New Market Study Published: Equatorial Guinea Oil & Gas Report Q3 2011

Recently published research from Business Monitor International, "Equatorial Guinea Oil & Gas Report Q3 2011", is now available at Fast Market Research
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July 27, 2011 - PRLog -- The latest Equatorial Guinea Oil & Gas Report from BMI forecasts that the country will account for 0.07% of African regional oil demand by 2015, while providing 3.46% of supply. African regional oil use of 3.06mn barrels per day (b/d) in 2001 rose to an estimated 3.63mn b/d in 2010. It should average 3.62mn b/d in 2011 and then rise to around 4.09mn b/d by 2015. Regional oil production was 8.08mn b/d in 2001, and in 2010 averaged an estimated 10.74mn b/d. After dropping to an estimated 9.66mn b/d in 2011 because of the loss of Libyan volumes, it is set to rise to 12.91mn 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 of 6.02mn b/d. This total rose to an estimated 8.15mn b/d in 2010 and is forecast to reach 9.85mn b/d by 2015. Nigeria has the greatest production growth potential, with Angolan exports also set to climb significantly.

Full Report Details at

In terms of natural gas, the region in 2010 consumed an estimated 120.6bn cubic metres (bcm), with demand of 162.3bcm forecast for 2015. Production of an estimated 208.7bcm in 2010 should reach 295.2bcm in 2015, which implies net exports rising from an estimated 105bcm to 151bcm in 2015. In 2010, Equatorial Guinea consumed an estimated 1.35% of the region's gas, with its market share forecast at 1.28% by 2015. It contributed an estimated 3.07% to 2010 regional gas production and by 2015 will account for 2.30% 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$101.90/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$106/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.

Equatorial Guinea's real GDP rose by an estimated 3.2% in 2010. We are assuming average annual growth of 4.3% in 2010-2015. We expect oil demand to rise from an estimated 2,100b/d in 2010 to 2,680b/d in 2015. State oil company GEPetrol's primary focus is to manage the interest stakes of the government in various production sharing contracts (PSCs) and joint ventures (JVs) with international oil companies (IOCs). Thanks to IOC investment, oil output is forecast to increase from an estimated 323,000b/d in 2010 (EIA) to 447,000b/d in 2015. Gas production should be around 6.8bcm by 2015. Consumption is expected to rise from 1.6bcm to 2.1bcm by the end of the forecast period, providing exports of 4.7bcm - in the form of LNG.

Between 2010 and 2020, we are forecasting an increase in Equatorial Guinea oil and gas liquids production of 30.1%, with volumes peaking at 455,000b/d in 2016, before falling steadily to 420,000b/d by the end of the 10-year forecast period. Oil consumption between 2010 and 2020 is set to increase by 62.9%, with growth estimated at 5% per annum and the country using 3,421b/d by 2020. Gas production is expected to rise to 7.5bcm by the end of the period. With demand rising by 68.8% between 2010 and 2020, there is scope for exports of around 4.9bcm. Details of BMI's 10-year forecasts can be found in the appendix to this report.

Equatorial Guinea holds 10th place, ahead only of Cameroon and Sudan, in BMI's composite Business Environment (BE) ratings table, which combines upstream and downstream scores. It also holds 10th place, above only Cameroon and Sudan, in BMI's updated upstream Business Environment ratings and is in a reasonable position to move higher over the medium term. The country's score benefits from moderate oil and gas output growth prospects and attractive licensing terms. The country's risk environment is somewhat shaky, but this is hardly uncommon in the African region. Equatorial Guinea is near the bottom of the league table in BMI's updated downstream Business Environment ratings, with no high scores and progress further up the rankings unlikely unless the energy market grows rapidly or refineries are built. It is ranked 11th ahead only of Republic of Congo, thanks to low scores for refining capacity, oil and gas demand, likely refining capacity expansion, nominal GDP and population. 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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