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Azerbaijan Oil & Gas Quarterly Report
Management Report
Published: April 2009
Pages: 96
Tables: For full details, please email keithw@cmsinfo.com
From: GBP 585.00 Buy Now!
Research from: Business Monitor International
Sector: Oil & Gas
The Azerbaijan Oil & Gas Report
Independent 10-year oil and gas industry forecasts for Azerbaijan.
Original oil and gas market research and oil and gas sector trend analysis for Azerbaijan’s oil and gas industry.
Competitive intelligence, Azerbaijani oil and gas company rankings and SWOT analyses on international and domestic oil and gas companies in Azerbaijan.
The Azerbaijan Oil & Gas Report has been researched at source in 2008, and features latest available data and forecasts for Azerbaijan to end- covering headline indicators for oil & gas, LNG, coal and power; company rankings and competitive landscapes covering oil & gas exploration and production in Azerbaijan, refining, oil & gas distribution and fuels retailing; and analysis of latest industry developments, trends and regulatory issues within Azerbaijan.
Business Monitor International's Azerbaijan Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Azerbaijani oil and gas industry.
Key Benefits of Report Benchmark BMI’s Independent 10-Year Oil & Gas Industry Forecast for Azerbaijan to test consensus views - a key input for successful budgeting and strategic business planning in the Azerbaijani oil and gas market.
Target Business Opportunities & Risks in the Azerbaijani Oil & Gas Sector through reviews of latest industry trends, regulatory changes, and major deals, projects and investments in Azerbaijan.
Exploit The Latest Competitive Azerbaijani Oil & Gas Intelligence & Company SWOTS on your competitors and peers through company rankings by sales, market share and ownership structure - includes multi national and national companies in Azerbaijan.
CoverageExecutive Summary
Summary of BMI’s key forecasts and industry analysis, covering oil and gas reserves, supply, demand, refining, coal and power, and primary energy, plus analysis of landmark company developments and key changes in the regulatory environment.
Regional Overview
Regional perspective on size and value of industry sector; comparative rankings by production, refining, imports and exports; overview of industry landscape and key players; assessment of business operating environment and latest regulatory developments.
Business Environment Rankings
A unique comparative study undertaken by BMI on the relative business climates across all regional markets covered. A rankings table highlights the merits of each market from an investor angle, giving scores for indicators such as Oil & Gas Supply and Demand Growth, Oil & Gas Reserves, Licensing Framework and the local Competitive Environment, as well as Economic and Political Risk.
Oil Market Outlook
BMI analyses and forecasts oil prices out to , monitoring supply and demand in terms of oil production and consumption across the region.
BMI 10-Year Industry Forecast
Historic data series and 10-year forecasts to end- for all key industry indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:
Oil reserves (bn barrels), production, consumption, refinery capacity and throughputs (000 b/d)
Oil exports (000 b/d), value of oil exports (US$mn - BMI base case) - Oil price (US$/bbl, OPEC basket)
Value of oil exports at constant US$30/bbl and constant US$60/bbl (US$mn)
Proven gas reserves (tcm), production and consumption (bcm)
Gas exports/(imports) (bcm)
Value of gas exports/(imports) (US$mn); value of gas exports/(imports) at constant US$30/bbl and US$60/bbl (US$mn)
Value of petroleum exports (US$mn); value of petroleum exports at constant US$30/bbl and US$60/bbl (US$mn)
BMI 10-Year Macroeconomic Forecast
BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.
Competitive Landscape & Rankings
Comparative company analyses and rankings by US$ sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, oil production (‘000 b/d) and % market share, downstream capacity (‘000 b/d) and % market share.
