Abstract
The latest Spain Oil & Gas Report from BMI forecasts that the country will
account for 12.20% of
Developed European regional oil demand by 2013,
while making no appreciable contribution to supply.
In developed Europe,
overall oil consumption reached an estimated 13.75mn barrels per day (b/d)
in
2008. It is set to rise to around 13.88mn b/d by 2013. Developed Europe
regional oil production was
6.97mn b/d in 2001, and in 2008 averaged an
estimated 5.06mn b/d. It is set to fall to just 3.77mn b/d by
2013. Oil
imports are growing steadily, because supply is contracting and demand is
rising, albeit slowly.
In 2008, net crude imports were an estimated 8.70mn
b/d. By 2013, they are expected to have reached
10.11mn b/d. Norway will
remain the only major net exporter, with the UK becoming a net importer.
As regards natural gas, the Developed Europe region in 2008 consumed an
estimated 440bn cubic metres
(bcm), with demand of 490bcm targeted for
2013, representing 11.2% growth. Production of an estimated
269bcm in 2007
should rise to 279bcm in 2013, which implies net imports rising from the
estimated 2008
level of 171bcm to some 211bcm by the end of the period.
Spain’s share of gas consumption in 2008 was
an estimated 8.37%,
while it has no meaningful share of production. By 2013, its share of gas
consumption is forecast to be 10.07%.
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 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,
WTI averaging US$54.90/bbl and Urals at US$52.66 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 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 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.
Spanish real GDP growth is forecast by BMI to fall
by 3.5% in 2009, compared with growth of 1.0% in
2008. We are assuming an
average 0.7% growth in 2009-2013. In terms of oil demand, the Spanish
market continues to grow more rapidly than the EU norm, although there is
likely to be a reduction in
2009 consumption thanks to economic weakness.
Beyond 2009/10, we expect to see 0.5%-1.0% annual
demand growth. Oil
consumption has risen from just over 1mn b/d in 1990 to an estimated 1.62mn
b/d in
2008. Our target for 2013 is demand at an average 1.69mn b/d. No
meaningful local oil supply is
available, with crude imports reaching
1.69mn b/d by 2013. Our gas demand forecast is for an average
annual
growth rate of 6%, taking the 2013 total consumption to 49.3bcm.
Between
2008 and 2018, we are forecasting an increase in Spanish oil and gas liquids
consumption of
12.4%, with volumes rising steadily from an estimated
1.62mn b/d in 2008 to 1.83mn b/d by the end of
the 10-year forecast
period. Gas demand should rise from the estimated 2008 level of 37bcm to 59bcm
by
2018, based on LNG and pipeline imports. Details of BMI’s 10-year
forecasts can be found in the
appendix to this report.
Spain’s
long-term political score is 80.2, according to BMI’s Country Risk team,
which is below the
Developed Markets average of 85.8. Spain ranks
second-lowest of the BMI universe of European
Developed Markets. The
long-term economic rating is 65.2, which compares with a Developed Markets
average of 69.3, putting Spain behind all but Greece in the Developed Europe
universe. Spain has a
privatised energy sector operating under EU
guidelines. There is a very small upstream oil and gas
segment, dominated
by domestic companies. Downstream oil is controlled largely by former
state
company Repsol YPF.
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