Bulgaria Oil and Gas Report Q1 2011
The latest Bulgaria Oil & Gas Report from BMI forecasts that the country will account for 1.59% of Central and Eastern European (CEE) regional oil demand by 2015, while making no meaningful contribution to supply. CEE regional oil use of 5.42mn barrels per day (b/d) in 2001 will have risen to an estimated 6.05mn b/d in 2010. It should increase to around 6.89mn b/d by 2015. Regional oil production was 8.89mn b/d in 2001 and in 2010 will have averaged an estimated 13.82mn b/d. It is set to rise to 15.08mn b/d by 2015. Oil exports are growing steadily, because demand growth is lagging the pace of supply expansion. In 2001, the region was exporting an average of 3.47mn b/d. This total will have risen to an estimated 7.76mn b/d in 2010 and is forecast to reach 8.19mn b/d by 2015. Azerbaijan and Kazakhstan have the greatest production growth potential, although Russia will remain the key exporter. In terms of natural gas, the region in 2010 will have consumed an estimated 636.3bn cubic metres (bcm), with demand of 747.7bcm targeted for 2015, representing 17.5% growth. Production of an estimated 787.9bcm in 2010 should reach 954.2bcm in 2015, which implies net exports rising from an estimated 151.6bcm in 2010 to 206.5bcm by the end of the period. Bulgaria’s share of gas consumption in 2010 is an estimated 0.47%, while it has no significant share of production. By 2015, its share of demand is forecast to be 0.66%.
For 2010 as a whole, we assume an average OPEC basket price of US$77.00/bbl, +26.5% year-on-year (y-o-y). The 2010 US WTI price is now put at US$79.16/bbl. BMI is assuming an OPEC basket price of US$80.00/bbl in 2011, with WTI averaging US$82.25, Brent at US$82.46/bbl, Urals delivering around US$81.21 and the Dubai average being US$80.74/bbl. Our central assumption for 2012 is an OPEC price averaging US$85.00/bbl, delivering WTI at approximately US$87.40 and Brent at US$87.60/bbl. From 2013 onwards, 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 year-on-year 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. This compares 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.
Bulgarian real GDP is assumed by BMI to have fallen by 1.6% in 2010. We are forecasting average annual growth of 2.5% in 2010-2015. Oil demand beyond the weakness of 2009/10 is forecast to rise by up to 2.0% per annum, which suggests that consumption could reach 109,000b/d by 2015. Imports can be expected to grow in line with consumption, as exploration efforts in the largely privatised hydrocarbons sector by small international oil companies (IOCs) do not appear likely to deliver increased domestic crude volumes. Gas consumption is rising well ahead of domestic supply. While gas output could reach 1.4bcm by 2015, demand is heading for 5.0bcm, requiring imports of 3.6bcm.
Between 2010 and 2020, we are forecasting an increase in Bulgarian oil consumption of 21.3%, with import volumes rising steadily from an estimated 96,000b/d in 2010 to 121,000b/d by the end of the 10- year forecast period. Gas production is expected to rise from the estimated 2010 level of 0.2bcm to a peak of 1.5bcm by 2014, before slipping to 1.0bcm by 2020. Given forecast demand growth of 111%, import dependency increases from the estimated 2010 level of 2.8bcm to 5.3bcm at the end of the period. Details of BMI’s 10-year forecasts can be found in the appendix to this report.
Bulgaria now takes 10th place, behind Hungary, in BMI’s composite Business Environment (BE) ratings table, which combines upstream and downstream scores. It now shares sixth place with Romania in BMI’s updated upstream Business Environment ratings. Its minimal oil and gas reserves, limited production potential and constrained competitive landscape work against the country, but are offset by reasonable country risk factors. There is little scope for further progress up the league table during the next few quarters. Bulgaria now shares 11th place with Slovenia, Slovakia and Uzbekistan in BMI’s downstream Business Environment ratings, with few particularly high scores and no reason to expect much near-term progress further up the rankings. Refining capacity is among the regions lowest, and gas consumption is particularly modest. The relatively high level of retail site intensity represents another weak suit, although gas demand growth prospects are among the best in the CEE region."
For 2010 as a whole, we assume an average OPEC basket price of US$77.00/bbl, +26.5% year-on-year (y-o-y). The 2010 US WTI price is now put at US$79.16/bbl. BMI is assuming an OPEC basket price of US$80.00/bbl in 2011, with WTI averaging US$82.25, Brent at US$82.46/bbl, Urals delivering around US$81.21 and the Dubai average being US$80.74/bbl. Our central assumption for 2012 is an OPEC price averaging US$85.00/bbl, delivering WTI at approximately US$87.40 and Brent at US$87.60/bbl. From 2013 onwards, 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 year-on-year 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. This compares 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.
Bulgarian real GDP is assumed by BMI to have fallen by 1.6% in 2010. We are forecasting average annual growth of 2.5% in 2010-2015. Oil demand beyond the weakness of 2009/10 is forecast to rise by up to 2.0% per annum, which suggests that consumption could reach 109,000b/d by 2015. Imports can be expected to grow in line with consumption, as exploration efforts in the largely privatised hydrocarbons sector by small international oil companies (IOCs) do not appear likely to deliver increased domestic crude volumes. Gas consumption is rising well ahead of domestic supply. While gas output could reach 1.4bcm by 2015, demand is heading for 5.0bcm, requiring imports of 3.6bcm.
