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Qatar Oil and Gas Report Q1 2011


Qatar Oil and Gas Report Q1 2011

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Price $530.00
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Publisher Business Monitor International
Date of Report Aug 1, 2011
Quick Overview
The latest Qatar Oil & Gas Report from BMI forecasts that the country will account for 3.35% of MiddleEastern (ME) regional oil demand by 2015, while providing 6.85% of supply. Middle East regional oiluse of 4.98mn barrels per day (b/d) in 2001 will rise to a forecast 7.40mn b/d in 2010. It should average7.70mn b/d in 2011 and then rise to around 8.70mn b/d by 2015. Regional oil production was 22.83mnb/d in 2001 and will average an estimated 24.96mn b/d in 2010. After an estimated 25.22mn b/d in 2011,it is set to rise to 27.24mn b/d by 2015. Oil exports are growing steadily, because demand growth islagging the pace of supply expansion. In 2001, the region was exporting an average 17.85mn b/d. Thistotal will ease to an estimated 17.55mn b/d in 2010 and is forecast to reach 18.54mn b/d by 2015. Iraq hasthe greatest export growth potential, followed by Qatar.
In terms of natural gas, the region will consume an estimated 391bn cubic metres (bcm) in 2010, withdemand of 483bcm targeted for 2015, representing 23.7% growth. Production of an estimated 467bcm in2010 should reach 614bcm in 2015 (+31.4%), which implies net exports rising to 130bcm by the end ofthe period. Qatar in 2010 will consume an estimated 5.94% of the region’s gas, with its market shareforecast at 7.94% by 2015. It is set to contribute an estimated 28.91% to 2010 regional gas productionand, by 2015, will account for 28.51% of supply.
For 2010 as a whole, we assume an average OPEC basket price of US$77.00/bbl (+26.5% y-o-y). The2010 US WTI price is now put at US$9.16/bbl. BMI is assuming an OPEC basket price of US$80.00/bblin 2011, with WTI averaging US$82.25, Brent at US$82.46/bbl, Urals delivering around US$81.21 andthe Dubai average being US$80.74/bbl. Our central assumption for 2012 is an OPEC price averagingUS$85.00/bbl, delivering WTI at approximately US$87.40 and Brent at US$87.60/bbl. From 2013onwards, we are using an average OPEC price of US$90.00/bbl.
For the whole of 2010, the BMI assumption for the global gasoline price is an average US$87.49/bbl,representing a y-o-y rise of 24.7%. The global gasoil forecast is for an average price of US$88.00/bbl,probably peaking in December 2010 at more than US$95/bbl. The full-year outturn represents a 27.6%increase from the 2009 level. For 2010, the annual jet price level is forecast to be US$89.500/bbl. Thiscompares with US$70.66/bbl in 2009. The 2010 average naphtha price is put by BMI at US$77.65/bbl,up almost 31% from the previous year’s level.
Qatar’s real GDP is assumed by BMI to rise by 15.8% in 2010, with average annual growth of 7.7% in2010-2015. We expect oil demand to rise from an estimated 218,000b/d in 2010 to 291,000b/d in 2015.State-owned Qatar Petroleum (QP) negotiates exploration and production (E&P) agreements, shares inupstream projects, and has 50% of oil and 40% of gas production. It has signed agreements with many ofthe leading international oil companies (IOCs), particularly for gas development and export projects. Ourestimates assume 1.64mn b/d of 2010 oil and liquids production, rising to 1.87mn b/d by the end of theforecast period. Gas production should reach 175bcm by 2015, up from an estimated 135bcm in 2010.Consumption is expected to rise from an estimated 23bcm to 38bcm by the end of the forecast period,allowing for exports of 137bcm.
Between 2010 and 2020, we are forecasting an increase in Qatari oil and gas liquids production of 25.6%,with volumes rising steadily to 2.06mn b/d by the end of the 10-year forecast period. Oil consumptionbetween 2010 and 2020 is set to increase by 79.1%, with growth slowing to an assumed 6.0% per annumtowards the end of the period and the country using 390,000b/d by 2020. Gas production is expected torise from an estimated 135bcm to 194bcm by the end of the period. With 2010-2020 demand growth of145%, this provides an export capability rising from an estimated 112bcm to 137bcm. Details of BMI’s10-year forecasts can be found in the appendix to this report.
