"Turkmenistan Oil & Gas Report Q2 2011" is now available at Fast Market Research

May 5, 2011 - PRLog -- The latest Turkmenistan Oil & Gas Report from BMI forecasts that the country will account for 2.28% of Central and Eastern European (CEE) regional oil demand by 2015, while providing 2.49% of supply. CEE regional oil use of 5.42mn barrels per day (b/d) in 2001 rose to an estimated 6.09mn b/d in 2010. It should increase to around 6.93mn b/d by 2015. Regional oil production was 8.89mn b/d in 2001 and in 2010 averaged an estimated 13.78mn b/d. It is set to rise to 15.08mn 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 of 3.47mn b/d. This total rose to an estimated 7.69mn b/d in 2010 and is forecast to reach 8.15mn b/d by 2015. Azerbaijan and Kazakhstan have the greatest production growth potential, although Russia will remain the most important exporter.

In terms of natural gas, the region in 2010 consumed an estimated 636.3bn cubic metres (bcm), with demand of 736.3bcm targeted for 2015, representing 15.7% growth. Production of an estimated 787.9bcm in 2010 should reach 954.2bcm in 2015, which implies net exports rising from an estimated 151.6bcm in 2010 to 217.9bcm by the end of the period. Turkmenistan's share of consumption in 2010 was an estimated 3.35%, while its share of production is put at 8.25%. By 2015, its share of demand is forecast to be 4.15%, with the country accounting for 9.43% of supply.

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.

BMI estimates that Turkmen real GDP rose by 9.2% in 2010, followed by average annual growth of 10.4% from 2011 to 2015. Domestic consumption trends can be expected to return to a strong growth tack from 2010 onwards, estimated at an average of 5.0% per annum. By 2015, the country could be using 158,000b/d of oil. Turkmenistan has traditionally been protective of its onshore basins, allowing international oil companies (IOCs) to participate only in offshore developments. Offshore activity should help raise national crude and gas liquids output from an estimated 220,000b/d in 2010 to 375,000b/d by 2015. Gas production is expected to increase from an estimated 65bcm to 90bcm between 2010 and 2015.

Between 2010 and 2020, we are forecasting an increase in Turkmen oil and gas liquids production of 54.1%, with volumes peaking at 375,000b/d in 2015, before falling to 339,000b/d at the end of the 10- year forecast period. Oil consumption is set to increase by 62.9% between 2010 and 2020, with growth slowing to an assumed 5.0% per annum towards the end of the period and the country using 201,000b/d by 2020. Gas production should rise from the estimated 2010 level of 65bcm to 140bcm by 2020, providing export potential increasing from an estimated 44bcm to 96bcm. Details of BMI's 10-year forecasts can be found in the appendix to this report.

Turkmenistan shares 11th place with Uzbekistan in BMI's composite Business Environment (BE) ratings table, which combines upstream and downstream scores. It shares eighth place with Croatia and Uzbekistan in BMI's updated upstream ratings. Its oil and gas production growth outlook, gas reserves, and asset immaturity work in the country's favour, but are undermined by an unappealing risk environment. Scope exists for Turkmenistan to break away from its immediate rivals and to move further up the table. Turkmenistan is in the lower half of the league table in BMI's downstream ratings, with few particularly high scores and progress further up the rankings unlikely over the next few quarters. Oil and gas demand growth prospects represent strong suits, putting the country in joint 10th place, alongside Slovenia.

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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.