Angola Oil & Gas Report Q2 2011: New research report available at Fast Market Research

April 20, 2011 - PRLog -- The latest Angola Oil & Gas Report from BMI forecasts that the country will account for 4.9% of African regional oil demand by 2015, while providing 18.87% of supply. African regional oil use of 3.06mn barrels per day (b/d) in 2001 rose to an estimated 3.88mn b/d in 2010. It should average 3.96mn b/d in 2011 and then rise to around 4.48mn b/d by 2015. Regional oil production was 7.93mn b/d in 2001, and in 2010 averaged an estimated 9.98mn b/d. From a forecast 10.37mn b/d in 2011, it is set to rise to 11.92mn b/d by 2015. Oil exports are growing steadily, because demand growth is lagging behind the pace of supply expansion. In 2001, the region was exporting an average 4.87mn b/d. This total had risen to an estimated 6.10mn b/d in 2010 and is forecast to reach 7.44mn b/d by 2015. Angola has the greatest production growth potential, with Nigerian exports set to climb if it can resolve recent quasi-political issues.

In terms of natural gas, the region in 2010 consumed an estimated 123.7bn cubic metres (bcm), with demand of 176.2bcm forecast for 2015. Production of an estimated 217.7bcm in 2010 should reach 321.2bcm in 2015, which implies net exports rising from an estimated 94bcm to 145bcm in 2015. In 2010 Angola consumed an estimated 4.04% of the region's gas, while producing around 2.30%. By 2015, we expect its share of consumption to be 6.04%, with a 5.48% contribution to regional gas production.

The 2010 full-year outturn was US$77.45/bbl for OPEC crude, which delivered an average for North Sea Brent of US$80.34/bbl and for West Texas Intermediate (WTI) of US$79.61/bbl. The BMI price target of US$77 was reached thanks to the early onset of particularly cold weather, which drove up demand for and the price of heating oil during the closing weeks of the year.

We set our 2011 supply, demand and price forecasts in early January, targeting global oil demand growth of 1.53% and supply growth of 1.91%. With OECD inventories at the top of their five-year average range, we set a price forecast of US$80/bbl average for the OPEC basket in 2011. The unprecedented wave of popular uprisings in the Middle East and North Africa (MENA) that followed the removal of Tunisian President Ben Ali on January 14 has obviously fundamentally altered our outlook, particularly since the unrest spread to Libya in mid-February.

Taking into account the risk premium that has been added to crude prices in response to actual and perceived threats to supply, we have now raised our benchmark OPEC basket price forecast from US$80 to US$90/bbl for 2011 and from US$85 to US$95/bbl for 2012. Based on our expectations for differentials, this gives a forecast for Brent at US$94/bbl in 2011 and US$99/bbl in 2012. We have kept our long-term price assumption of US$90/bbl (OPEC basket) in place for the time being while we wait to see what path events in the MENA region take. We have also retained our existing supply and demand forecasts until the scheduled quarterly revision at the start of April.

We assume that Angola's real GDP rose by 7.0% in 2010, with average annual growth of 8.9% expected in 2010-2015. Healthy economic growth is exceeded by spectacular oil demand growth, albeit from a low base. Consumption is set to rise from an estimated 94,000b/d in 2010 to 215,000b/d by 2015. State oil company Sonangol operates in partnership with various international oil companies (IOCs) and now accounts for less than 40% of the country's oil output. Thanks largely to IOC investment, oil output is forecast to increase from an estimated 1.79mn b/d in 2010 to 2.25mn b/d in 2015, with exports heading towards 2.04mn b/d. Angola's OPEC membership is posing some problems in terms of production quotas. Gas production of an estimated 5.0bcm in 2010 is projected to reach 17.6bcm by 2015. Consumption is expected to rise to 10.6bcm by the end of the forecast period, providing export potential of around 7bcm.

Between 2010 and 2020 we forecast an increase in Angolan oil and gas liquids production of 17.3%, with volumes peaking at 2.40mn b/d in 2017, before slipping steadily to 2.10mn b/d by the end of the 10-year forecast period. Oil consumption between 2010 and 2020 is set to increase by 342.8%, with growth slowing to an assumed 15.0% a year towards the end of the period and the country using 416,000b/d by 2020. Gas production is expected to rise to 36.4bcm by the end of the period. With demand rising 328.3% between 2010 and 2020, export potential should increase to 15.0bcm, in the form of LNG. Details of BMI's 10-year forecasts can be found in the appendix to this report.

Angola now shares sixth place with Gabon and Ghana in BMI's composite oil and gas sector Business Environment (BE) ratings, which combines scores for the upstream and downstream segments. In the updated upstream BE ratings the country ranks seventh, behind Algeria. The country's score benefits from an excellent oil and gas output growth outlook, respectable proven reserves, a large number of nonstate companies active in the upstream sector and decent licensing terms. Country risk factors continue to plague the country and lower its score. Any improvement here means a rapid rise up the rankings. Angola is in the middle of the league table in BMI's updated downstream Business Environment ratings with a few high scores, but progress further up the ratings is unlikely over the near term. It has sixth place ahead of Sudan, in spite of low scores for refining capacity, oil and gas consumption, and private company competition in the downstream segment.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/149580_angola_oil_gas_report_q...

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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.