Qatar now shares first place with Israel and the United Arab Emirates (UAE) in BMI’s compositeBusiness Environment (BE) ratings table, which combines upstream and downstream scores. The countryholds outright first place, two points ahead of the UAE, in BMI’s updated upstream BusinessEnvironment ratings. We see little risk over the short term of Qatar having its position challenged, thankslargely to the country’s extraordinary gas wealth. The country’s score benefits from a sound country riskprofile, healthy output growth prospects, high reserves-to-production ratios (RPR) and an attractivelicensing regime. Qatar is now fifth, ahead of Iraq, in BMI’s updated downstream Business Environmentratings, with a few high scores but longer-term progress up the rankings unlikely. It has remained aheadof Oman, in spite of low scores for refining capacity, oil demand, retail site intensity, population, nominalGDP and private company involvement in the downstream segment. Generally, healthy country riskfactors bolster the overall score.
Table of Contents
Executive Summary ........................................................................................................................................ 7
SWOT Analysis ................................................................................................................................................ 9
Qatar Political SWOT ........................................................................................................................................................................................... 9
Qatar Economic SWOT......................................................................................................................................................................................... 9
Qatar Business Environment SWOT ..................................................................................................................................................................... 9
Qatar Energy Market Overview ..................................................................................................................... 11
Global Oil Market Review .............................................................................................................................. 13
Regaining Momentum .............................................................................................................................................................................................. 13
Quarterly Trends ..................................................................................................................................................................................................... 14
Global Oil Market Outlook ............................................................................................................................. 15
Sitting Comfortably .................................................................................................................................................................................................. 15
Oil Price Forecasts .................................................................................................................................................................................................. 16
Oil Supply, Demand And Price Outlook ....................................................................................................... 17
Short-Term Demand Outlook ................................................................................................................................................................................... 17
Table: Global Oil Consumption (000b/d) ........................................................................................................................................................... 18
Short-Term Supply Outlook ..................................................................................................................................................................................... 18
Table: Global Oil Production (000b/d)............................................................................................................................................................... 19
Longer-Term Supply And Demand ........................................................................................................................................................................... 19
Oil Price Assumptions.............................................................................................................................................................................................. 22
Table: Crude Price Assumptions 2010 ................................................................................................................................................................ 22
Table: Oil Price Forecasts .................................................................................................................................................................................. 22
Regional Energy Market Overview ............................................................................................................... 23
Oil Supply And Demand ........................................................................................................................................................................................... 23
Table: Middle East Oil Consumption (000b/d) ................................................................................................................................................... 24
Table: Middle East Oil Production (000b/d) ...................................................................................................................................................... 25
Oil: Downstream ..................................................................................................................................................................................................... 26
Table: Middle East Oil Refining Capacity (000b/d) ............................................................................................................................................ 26
Gas Supply And Demand ......................................................................................................................................................................................... 27
Table: Middle East Gas Consumption (bcm) ...................................................................................................................................................... 27
Table: Middle East Gas Production (bcm) ......................................................................................................................................................... 28
Liquefied Natural Gas.............................................................................................................................................................................................. 29
Table: Middle East LNG Exports/(Imports) (bcm) .............................................................................................................................................. 29
Business Environment Ratings .................................................................................................................... 30
Middle East Region ............................................................................................................................................................................................. 30
Composite Scores................................................................................................................................................................................................ 30
Table: Regional Composite Business Environment Rating ................................................................................................................................. 31
Upstream Scores ................................................................................................................................................................................................. 32
Table: Regional Upstream Business Environment Rating................................................................................................................................... 32
Qatar Upstream Rating – Overview.................................................................................................................................................................... 33
Qatar Upstream Rating – Rewards ..................................................................................................................................................................... 33
Qatar Upstream Rating – Risks .......................................................................................................................................................................... 33
Downstream Scores ............................................................................................................................................................................................ 34
Table: Regional Downstream Business Environment Rating ............................................................................................................................... 34
Qatar Downstream Rating – Overview ............................................................................................................................................................... 35
Qatar Downstream Rating – Rewards ................................................................................................................................................................ 35
Qatar Downstream Rating – Risks ...................................................................................................................................................................... 35
Business Environment ................................................................................................................................. 36
Legal Framework................................................................................................................................................................................................ 36
Infrastructure ...................................................................................................................................................................................................... 37
Labour Force ...................................................................................................................................................................................................... 38
Foreign Investment Policy .................................................................................................................................................................................. 39
Tax Regime ......................................................................................................................................................................................................... 40
Security Risk ....................................................................................................................................................................................................... 40
Industry Forecast Scenario ........................................................................................................................... 41
Oil And Gas Reserves .............................................................................................................................................................................................. 41
Oil Supply And Demand ........................................................................................................................................................................................... 41
Gas Supply And Demand ......................................................................................................................................................................................... 42
LNG ......................................................................................................................................................................................................................... 43
Refining And Oil Products Trade ............................................................................................................................................................................. 45
Revenues/Import Costs............................................................................................................................................................................................. 46
Table: Qatar Oil And Gas – Historical Data And Forecasts ............................................................................................................................... 47
Other Energy ........................................................................................................................................................................................................... 48
