New market study, "Kuwait Oil & Gas Report Q3 2011", has been published

New Energy research report from Business Monitor International is now available from Fast Market Research
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Aug. 28, 2011 - PRLog -- BMI forecasts that Kuwait will account for 5.3% of Middle East regional oil demand by 2015, providing 9.1% of supply. Middle East regional oil use rose to an estimated 7.6mn b/d in 2010 and should average 7.9mn barrels per day (b/d) in 2011, before climbing to around 8.9mn b/d by 2015. Regional oil production was 22.83mn b/d in 2001 and averaged an estimated 24.5mn b/d in 2010. After reaching an estimated 25.7mn b/d in 2011, it is set to rise to 30.5mn 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 17.85mn b/d. This total eased to an estimated 16.88mn b/d in 2010 and is forecast to reach 21.54mn b/d by 2015. Iraq has the greatest export growth potential, followed by Qatar.

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In terms of natural gas, the region consumed an estimated 391bn cubic metres (bcm) in 2010, with demand of 487bcm targeted for 2015, representing 25% growth. Production of an estimated 455bcm in 2010 should reach 642bcm in 2015 (+41%), which implies net exports rising to 154bcm by the end of the period. Kuwait's estimated share of gas consumption in 2010 was 3.6%, while its share of production was 2.9%. By 2015, its share of gas consumption is forecast to be 4.0%, with the country accounting for 2.4% 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 for 2011from US$80 to US$101.90/bbl and from US$85 to US$95/bbl for 2012. Based on our expectations for differentials, this gives a forecast for Brent at US$106.00/bbl in 2011 and US$97.60/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 calculates that Kuwait's real GDP rose by 2.0% in 2010, with average annual growth of 3.6% expected through to 2015. We expect oil demand to rise from an estimated 423,000b/d in 2010 to 475,000b/d in 2015, lagging the underlying rate of economic expansion. State oil company Kuwait Petroleum Corporation (KPC) is responsible for all domestic oil and gas operations. Despite the absence of near-term international oil company (IOC) investment, crude production is forecast to increase from an estimated 2.49mn b/d in 2010 to 2.79mn b/d in 2015, subject to OPEC quotas. Gas production should reach 15.3bcm by 2015, up from an estimated 13.2bcm in 2010. Consumption is expected to rise from an estimated 13.9bcm in 2010 to 19.3bcm by the end of the forecast period, requiring modest net imports.

Between 2010 and 2020, we forecast an increase in Kuwaiti oil production of 38.3%, with crude volumes rising steadily to 3.45mn b/d by the end of the 10-year forecast period. Oil consumption between 2010 and 2020 is set to increase by 25.3%, with growth slowing to an average 3.0% per annum towards the end of the period and the country using 530,000b/d by 2020. Gas production is expected to climb to 19.6bcm by the end of the period. With 2010-2020 demand growth of 77.5%, this provides an import requirement rising to 5.1bcm by 2020.

Kuwait takes last place in BMI's composite Business Environment Ratings (BERs) table, which combines upstream and downstream scores. The Gulf state holds eighth place, above only Saudi Arabia, in BMI's updated upstream ratings, which is a surprising outcome in view of its vast oil and gas wealth. It is three points behind Oman and may ultimately be able to mount a challenge. Kuwait's score suffers from strict government control of the upstream industry, undermining the healthy resource position. Kuwait is in the lower half of the league table in BMI's downstream ratings, with a few high scores and near-term progress up the rankings a possibility. It is now ranked eighth ahead only of Iraq, thanks to country risk factors that fail to counter the highly regulated and largely state-controlled industry. 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, Opec, Upstream, Supply, Ratings, Wti, Delivering, Consume
Industry:Energy, Industrial, Research
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