Recently published research from Business Monitor International, « Gabon Oil & Gas Report Q3 2010 », is now available at Fast Market Research
The new Gabon Oil & Gas Report from BMI forecasts that the country will account for 0.41% of African regional oil demand by 2014, while providing 2.08% of supply. African regional oil use of 2.98mn barrels per day (b/d) in 2001 rose to an estimated 3.60mn b/d in 2009. It should average 3.67mn b/d in 2010 and then rise to
around 4.14mn b/d by 2014. Regional oil production was 7.84mn b/d in 2001, and in 2009 averaged an estimated 9.69mn b/d. It is set to rise to 11.79mn b/d by 2014. 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 4.86mn b/d. This total had risen to an estimated 6.08mn b/d in 2009 and is forecast to reach 7.66mn b/d by 2014. Angola has the greatest production growth potential, with Nigerian exports set to soar if it can resolve recent quasi-political issues.
In terms of natural gas, the region in 2009 consumed an estimated 122.9bn cubic metres (bcm), with demand of 175.9bcm forecast for 2014. Production of an estimated 242.6bcm in 2009 should reach 391.9bcm in 2014, which implies net exports rising from 120bcm in 2009 to 216bcm in 2014. Gabon is neither a significant regional producer nor consumer of gas.
We are sticking with our forecast that the OPEC basket of crudes will average US$83.00/bbl in 2010. Wide variations in crude differentials so far in 2010 make forecasting tricky for Brent, West Texas Intermediate (WTI) and Urals, but we believe the three benchmarks will average around US$85.11, US$88.22 and US$83.62/bbl respectively, with Dubai coming in at US$83.14. By 2011, there should be further growth in oil consumption and more room for OPEC to regain market share and reduce surplus capacity through higher production quotas. We are assuming a further increase in the OPEC basket price to an average of US$85.00/bbl. For 2012 and beyond, we continue to use a central case forecast of US$90.00/bbl for the OPEC basket.
For 2010, the BMI assumption for premium unleaded gasoline is an average global price of US$96.83/bbl. The year-on-year (y-o-y) rise in 2010 gasoline prices is put at 38%. Gasoil in 2010 is expected to average US$92.45/bbl, with the full-year outturn representing a 37% increase from the 2009 level. For jet fuel in 2010, the annual level is forecast to be US$95.58/bbl. This compares with US$70.66/bbl in 2009. The 2010 average naphtha price is put by BMI at US$82.46/bbl, up 39% from the previous year’s level.
Gabon’s real GDP is assumed by BMI to have risen by 0.9% in 2009, followed by forecast 5.5% growth in 2010. We are assuming average annual growth of 4.0% in 2010-2014. We expect oil demand to rise from an estimated 13,560b/d in 2009 to 16,980b/d in 2014. State oil company Societe Nationale Petroliere Gabonaise (SNPG) operates in partnership with various international oil companies (IOCs). Combined oil and gas liquids output is forecast to decrease from an estimated 255,000b/d in 2009 to 245,000b/d in 2014. Gas production should reach 1bcm by 2014, up from an estimated 0.1bcm in 2009. Consumption is expected to follow the production trend, with no need for imports but no surplus gas to export.
Between 2010 and 2019, we are forecasting a decrease in Gabon oil and gas liquids production of 16.5%, with volumes peaking at 265,000b/d in 2010, before falling steadily to 221,000b/d by the end of the 10- year forecast period. Oil consumption between 2010 and 2019 is set to increase by 55.1%, with growth slowing to an assumed 5.0% per annum towards the end of the period and the country using 22,000b/d by 2019. Gas production is expected to rise to 1bcm by the end of the period. With demand rising by 400% between 2010 and 2019, there should be a balanced market, with no need for imports or scope for exports. Details of BMI’s 10-year forecasts can be found in the appendix to this report.
Gabon holds seventh place in BMI’s composite Business Environment (BE) Ratings table, which combines upstream and downstream scores. The country occupies second place in our updated upstream Business Environment Ratings, behind Libya. It is in no position to move higher over the medium term, and the presence of Algeria, Nigeria and Angola below poses a threat. The county’s score benefits from healthy gas output growth prospects, a particularly high gas reserves-to-production ratio (RPR) and attractive licensing terms. The country’s risk environment is fragile, but this is hardly uncommon in Africa. Gabon 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 new refineries are built. It now shares eighth place with Republic of Congo (RoC), thanks to low scores for refining capacity, oil and gas demand, likely refining capacity expansion, nominal GDP and population.
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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 www.fastmr.com/catalog/publishers.aspx?pubid=1010
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Author:
Bill Thompson
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