan. 31, 2011 - PRLog -- BMI forecasts that Iran will account for 23.16% of Middle Eastern (ME) regional oil demand by 2015 and provide16.34% of supply. Middle East regional oil use of 4.98mn barrels per day (b/d) in 2001 is forecast to rise to an estimated 7.40mn b/d in 2010. It should average 7.70mn b/d in 2011 and then rise to around 8.70mn b/d by 2015. Regional oil production was 22.83mn b/d in 2001 and is expected to average 24.96mn b/d in 2010. After an estimated 25.22mn b/d in 2011, it is set to rise to 27.24mn b/d by 2015. Oil exports are growing steadily, because demand growth is lagging the pace of supply expansion. In 2001, the region was exporting an average 17.85mn b/d. This total will ease to an estimated 17.55mn b/d in 2010 and is forecast to reach 18.54mn b/d by 2015. Iraq has the greatest export growth potential, followed by Qatar.

In terms of natural gas, BMI expects the region to consume an estimated 391bn cubic metres (bcm) in 2010, with demand of 483bcm targeted for 2015, representing 23.7% growth. Production of an estimated 467bcm in 2010 should reach 614bcm in 2015 (+31.4%), which implies net exports rising to 130bcm by the end of the period. Iran is forecast to consume 34.04% of the region's gas in 2010, with its market share falling to 30.13% by 2015. It should contribute an estimated 29.98% to 2010 regional gas production and, by 2015, will account for 30.14% of supply.

For 2010 as a whole, we assume an average OPEC basket price of US$77.00/bbl (+26.5% year-on-year (y-o-y). The 2010 US WTI price is now put at US$79.16/bbl. BMI is assuming an OPEC basket price of US$80.00/bbl in 2011, with WTI averaging US$82.25, Brent at US$82.46/bbl, Urals delivering around US$81.21 and the Dubai average being US$80.74/bbl. Our central assumption for 2012 is an OPEC price averaging US$85.00/bbl, delivering WTI at approximately US$87.40 and Brent at US$87.60/bbl. From 2013 onwards, we are using an average OPEC price of US$90.00/bbl.

For the whole of 2010, the BMI assumption for the global gasoline price is an average US$87.49/bbl, representing a y-o-y rise of 24.7%. The global gasoil forecast is for an average price of US$88.00/bbl, probably peaking in December 2010 at more than US$95/bbl. The full-year outturn represents a 27.6% increase from the 2009 level. For 2010, the annual jet price level is forecast to be US$89.50/bbl. This compares with US$70.66/bbl in 2009. The 2010 average naphtha price is put by BMI at US$77.65/bbl, up almost 31% from the previous year's level.

BMI forecasts Iran's real GDP growing 1.5% in 2010, and we are assuming average annual growth of 2.0% in 2010-2015. We expect oil demand to rise from an estimated 1.74mn b/d in 2010 to 2.02mn b/d in 2015, matching the underlying rate of economic expansion. The state-owned National Iranian Oil Company (NIOC) is responsible for all upstream oil and gas activities, although there is some smallscale participation by international oil companies (IOCs) on a subcontractor basis. The lack of large-scale IOC investment contributes to modest output growth, with crude production forecast to increase from an estimated 4.19mn b/d in 2010 to 4.45mn b/d in 2015, subject to OPEC quotas and the possible impact of sanctions resulting from the nuclear energy standoff. Gas production should reach 185bcm by 2015, up from an estimated 140bcm in 2010. Consumption is expected to rise from 133bcm to 146bcm by the end of the forecast period, providing export potential of 39bcm.

Between 2010 and 2020, we are forecasting an increase in Iranian oil production of 12.2%, with crude volumes rising towards 4.70mn b/d by the end of the 10-year forecast period, although there will have been an OPEC-induced dip in 2009/10. Oil consumption between 2010 and 2020 is set to increase by 30.4%, with growth slowing to an assumed 2.0% per annum towards the end of the period and the country using 2.27mn b/d by 2020. Gas production is expected to climb to 265bcm by the end of the period. With 2010-2020 demand growth of 17.3%, this provides export potential rising to 109bcm by 2020. Details of BMI's 10-year forecasts can be found in the appendix to this report.

Iran ranks equal fifth, alongside Bahrain, in BMI's composite Business Environment Ratings (BERs) table, which combines upstream and downstream scores. It holds sixth place in BMI's updated upstream ratings. Iran is five points behind Bahrain, in spite of a score benefiting from the region's biggest gas reserves base and a very healthy oil reserves position. Reserves-to-production ratios (RPRs) are high, but strict government control of the upstream industry prevents Iran's achieving a better overall score. Iran is now ranked joint second, behind Israel and alongside Saudi Arabia, in BMI's updated downstream ratings, with some high scores but progress further up the rankings unlikely. It is rated above the UAE thanks to high scores for refining capacity, oil demand, gas consumption, retail site intensity and population. The growth outlooks for oil/gas consumption and refining capacity represent relatively weak suits. The UAE is just two points behind it in the regional rankings and there is some long-term risk of it challenging for Iran's second place.

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.