Oil demand expected to increase to about 841,000 bpd in the MENA by 2015
Regional oil use of 3.06 million barrels per day (mbpd) in 2001 rose to an estimated 3.88 mbpd in 2010. It should average 3.96 mbpd in 2011 and then rise to around 4.48 mbpd by 2015, the latest Egypt Oil and Gas Report from BMI says.
Regional oil production was 7.93 mbpd in 2001, and in 2010 averaged an estimated 9.98 mbpd. From an estimated 10.37 mbpd in 2011, it is set to rise to 11.92 mbpd 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 4.87 mbpd. This total rose to an estimated 6.10 mbpd in 2010 and is forecast to reach 7.44 mbpd by 2015. Angola has the greatest production growth potential, with Nigerian exports set to climb if it can resolve recent quasi-political issues. In terms of natural gas, the region in 2010 consumed an estimated 123.7 billion cubic metres (bcm), with demand of 176.2 bcm forecast for 2015.
Production of an estimated 217.7 bcm in 2010 should reach 321.2 bcm in 2015, which implies net exports rising from an estimated 94 bcm to 145 bcm in 2015. Egypt consumed an estimated 36.38 percent of the region’s gas in 2010, with its market share set to be 32.11 percent by 2015. It contributed an estimated 29.40 percent to 2010 regional gas production and, by 2015, will account for 23.97 percent of supply.
The 2010 full-year outturn was $77.45/bbl for Opec crude, which delivered an average for North Sea Brent of $80.34/bbl and for West Texas Intermediate (WTI) of $79.61/bbl. The BMI price target of $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 percent and supply growth of 1.91 percent. With OECD inventories at the top of their five-year average range, we set a price forecast of $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,” says the report. Taking into account the risk premium that has been added to crude prices in response to actual and perceived threats to supply, BMI has now raised its benchmark Opec basket price forecast from $80 to $90/bbl for 2011 and from $85 to $95/bbl for 2012.
“Based on our expectations for differentials, this gives a forecast for Brent at $94/bbl in 2011 and $99/bbl in 2012. We have kept our long-term price assumption of $90/bbl (Opec basket) in place for the time being while we wait to see what path events in the Mena region take,” it says. Egyptian real GDP rose by an estimated 5.1 percent in 2010, with average annual growth of 5.2 percent forecast in 2010-2015. It expects oil demand to rise from an estimated 734,000 bpd in 2010 to 841,000 bpd in 2015, subject to national efforts to conserve oil and increase the use of gas.
State oil company Egyptian General Petroleum Corporation (EGPC) operates in partnership with various international oil companies (IOCs), and alone accounts for just 20 percent of the country’s oil output. In spite of higher recent IOC investment, combined oil and gas liquids output is forecast to decrease from an estimated 733,000 bpd in 2010 to 681,000 bpd in 2015. Gas production should reach 77 bcm by 2015, up from an estimated 64 bcm in 2010.