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

Recently published research from Business Monitor International, "France Oil & Gas Report Q3 2011", is now available at Fast Market Research
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Aug. 28, 2011 - PRLog -- The latest France Oil & Gas Report from BMI forecasts that the country will account for 14.6% of regional oil consumption by 2015, while making only a marginal contribution to supply. In Developed Europe, overall regional oil demand was an estimated 12.99mn barrels per day (b/d) in 2010 and is set to recover slightly to 13.02mn b/d in 2011, before climbing to 13.17mn b/d by 2015. Developed Europe regional oil production was 6.96mn b/d in 2001, and estimated 4.33mn b/d in 2010, slipping to a forecast 4.20mn b/d in 2011 and potentially dropping to just 3.51mn b/d in 2015. Regional net imports are set to rise from an estimated 8.66mn b/d in 2010 to 9.66mn b/d by the end of the forecast period. Norway will remain the only major net exporter, with the UK a growing net importer.

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In terms of natural gas, the Developed Europe region consumed an estimated 428bn cubic metres (bcm) in 2010, with demand of 468bcm targeted for 2015, representing 9.4% growth. Production of an estimated 251bcm in 2010 is set to fall to 249bcm in 2015, which implies net imports rising from the estimated 2010 level of 176bcm to some 219bcm by the end of the period. France's share of gas consumption in 2010 was an estimated 11.0%, while it accounted for just 0.6% of production. By 2015, its share of gas consumption is forecast to be 10.4%, while its share of production will remain low at just 0.8%.

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 per barrel (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.

French real GDP is assumed by BMI to have risen by 1.5% in 2010. We are forecasting 1.8% average annual growth in 2011-2015. Improved energy efficiency and efforts to cut carbon emissions will see oil consumption remain largely flat in spite of increased economic activity, with 2010 demand of 1.81mn b/d forecast to rise slightly to 1.92mn b/d in 2015. Crude oil imports are expected to reach 1.911mn b/d in 2015, with domestic crude oil production falling from 18,000b/d to just 9,000b/d in 2015. Gas demand is expected to rise more quickly than for oil, with new sources of supply being lined up by GDF Suez, which has signed import agreements with Egypt, Russia, Norway, Algeria and the Netherlands. Gas consumption is forecast to reach 48.6bcm by 2015, up from 46.9bcm in 2010. Production is negligible, so imports could rise to 46.6bcm coming from both expanded liquefied natural gas (LNG) import capacity and pipelines.

Between 2010 and 2020, we are forecasting an increase in French oil and gas liquids consumption of 5.5%, with estimated 2010 demand of 1.81mn b/d rising slowly to a peak of 1.92mn b/d in 2013/14. By 2020, we are forecasting French consumption of 1.91mn b/d. Production is set to fall from around 18,000b/d to just 5,000b/d during the same period. Gas demand should rise from the estimated 2010 level of 46.9bcm to a peak of 49.1bcm in 2017, based on LNG and pipeline imports. Details of BMI's 10-year forecasts can be found in the appendix to this report.

According to BMI's country risk team, France's long-term political risk score is 86.2, compared with the Developed Markets average of 87.8 and the global average of 62.9. Our long-term economic rating for the country is 66.9, just below the Developed Markets average of 67.2 and above the global average of 52.9. France has a fully privatised and competitive oil and gas industry. State holdings have been reduced greatly in electricity and gas suppliers Electricite de France (EDF) and GDF Suez. The upstream and downstream oil segments are privatised and deregulated, with considerable international oil company (IOC) involvement in refining and distribution, even though former state company Total has the greatest market share. 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, French, Opec, Supply, Wti, Crude, Delivering, Suez
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