Recently released market study: Brazil Oil & Gas Report Q3 2011

Fast Market Research recommends "Brazil Oil & Gas Report Q3 2011" from Business Monitor International, now available
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July 26, 2011 - PRLog -- This latest Brazil Oil & Gas Report from BMI forecasts that the country will account for 33.85% of Latin American regional oil demand by 2015, providing 29.29% of supply. Latin American regional use averaged an estimated 8.41mn barrels per day (b/d) in 2010. It should rise to 8.63mn b/d in 2011 and reach 9.30mn b/d by 2015. Regional oil production in 2010 averaged an estimated 9.92mn b/d. It is set to rise to 12.47mn b/d by 2015. Oil exports have been slipping, because demand growth has exceeded the pace of supply expansion. In 2001, the region was exporting an average of 3.24mn b/d. This total fell to an estimated 1.52mn b/d in 2010 and is forecast to rebound to 3.05mn b/d in 2015. The principal exporters will be Mexico, Venezuela, Colombia and Brazil.

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In terms of natural gas, the region in 2010 consumed an estimated 189.5bn cubic metres (bcm), with demand of 230.8bcm targeted for 2015. Production of an estimated 203bcm in 2010 should reach 254bcm in 2015, and implies more than 20bcm of net exports at the end of the period. Brazil's share of gas consumption in 2010 was an estimated 10.92%, while its share of production is put at 6.21%. By 2015, its share of gas consumption is forecast to be 12.13%, with the country accounting for 8.90% 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.

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 and Brent price forecasts. We expect Brent crude to average US$106/bbl in 2011, with OPEC basket averaging US$101.90/bbl. Mid-year increases in supply present downside risks to this forecast. In 2012, we expect OPEC basket to average US$95/bbl, with Brent averaging US$97.6/bbl.

Global GDP growth of 3.6% is forecast for 2011, down from 4.3% in 2010. Growth in both the US and eurozone should be marginally higher than in 2010, while Chinese economic expansion will slow and Japan's growth will slump to 0.7% as a result of the devastating earthquake and tsunami in March 2011. Our oil price forecast for 2011 is US$98.90/bbl for the OPEC Basket, giving Brent at US$103/bbl and West Texas Intermediate (WTI) at US$92.30, although these differentials are subject to change.

Brazilian real GDP rose by an estimated 7.5% in 2010, with average annual growth of 5.4% forecast in 2010-2015. Partly privatised deepwater specialist Petroleo Brasileiro (Petrobras) will continue to team up with international oil companies (IOCs) qcpkw to support output growth efforts and will dominate domestic production. We are assuming oil and gas liquids production of 3.65mn b/d by 2015, with the country expected to pump 2.34mn b/d in 2011. Beyond the weakness of 2009, oil consumption is forecast to increase by around 3.0% per annum to 2015, implying demand of 3.00mn b/d by the end of the forecast period. The net export capability would therefore be 1.2mn b/d by 2015, including biofuels. Gas production is forecast to increase from an estimated 14bcm in 2010 to 24bcm over the period to 2015, with consumption climbing from an estimated 22bcm to 38bcm.

Between 2010 and 2020, we forecast an increase in Brazilian oil production of 111.5%, with crude volumes rising steadily to an estimated 4.53mn b/d by the end of the 10-year forecast period. Oil consumption between 2010 and 2020 is set to increase by 31.0%, with growth slowing to an assumed 2.5% per annum towards the end of the period and the country using 3.35mn b/d by 2020. Net export potential rises to 1.98mn b/d during the period, including biofuels. Gas production is expected to rise gradually, from an estimated 14bcm in 2010 to 38bcm by 2020. With demand growth of 132.6%, this provides a net import requirement falling from a forecast peak of 14.5bcm in 2016 to 12.0bcm by 2020. Details of BMI's 10-year forecasts can be found in the appendix to this report.

Brazil holds first place in BMI's composite Business Environment Ratings (BERs), which combine upstream and downstream scores. The country has also retained its share of first place with Peru in BMI's updated upstream ratings. Brazil's score benefits from the size of the oil resource base, output growth prospects, attractive licensing regime and competitive environment. Although some weak points exist in the country's risk ratings, its position at the head of the regional league table continues to look unassailable and it would be no surprise to see it pull clear of Peru. Brazil also holds the top slot of BMI's downstream ratings, four points clear of Colombia. This reflects its region-beating oil demand, substantial refining capacity and competitive environment. We see no obvious threat of Colombia catching Brazil over the medium term. About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at

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Tags:bd, Oil, Gas, Supply, Ratings, Opec, Basket, Crude, 14bcm, North
Industry:Energy, Industrial, Research
Location:Massachusetts - United States
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