Table: Qatar Other Energy – Historical Data And Forecasts ............................................................................................................................. 49
Key Risks To BMI’s Forecast Scenario .................................................................................................................................................................... 49
Long-Term Oil And Gas Outlook ............................................................................................................................................................................. 49
Oil And Gas Infrastructure ............................................................................................................................ 51
Oil Refineries ........................................................................................................................................................................................................... 51
Table: Refineries in Qatar .................................................................................................................................................................................. 51
GTL .......................................................................................................................................................................................................................... 52
Table: GTL Plants In Qatar ................................................................................................................................................................................ 52
LNG Terminals ........................................................................................................................................................................................................ 53
Table: LNG Terminals In Qatar ......................................................................................................................................................................... 54
Gas Pipelines ........................................................................................................................................................................................................... 55
Macroeconomic Outlook ............................................................................................................................... 57
Table: Qatar - Economic Activity ....................................................................................................................................................................... 59
Competitive Landscape ................................................................................................................................ 62
Table: Key Domestic And Foreign Companies In The Qatari Oil And Gas Sector .............................................................................................. 63
Overview/State Role ................................................................................................................................................................................................. 63
Licensing And Regulation ................................................................................................................................................................................... 63
International Energy Relations ........................................................................................................................................................................... 63
Table: Key Upstream Players ............................................................................................................................................................................. 65
Table: Key Downstream Player .......................................................................................................................................................................... 65
Company Monitor .......................................................................................................................................... 66
Qatar Petroleum (QP) ............................................................................................................................................................................................. 66
ExxonMobil Oil Qatar ............................................................................................................................................................................................. 69
Total Qatar .............................................................................................................................................................................................................. 72
Royal Dutch Shell .................................................................................................................................................................................................... 75
Maersk Oil – Summary ....................................................................................................................................................................................... 78
Occidental Petroleum – Summary....................................................................................................................................................................... 78
Qatargas – Summary .......................................................................................................................................................................................... 78
RasGas – Summary ............................................................................................................................................................................................. 79
Chevron – Summary............................................................................................................................................................................................ 79
Sasol – Summary................................................................................................................................................................................................. 79
ConocoPhillips – Summary ................................................................................................................................................................................. 80
Marathon Oil – Summary ................................................................................................................................................................................... 80
Anadarko Petroleum – Summary ........................................................................................................................................................................ 80
Eni – Summary .................................................................................................................................................................................................... 80
OVL – Summary .................................................................................................................................................................................................. 81
Cosmo Oil – Summary ........................................................................................................................................................................................ 81
Wintershall – Summary ....................................................................................................................................................................................... 81
GDF Suez – Summary ......................................................................................................................................................................................... 82
CNOOC – Summary............................................................................................................................................................................................ 82
PetroChina – Summary ....................................................................................................................................................................................... 83
Service Companies .............................................................................................................................................................................................. 84
Oil And Gas Outlook: Long-Term Forecasts ............................................................................................... 85
Regional Oil Demand .............................................................................................................................................................................................. 85
Table: Middle East Oil Consumption (000b/d) ................................................................................................................................................... 85
Regional Oil Supply ................................................................................................................................................................................................. 86
Table: Middle East Oil Production (000b/d) ...................................................................................................................................................... 86
Regional Refining Capacity ..................................................................................................................................................................................... 87
Table: Middle East Oil Refining Capacity (000b/d) ............................................................................................................................................ 87
Regional Gas Demand ............................................................................................................................................................................................. 88
Table: Middle East Gas Consumption (bcm) ...................................................................................................................................................... 88
Regional Gas Supply ................................................................................................................................................................................................ 89
Table: Middle East Gas Production (bcm) ......................................................................................................................................................... 89
Qatar Country Overview .......................................................................................................................................................................................... 89
Methodology And Risks To Forecasts ...................................................................................................................................................................... 89
Glossary Of Terms ........................................................................................................................................ 91
BMI Methodology .......................................................................................................................................... 92
How We Generate Our Industry Forecasts ......................................................................................................................................................... 92
Energy Industry .................................................................................................................................................................................................. 92
Cross checks ....................................................................................................................................................................................................... 93
Sources ............................................................................................................................................................................................................... 93
Oil And Gas Ratings Methodology...................................................................................................................................................................... 93
Table: Structure Of BMI’s Oil & Gas Business Environment Ratings ................................................................................................................. 94
Indicators ............................................................................................................................................................................................................ 95
Table: BMI’s Upstream Oil & Gas Business Environment Ratings – Methodology ............................................................................................ 95
Table: BMI’s Downstream Oil & Gas Business Environment Ratings – Methodology ........................................................................................ 96




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