Between 2010 and 2020, we are forecasting an increase in Bulgarian oil consumption of 21.3%, with import volumes rising steadily from an estimated 96,000b/d in 2010 to 121,000b/d by the end of the 10- year forecast period. Gas production is expected to rise from the estimated 2010 level of 0.2bcm to a peak of 1.5bcm by 2014, before slipping to 1.0bcm by 2020. Given forecast demand growth of 111%, import dependency increases from the estimated 2010 level of 2.8bcm to 5.3bcm at the end of the period. Details of BMI’s 10-year forecasts can be found in the appendix to this report.
Bulgaria now takes 10th place, behind Hungary, in BMI’s composite Business Environment (BE) ratings table, which combines upstream and downstream scores. It now shares sixth place with Romania in BMI’s updated upstream Business Environment ratings. Its minimal oil and gas reserves, limited production potential and constrained competitive landscape work against the country, but are offset by reasonable country risk factors. There is little scope for further progress up the league table during the next few quarters. Bulgaria now shares 11th place with Slovenia, Slovakia and Uzbekistan in BMI’s downstream Business Environment ratings, with few particularly high scores and no reason to expect much near-term progress further up the rankings. Refining capacity is among the regions lowest, and gas consumption is particularly modest. The relatively high level of retail site intensity represents another weak suit, although gas demand growth prospects are among the best in the CEE region."
Contents
Executive SummarySWOT Analysis
Bulgaria Political SWOT
Bulgaria Economic SWOT
Bulgaria Business Environment SWOT
Bulgarian Energy Market Overview
Global Oil Market Review
Regaining Momentum
Quarterly Trends
Global Oil Market Outlook
Sitting Comfortably
Oil Price Forecasts
Oil Supply, Demand And Price Outlook
Short-Term Demand Outlook
Table: Global Oil Consumption (000b/d)
Short-Term Supply Outlook
Table: Global Oil Production (000b/d)
Longer-Term Supply And Demand
Oil Price Assumptions
Table: Crude Price Assumptions 2010
Table: Oil Price Forecasts
Regional Energy Market Overview
Oil Supply And Demand
Table: Central/Eastern Europe Oil Consumption (000b/d)
Table: Central/Eastern Europe Oil Production (000b/d)
Oil: Downstream
Table: Central/Eastern Europe Oil Refining Capacity (000b/d)
Gas Supply And Demand
Table: Central/Eastern Europe Gas Consumption (bcm)
Table: Central/Eastern Europe Gas Production (bcm)
Liquefied Natural Gas
Table: Central/Eastern Europe LNG Exports/(Imports) (bcm)
Business Environment Ratings
Central/Eastern Europe Region
Composite Scores
Table: Regional Composite Business Environment Rating
Upstream Scores
Table: Regional Upstream Business Environment Rating
Bulgaria Upstream Rating – Overview
Bulgaria Upstream Rating – Rewards
Bulgaria Upstream Rating – Risks
Downstream Scores
Table: Regional Downstream Business Environment Rating
Bulgaria Downstream Rating – Overview
Bulgaria Downstream Rating – Rewards
Bulgaria Downstream Rating – Risks
Business Environment
Legal Framework
Infrastructure
Labour Force
Foreign Investment Policy
Tax Regime
Security Risk
Industry Forecast Scenario
Oil And Gas Reserves
Oil Supply And Demand
Gas Supply And Demand
Refining And Oil Products Trade
Revenues/Import Costs
Table: Bulgaria Oil And Gas – Historical Data And Forecasts
Other Energy
Table: Bulgaria Other Energy – Historical Data And Forecasts
Key Risks To BMI’s Forecast Scenario
Long-Term Oil And Gas Outlook
Oil And Gas Infrastructure
Oil Refineries
Service Stations
Oil Storage Facilities
Oil Terminals/Ports
Oil Pipelines
LNG Terminals
Gas Storage Facilities
Gas Pipelines
Macroeconomic Outlook
Table: Bulgaria – Economic Activity
Competitive Landscape
Executive Summary
Table: Key Players Bulgarian Oil And Gas Sector
Overview/State Role
Licensing And Regulation
Government Policy
Licensing Rounds
International Energy Relations
Table: Key Upstream Players
Table: Key Downstream Players
Company Monitor
Lukoil Neftekhim
Oil & Gas Exploration & Production plc
Petrol
OMV Bulgaria
Shell Bulgaria
Eko-Elda Bulgaria
Melrose Resources
Bulgargaz – Summary
Direct Petroleum Exploration – Summary
JKX Oil & Gas/Aurelian Oil & Gas – Summary
Prista Oil – Summary
Gazprom – Summary
Others – Summary
Oil And Gas Outlook: Long-Term Forecasts
Regional Oil Demand
Table: CEE Oil Consumption (000b/d)
Regional Oil Supply
Table: CEE Oil Production (000b/d)
Regional Refining Capacity
Table: CEE Oil Refining Capacity (000b/d)
Regional Gas Demand
Table: CEE Gas Consumption (bcm)
Regional Gas Supply
Table: CEE Gas Production (bcm)
Bulgaria Country Overview
Methodology And Risks To Forecasts
Glossary Of Terms
Oil And Gas Ratings: Revised Methodology
Introduction
Ratings Overview
Table: BMI Oil And Gas Business Environment Ratings: Structure
Indicators
Table: BMI Oil And Gas Business Environment Upstream Ratings: Methodology
Table: BMI Oil And Gas Business Environment Downstream Ratings: Methodology
BMI Methodology
How We Generate Our Industry Forecasts
Energy Industry
Cross checks
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