Company Profiles & SWOTS
Company profiles, including SWOT analyses, senior executives and full contact details, business activity, products and services, foreign direct investments and projects. Executive Summary
The latest Azerbaijan Oil & Gas Report from BMI forecasts that the country will account for 2.33% of the Central and Eastern European (CEE) regional oil demand by 2013, while providing 8.69% of supply. CEE regional oil use of 4.65mn barrels per day (b/d) in 2001 rose to 5.27mn b/d in 2007. It should average 5.36mn b/d in 2008 and then rise to around 5.99mn b/d by 2013. Regional production of 12.92mn b/d in 2007 is forecast to reach 14.96mn b/d by 2013. In terms of natural gas, the region in 2007 consumed 619bn cubic metres (bcm), with demand of 753bcm targeted for 2013, representing 21.61% growth. Production of 756bcm in 2007 should reach 913bcm in 2013, which implies net exports rising from 137bcm in 2007 to 161bcm by the end of the period. Azerbaijan's share of gas consumption in 2007 was 1.34%, while its share of production was 1.36%. By 2013, its share of gas consumption is forecast to be 1.95%, with the country accounting for 2.41% of supply.
In Q308, we estimate that the OPEC basket price averaged US$113.60 per barrel – down around 3.4% from the Q208 level. The OPEC basket price averaged US$112.41 in August and US$97.16/bbl in September. In October, we are assuming an average of around US$113.30. The estimated Q308 average prices for the main marker blends are now US$115.67 for Brent, US$117.22 for WTI and US$113.43/bbl for Russian Urals (Mediterranean delivery). Our projections for 2008 as a whole are unchanged from the last oil market report. We are still assuming an OPEC basket price average of US$110 per barrel for 2008. Based on recent price differentials, this implies Brent at US$113.33, WTI averaging US$114.58/bbl, and Urals at US$110.36/bbl. Our central view is that the OPEC basket price will fall from US$110/bbl in 2008 to US$96/bbl in 2009, before settling around US$90/bbl in 2010 onwards.
In terms of our refined products forecasts, the BMI composite (Rotterdam, Singapore and New York) global indicator price for unleaded gasoline is expected to average approximately US$117.50/bbl during 2008. Our jet forecast for 2008 is just under US$141/bbl, up from US$89/bbl in 2007. The 60% annual increase represents the second biggest for the key refined products. With gasoil, BMI is assuming a similar gain in 2008, to an average US$137/bbl. Naphtha is expected to exhibit more modest growth, rising from US$75 to US$106/bbl (+41%). During 2009, we are expecting products prices to follow the underlying crude trend lower, but to prove more resilient than the feedstock – implying a recovery in refining margins. Gasoline in 2009 is estimated at US$103/bbl, with jet falling to US$127/bbl. Gasoil is expected to average US$122/bbl, with naphtha slipping to US$91/bbl.
Azeri real GDP growth is now estimated by BMI at 15.9% for 2008, following 25.0% in 2007. We are assuming 12.8% growth in 2009, 9.6% in 2010, followed by 8.0% in 2011, 6.0% in 2012 and 6.5% in 2013. Domestic oil consumption, having tumbled since the 1990s, should now have resumed a growth tack, estimated at an average 7% per annum. By 2013, the country could be using 140,000b/d of oil. The main government vehicle Socar currently accounts for almost half of domestic oil production but, in partnership with international oil companies (IOCs), should raise national output from 868,000b/d in 2007 to 1.30mn b/d by 2011-2013. Gas output should increase from 10.3bcm to 22.0bcm during the forecast period.
Between 2007 and 2018, we are forecasting an increase in Azeri oil and gas liquids production of 26.7%, with volumes reaching a plateau of 1.3mn b/d in 2011-2014, before falling to 1.1mn b/d by the end of the 10-year forecast period. Oil consumption between 2007 and 2018 is set to increase by 110.5%, with growth slowing to an assumed 7.0% per annum towards the end of the period and the country using 196,000b/d by 2018. Gas production should rise from the 2007 level of 10.3bcm to 30bcm by 2018, providing export potential increasing to 11.2bcm. Details of the new BMI 10-year forecasts can be found in the appendix to this report, which provides global, regional and country-specific projections.
Azerbaijan this quarter occupies second place in BMI’s updated Upstream Business Environment rating, slipping behind neighbour Kazakhstan. Its oil and gas production growth outlook, asset immaturity, high reserves-to-production ratios (RPR) and competitive landscape work in the country’s favour, but are undermined by a relatively unappealing risk environment. The country is above the mid-point of the league table in BMI’s Downstream Business Environment rating, with some high scores but progress further up the rankings somewhat unlikely. The low level of retail site intensity represents a strong suit, along with region-leading oil demand growth prospects. Kazakhstan is just behind it in the regional rankings, and there is some long-term chance of the rival Caspian state challenging for Azerbaijan’s fifth place.
