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Colombia Oil and Gas Report Q3 2011

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Table of Contents

Management Report
Published: July 2011
Pages: 121
Tables: For full details, please email keithw@cmsinfo.com
From: GBP 330.00  Buy Now!
Research from: Business Monitor International
Sector: Oil & Gas

The Colombia Oil and Gas Report has been researched at source and features Business Monitor International (BMI)'s independent forecasts to end-2015 for Colombia including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, multinational and national companies, and changes in the regulatory environment.

BMI's Colombia Oil and Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Colombian oil and gas industry.

The latest Colombia Oil & Gas Report from BMI forecasts that the country will account for 3.41% of Latin American regional oil demand by 2015, while providing 9.78% of supply. Latin American regional use averaged an estimated 8.41mn barrels per day (b/d) in 2010. It should rise to 8.63mn b/d in 2011 and reach 9.30mn b/d by 2015. Regional oil production in 2010 averaged an estimated 9.92mn b/d. It is set to rise to 12.47mn b/d by 2015. Oil exports have been slipping, because demand growth has exceeded the pace of supply expansion. In 2001, the region was exporting an average of 3.24mn b/d. This total fell to an estimated 1.52mn b/d in 2010 and is forecast to rebound to 3.05mn b/d in 2015. The principal exporters will be Mexico, Venezuela, Colombia and Brazil.

In terms of natural gas, the region in 2010 consumed an estimated 189.5bn cubic metres (bcm), with demand of 230.8bcm targeted for 2015. Production of an estimated 203bcm in 2010 should reach 254bcm in 2015, and implies more than 20bcm of net exports at the end of the period. Colombia’s estimated share of gas consumption in 2010 was 4.28%, while its share of production is put at 5.42%. By 2015, its share of gas consumption is forecast to be 4.54%, with the country accounting for 4.73% of supply.

The 2010 full-year outturn was US$77.45 per barrel (bbl) for OPEC crude, which delivered an average for North Sea Brent of US$80.34/bbl and for West Texas Intermediate (WTI) of US$79.61/bbl. The BMI price target of US$77 was reached thanks to the early onset of particularly cold weather, which drove up demand for and the price of heating oil during the closing weeks of the year.

Global GDP growth in 2011 is forecast at 3.6%, down from 4.3% in 2010. Growth in both the US and eurozone should be marginally higher than 2010, while Chinese economic expansion will slow and Japan’s growth will slump to 0.7% as a result of the devastating earthquake and tsunami in March 2011. BMI calculates that Colombian real GDP rose by 4.3% in 2010 and we are assuming an average annual increase of 4.6% in 2010-2015.

The government is working successfully to encourage international oil company (IOC) investment and boost near-term domestic oil production, aided by state-owned Ecopetrol. These efforts have been proving highly effective and we are now assuming oil and gas liquids production of 1.22mn b/d by 2015, with the country expected to pump 912,000b/d in 2011.

Between 2010 and 2020, we forecast an increase in Colombian oil production of 73%, with crude volumes peaking at 1.46mn b/d in 2018 before declining to 1.37mn b/d by 2020. Oil consumption between 2010 and 2020 is set to increase by 26.8%, with the country using 359,000b/d by 2020. Gas production is expected to rise gradually, from an estimated 11bcm in 2010 to 15bcm in 2018-2020. With demand growth of 47%, this implies peak export potential of 3.62bcm by 2018. Details of BMI’s 10-year forecasts can be found in the appendix to this report.

Colombia holds second place, behind only Brazil, in BMI’s composite Business Environment Ratings (BERs), which combine upstream and downstream scores. It ranks fourth, behind Venezuela, in BMI’s updated upstream BERs, well ahead of Trinidad & Tobago in fifth. Although the absolute resource base is currently modest, the competitive environment is attractive and licensing terms have improved to become some of the best in the region. Country risk is moderate, and Colombia is well placed to retain its strong position in the league table. Colombia holds second place, ahead of Argentina and behind only Brazil, in BMI’s downstream BERs, reflecting its oil demand growth outlook, refining capacity expansion plans, moderate country risk and low retail site intensity. Argentina is two points behind in the regional rankings but lacks the near-term potential to challenge Colombia.

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