Slovakia Oil & Gas Report Q4 2010

Date: October 22, 2010
Pages: 81
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Download
ID: SB04AE93580EN

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This latest Slovakia Oil & Gas Report from BMI forecasts that the country will account for 1.39% of Central and Eastern European (CEE) regional oil demand by 2014, while providing no significant contribution to supply. CEE regional oil use of 5.42mn b/d in 2001 will rise to a forecast 6.02mn b/d by the end of 2010. It should increase to around 6.68mn b/d by 2014. Regional oil production was 8.89mn b/d in 2001 and will average an estimated 13.67mn b/d in 2010. It is set to rise to 14.44mn b/d by 2014.

Oil exports are growing steadily, because demand growth is lagging the pace of supply expansion. In 2001, the region was exporting an average 3.47mn b/d. This total will rise to an estimated 7.65mn b/d in 2010 and is forecast to reach 7.76mn b/d by 2014. Azerbaijan and Kazakhstan have the greatest production growth potential, although Russia will remain the key exporter.

In terms of natural gas, the region consumed an estimated 638.6bcm in 2010, with demand of 728.8bcm targeted for 2014, representing 14.1% growth. Production of a projected 788.4bcm in 2010 should reach 936.4bcm in 2014, which implies net exports rising from 149.8bcm in 2010 to 207.5bcm by the end of the period. Slovakia’s share of gas consumption in 2010 will be an estimated 0.89%, while its share of production is negligible. By 2014, its share of demand is forecast to be 0.92%.

For 2010 as a whole, we continue to assume an average OPEC basket price of US$83.00/bbl (+36.4% year-on-year (y-o-y). Risk is now clearly on the downside, thanks to the slow progress made during June. However, a full year outturn in excess of US$80 remains a strong possibility and we see no need to review our assumptions at this point. The 2010 US WTI price is now put at US$87.63/bbl. BMI is assuming an OPEC basket price of US$85.00/bbl in 2011, with WTI averaging US$89.74. Our central assumption for 2012 and beyond is an OPEC price averaging US$90.00/bbl, delivering WTI at just over US$95.00.

For 2010, the BMI assumption for premium unleaded gasoline is an average global price of US$95.45/bbl. The overall y-o-y rise in 2010 gasoline prices is put at 36%. Gasoil in 2010 is expected to average US$93.23/bbl. The full-year outturn represents a 35% increase from the 2009 level. For 2010, the annual jet price level is forecast to be US$95.90/bbl, compared with US$70.66/bbl in 2009. The 2010 average naphtha price is put by BMI at US$83.53/bbl, up 41% from the previous year’s level.

BMI forecasts Slovak real GDP to rise by 3.1% in 2010. We are assuming average annual growth of 3.6% in 2010-2014. Beyond the weakness of 2009/2010, oil consumption is forecast to rise rapidly, averaging around 2-3% per annum. There is scope for oil consumption to reach 93,000b/d by 2014. This volume will be imported, largely from Russia. Natural gas demand may also rise at a more rapid rate if the power industry builds new gas-fired plants, although the residential gas market is close to saturation.

Our forecast is for Slovakia to be consuming 6.7bcm of gas by 2014, virtually all of which will be imported.

Between 2010 and 2019, we are forecasting an increase in Slovak oil consumption of 29.9%, with import volumes rising steadily from an estimated 83,000b/d to 108,000b/d by the end of the 10-year forecast period. Gas consumption is expected to up from an estimated 5.7bcm to 8.2bcm by 2019, met largely by imports. Details of BMI’s 10-year forecasts can be found in the appendix to this report.

Slovakia now shares 13th place with Croatia in BMI’s composite Business Environment (BE) Ratings table, which combines upstream and downstream scores. It is now ranked equal 11th with Ukraine in BMI’s updated upstream Business Environment Ratings. Licensing, privatisation and country risk factors help its score, although these are offset by hydrocarbons weakness. Over the medium term, Slovakia is at some risk of being left behind by Ukraine.

The country is also near the bottom of the league table in BMI’s downstream Business Environment Ratings. Only in oil demand growth potential does the country score particularly well, and progress further up the rankings from 13th place seems unlikely over the medium term. Country risk factors are generally favourable and there is an established competitive landscape. Bulgaria and Croatia are just one point below it in the rankings, and both countries have the potential to mount a challenge for Slovakia’s 13th place in the long term.
Executive Summary
SWOT Analysis
Slovakia Political SWOT
Slovakia Economic SWOT
Slovakia Business Environment SWOT
Slovakia Energy Market Overview
Global Oil Market Review
Drifting With The Tide
Quarterly Trends
Deepwater Turbulence
Global Oil Market Outlook
Waiting For The Wind To Change
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
Slovakia Upstream Rating – Overview
Slovakia Upstream Rating – Rewards
Slovakia Upstream Rating – Risks
Downstream Scores
    Table: Regional Downstream Business Environment Rating
Slovakia Downstream Rating – Overview
Slovakia Downstream Rating – Rewards
Slovakia Downstream Rating – Risks
Business Environment
Legal Framework
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: Slovakia Oil And Gas – Historical Data And Forecasts
Other Energy
    Table: Slovakia 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 Pipelines
Gas Storage Facilities
Gas Pipelines
Macroeconomic Outlook
    Table: Slovakia - Economic Activity
Competitive Landscape
Executive Summary
    Table: Key Players – Slovak Oil And Gas Sector
Overview/State Role
Licensing And Regulation
Government Policy
International Energy Relations
    Table: Key Downstream Players
Company Monitor
OMV Slovakia
Slovensky Plynarensky Priemysel (SPP) – Summary
Transpetrol – Summary
JKX Oil And Gas – Summary
Shell – Summary
BP – Summary
Eni – Summary
Nafta – Summary
Aurelian Oil and Gas – 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)
Slovakia Country Overview
Methodology And Risks To Forecasts
Glossary Of Terms
Oil And Gas Ratings: Revised Methodology
Ratings Overview
    Table: BMI Oil And Gas Business Environment Ratings: Structure
    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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