Independent 10-year oil and gas industry forecasts for Azerbaijan.
Original oil and gas market research and oil and gas sector trend analysis for Azerbaijan’s oil and gas industry.
Competitive intelligence, Azerbaijani oil and gas company rankings and SWOT analyses on international and domestic oil and gas companies in Azerbaijan.
The Azerbaijan Oil & Gas Report has been researched at source in 2008, and features latest available data and forecasts for Azerbaijan to end- covering headline indicators for oil & gas, LNG, coal and power; company rankings and competitive landscapes covering oil & gas exploration and production in Azerbaijan, refining, oil & gas distribution and fuels retailing; and analysis of latest industry developments, trends and regulatory issues within Azerbaijan.
Business Monitor International's Azerbaijan Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Azerbaijani oil and gas industry.
Key Benefits of Report Benchmark BMI’s Independent 10-Year Oil & Gas Industry Forecast for Azerbaijan to test consensus views - a key input for successful budgeting and strategic business planning in the Azerbaijani oil and gas market.
Target Business Opportunities & Risks in the Azerbaijani Oil & Gas Sector through reviews of latest industry trends, regulatory changes, and major deals, projects and investments in Azerbaijan.
Exploit The Latest Competitive Azerbaijani Oil & Gas Intelligence & Company SWOTS on your competitors and peers through company rankings by sales, market share and ownership structure - includes multi national and national companies in Azerbaijan.
CoverageExecutive Summary
Summary of BMI’s key forecasts and industry analysis, covering oil and gas reserves, supply, demand, refining, coal and power, and primary energy, plus analysis of landmark company developments and key changes in the regulatory environment.
Regional Overview
Regional perspective on size and value of industry sector; comparative rankings by production, refining, imports and exports; overview of industry landscape and key players; assessment of business operating environment and latest regulatory developments.
Business Environment Rankings
A unique comparative study undertaken by BMI on the relative business climates across all regional markets covered. A rankings table highlights the merits of each market from an investor angle, giving scores for indicators such as Oil & Gas Supply and Demand Growth, Oil & Gas Reserves, Licensing Framework and the local Competitive Environment, as well as Economic and Political Risk.
Oil Market Outlook
BMI analyses and forecasts oil prices out to , monitoring supply and demand in terms of oil production and consumption across the region.
BMI 10-Year Industry Forecast
Historic data series and 10-year forecasts to end- for all key industry indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:
Oil reserves (bn barrels), production, consumption, refinery capacity and throughputs (000 b/d)
Oil exports (000 b/d), value of oil exports (US$mn - BMI base case) - Oil price (US$/bbl, OPEC basket)
Value of oil exports at constant US$30/bbl and constant US$60/bbl (US$mn)
Proven gas reserves (tcm), production and consumption (bcm)
Gas exports/(imports) (bcm)
Value of gas exports/(imports) (US$mn); value of gas exports/(imports) at constant US$30/bbl and US$60/bbl (US$mn)
Value of petroleum exports (US$mn); value of petroleum exports at constant US$30/bbl and US$60/bbl (US$mn)
BMI 10-Year Macroeconomic Forecast
BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.
Competitive Landscape & Rankings
Comparative company analyses and rankings by US$ sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, oil production (‘000 b/d) and % market share, downstream capacity (‘000 b/d) and % market share.
Company Profiles & SWOTS
Company profiles, including SWOT analyses, senior executives and full contact details, business activity, products and services, foreign direct investments and projects. Executive Summary
The latest Azerbaijan Oil & Gas Report from BMI forecasts that the country will account for 2.33% of the Central and Eastern European (CEE) regional oil demand by 2013, while providing 8.69% of supply. CEE regional oil use of 4.65mn barrels per day (b/d) in 2001 rose to 5.27mn b/d in 2007. It should average 5.36mn b/d in 2008 and then rise to around 5.99mn b/d by 2013. Regional production of 12.92mn b/d in 2007 is forecast to reach 14.96mn b/d by 2013. In terms of natural gas, the region in 2007 consumed 619bn cubic metres (bcm), with demand of 753bcm targeted for 2013, representing 21.61% growth. Production of 756bcm in 2007 should reach 913bcm in 2013, which implies net exports rising from 137bcm in 2007 to 161bcm by the end of the period. Azerbaijan's share of gas consumption in 2007 was 1.34%, while its share of production was 1.36%. By 2013, its share of gas consumption is forecast to be 1.95%, with the country accounting for 2.41% of supply.
