Abstract
The latest Venezuela Oil & Gas Report forecasts that the country will account
for 8.13% of Latin
America regional oil demand by 2013, while providing
26.46% of supply. Latin America regional oil use
of 6.66mn barrels per day
(b/d) in 2001 reached an estimated 7.61mn b/d in 2008. It should average
7.57mn b/d in 2009 and then rise to around 8.23mn b/d by 2013. Regional oil
production was just under
10.40mn b/d in 2001, and in 2008 averaged an
estimated 9.89mn b/d. It is set to rise to 10.58mn b/d by
2013. Oil
exports are slipping, because demand growth is exceeding the pace of supply
expansion. In
2001, the region was exporting an average 3.73mn b/d. This
total had fallen to an estimated 2.28mn b/d in
2008 and is forecast to be
2.35mn b/d in 2013. The principal exporters will be Mexico, Venezuela,
Ecuador and Brazil.
As regards natural gas, the region in 2008 consumed an
estimated 191.3bn cubic metres (bcm), with
demand of 254.3bcm targeted for
2013, representing 32.9% growth. Estimated production of 207.4bcm in
2008
should reach 289.9bcm in 2013, and implies 35.7bcm of net exports by the end
of the period.
Venezuela contributed an estimated 15.95% to 2008 regional
gas consumption, while producing 14.70%.
By 2013, it is expected to
consume 19.41% of the region’s gas, while contributing 18.97% to
supply.
In terms of the OPEC basket of crudes, the average price in Q109
was an estimated US$45.78 per barrel
(bbl), down 13% from the US$52.51/bbl
recorded during the previous three months. During the second
quarter,
there has been little change to our view of oil market developments. BMI is
forecasting an
average OPEC basket price of US$51.30/bbl, with the March
gains being retained in April, before further
recovery to a possible
US$57.00/bbl is seen by June. For 2009, we are still assuming an average
OPEC
basket price of US$52.00/bbl (-45% year-on-year). The BMI full year
forecast implies Brent crude at
US$53.73/bbl, WTI averaging US$54.90/bbl
and Urals at US$52.66/bbl for 2009.
For the whole of 2009, the BMI
assumption for gasoline is an average US$56.89/bbl, with the price
peaking
at a forecast monthly average of US$64.75/bbl in December 2009. The overall
y-o-y fall in 2009
gasoline prices is put at 44.1%. For gasoil in 2009,
the BMI forecast is for an average price of
US$69.35/bbl, assuming a
monthly high of US$94.48/bbl in December. The full-year outturn represents
a
42.8% fall from the 2008 level. The monthly average jet fuel price is
forecast to range from US$53.75/bbl
in February to US$96.76/bbl in
December, proving an annual level of US$71.78/bbl. This compares with
US$124.95/bbl in 2008.
Venezuela’s real GDP is forecast to contract
by 5.6% in 2009, following growth of 4.8% in 2008. We are
now assuming a
1.7% contraction in 2010, with growth of 3.4% in 2011, followed by 2.8% in
2012 and
2.6% in 2013. State-owned Petróleos de Venezuela (PdVSA)
works in co-operation with numerous
international oil company (IOC)
partners in conventional and heavy oil projects. While recent
renationalisation
moves, changes in taxation and alterations to the
licensing system have reduced foreign
involvement, several key players
appear committed to the country. We are assuming oil and gas liquids
production of 2.80mn b/d by 2013, with the country expected to pump 2.35mn b/d
in 2009. Consumption
beyond the economic weakness of 2009/10 is forecast
to increase by around 3% per annum to 2013,
implying demand of 669,000b/d
by this point. The export capability would thus be about 2.13mn b/d by
2013. Gas production is forecast to rise from an estimated 30.5bcm in 2008 to
55.0bcm over the period,
allowing 5.7bcm of exports by 2013.
Between
2008 and 2018, we are forecasting an increase in Venezuelan oil production of
20.6%, with
liquids volumes dipping to 2.35mn b/d in 2009 before rising
steadily to 3.10mn b/d by 2018. Oil
consumption between 2008 and 2018 is
set to increase by 27.5%, with growth slowing to an assumed
3.0% per annum
towards the end of the period and the country using 775,000b/d by 2018. Gas
production
is expected to rise steadily, from around 30.5bcm in 2008 to
78.0bcm in 2018. With demand growth of
106.5%, this implies export
potential rising to 15.0bcm by 2018. Details of BMI’s 10-year forecasts
can
be found in the appendix to this report.
Venezuela now ranks third
behind Peru in BMI’s updated Upstream Business Environment rating,
having
lost further ground in spite of its vast hydrocarbons resource
base. While only a point behind Peru, it is
unlikely to overtake the
country then challenge Brazil for the outright regional lead unless the
overall risk
situation improves dramatically. As well as high scores for
reserves, production growth potential and
reserves-to-production ratios
(RPR), Venezuela benefits from the substantial (but decreasing) number of
international companies active within its upstream industry. The country now
ranks eighth behind Mexico
in BMI’s updated Downstream Business
Environment rating, reflecting its refining capacity, retail site
intensity and growth in GDP per capita. Mexico above is within easy reach,
while Ecuador behind is
unlikely to mount a challenge.
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