Venezuela Oil and Gas Report Q3 2008

Venezuela Oil and Gas Report Q3 2008 - Companies and Markets adds new report
Print article
Refer to a friend
© companiesandmarkets.com
2008-09-25 09:10:59 - Venezuela Oil and Gas Report Q3 2008 - a new market research report on http://www.companiesandmarkets.com
www.companiesandmarkets.com/Summary-Market-Report/Venezuela-Oil- ..
The latest Venezuela Oil & Gas Report forecasts that the country will account for 8.28% of Latin America regional oil demand by 2012, while providing 26.15% of supply. Latin America regional oil use of 6.84mn barrels per day (b/d) in 2001 reached an estimated 7.28mn b/d in 2007. It should rise to around
8.16mn b/d by 2012. In terms of natural gas, the region in 2007 consumed an estimated 197bcm, with demand of 267bcm targeted for 2012, representing growth of 35.6% between 2007 and 2012. Production of an estimated 208bcm in 2007 should reach 282bcm in 2012, which implies end-period net exports of around 15bcm per annum. Venezuela contributed an estimated 17.29% to 2007 regional gas consumption, while producing 16.38%. By 2012, it is expected to consume 19.50% of the region’s gas, while contributing 19.87% to supply. In Q108, we estimate that the OPEC basket price averaged US$92.64 per barrel – up around 9% from the Q407 level. The OPEC basket price had exceeded US$102 by the middle of March, slipping back towards US$96/bbl later in the month. The estimated Q108 average prices for the main marker blends are now US$96.54 for Brent, US$97.31 for WTI and US$93.44/bbl for Russian Urals (Mediterranean delivery). Our projections for 2008 as a whole are revised upwards from BMI’s last quarterly report. We are now assuming an OPEC basket price average of US$81 per barrel for 2008, compared with the US$74 estimate provided by our last quarterly report. Based on recent price differentials, this implies Brent at US$84.71, WTI averaging US$85.63/bbl, and Urals at US$81.88/bbl. Real GDP growth is now forecast at 5.8% for 2008, down from an estimated 8.4% in 2007. We are assuming 3.0% growth in 2009, 3.2% in 2010, followed by, 3.3% in 2011 and 3.5% in 2012. State-owned Petróleos de Venezuela (PdVSA) works in co-operation with numerous international oil company (IOC) partners in conventional and heavy oil projects. While recent re-nationalisation moves, changes in taxation and alterations to the licensing system have reduced foreign involvement, several key players appear committed to the country. We are assuming oil and gas liquids production of 2.93mn b/d by 2012, with the country expected to pump 2.75mn b/d in 2008. Consumption is forecast to increase by around 3% per annum to 2012, implying demand of 675,000b/d by this point. The export capability would thus be about 2.26mn b/d by 2012. Gas production is forecast to rise from an estimated 34bcm in 2007 to 56bcm over the period, allowing 4bcm of exports by 2012. Between 2007 and 2018, we are forecasting an increase in Venezuelan oil production of 23.2%, with liquids volumes rising steadily from 2.72mn b/d to 3.35mn b/d. Oil consumption between 2007 and 2018 is set to increase by 38%, with growth slowing to an assumed 3.0% per annum towards the end of the period and the country using 806,000b/d by 2018. Gas production is expected to rise steadily, from around 34bcm in 2007 to 78bcm in 2018. With demand growth of 105%, this implies export potential rising to more than 8bcm by 2018. Details of the new 10-year forecasts can be found in the Appendix of this report, which provides global, regional and country-specific projections. Venezuela now ranks third in BMI’s newly revised Upstream Business Environment rating, having been overtaken by Peru in spite of its vast hydrocarbons resource base. It lags just one point behind Peru, so is capable of regaining its higher position if the overall risk situation were to improve. Colombia is a comfortable distance behind. As well as high scores for reserves, production growth potential and reserves-to-production ratios (RPR), Venezuela benefits from the substantial (but decreasing) number of international companies active within its upstream industry. The country now ranks seventh in BMI’s updated Downstream Business Environment rating, reflecting its substantial refining capacity, low retail site intensity and unrivalled growth in GDP per capita. Chile, above, is within reach, but Mexico – just two points behind – could eventually challenge for seventh place.
www.companiesandmarkets.com/Summary-Market-Report/Venezuela-Oil- ..
Author:
Mike King
e-mail
Web:www.companiesandmarkets.com
Phone: 07813 784393