In Q308, we estimate that the OPEC basket price averaged US$113.60 per barrel – down around 3.4% from the Q208 level. The OPEC basket price averaged US$112.41 in August and US$97.16/bbl in September. In October, we are assuming an average of around US$113.30. The estimated Q308 average prices for the main marker blends are now US$115.67 for Brent, US$117.22 for WTI and US$113.43/bbl for Russian Urals (Mediterranean delivery). Our projections for 2008 as a whole are unchanged from the last oil market report. We are still assuming an OPEC basket price average of US$110 per barrel for 2008. Based on recent price differentials, this implies Brent at US$113.33, WTI averaging US$114.58/bbl, and Urals at US$110.36/bbl. Our central view is that the OPEC basket price will fall from US$110/bbl in 2008 to US$96/bbl in 2009, before settling around US$90/bbl in 2010 onwards.
In terms of our refined products forecasts, the BMI composite (Rotterdam, Singapore and New York) global indicator price for unleaded gasoline is expected to average approximately US$117.50/bbl during 2008. Our jet forecast for 2008 is just under US$141/bbl, up from US$89/bbl in 2007. The 60% annual increase represents the second biggest for the key refined products. With gasoil, BMI is assuming a similar gain in 2008, to an average US$137/bbl. Naphtha is expected to exhibit more modest growth, rising from US$75 to US$106/bbl (+41%). During 2009, we are expecting products prices to follow the underlying crude trend lower, but to prove more resilient than the feedstock – implying a recovery in refining margins. Gasoline in 2009 is estimated at US$103/bbl, with jet falling to US$127/bbl. Gasoil is expected to average US$122/bbl, with naphtha slipping to US$91/bbl.
Azeri real GDP growth is now estimated by BMI at 15.9% for 2008, following 25.0% in 2007. We are assuming 12.8% growth in 2009, 9.6% in 2010, followed by 8.0% in 2011, 6.0% in 2012 and 6.5% in 2013. Domestic oil consumption, having tumbled since the 1990s, should now have resumed a growth tack, estimated at an average 7% per annum. By 2013, the country could be using 140,000b/d of oil. The main government vehicle Socar currently accounts for almost half of domestic oil production but, in partnership with international oil companies (IOCs), should raise national output from 868,000b/d in 2007 to 1.30mn b/d by 2011-2013. Gas output should increase from 10.3bcm to 22.0bcm during the forecast period.
Between 2007 and 2018, we are forecasting an increase in Azeri oil and gas liquids production of 26.7%, with volumes reaching a plateau of 1.3mn b/d in 2011-2014, before falling to 1.1mn b/d by the end of the 10-year forecast period. Oil consumption between 2007 and 2018 is set to increase by 110.5%, with growth slowing to an assumed 7.0% per annum towards the end of the period and the country using 196,000b/d by 2018. Gas production should rise from the 2007 level of 10.3bcm to 30bcm by 2018, providing export potential increasing to 11.2bcm. Details of the new BMI 10-year forecasts can be found in the appendix to this report, which provides global, regional and country-specific projections.
Azerbaijan this quarter occupies second place in BMI’s updated Upstream Business Environment rating, slipping behind neighbour Kazakhstan. Its oil and gas production growth outlook, asset immaturity, high reserves-to-production ratios (RPR) and competitive landscape work in the country’s favour, but are undermined by a relatively unappealing risk environment. The country is above the mid-point of the league table in BMI’s Downstream Business Environment rating, with some high scores but progress further up the rankings somewhat unlikely. The low level of retail site intensity represents a strong suit, along with region-leading oil demand growth prospects. Kazakhstan is just behind it in the regional rankings, and there is some long-term chance of the rival Caspian state challenging for Azerbaijan’s fifth place.