Abstract
The latest Brazil Oil & Gas Report from BMI forecasts that the country will
account for 32.30% of Latin
American regional oil demand by 2013, while
providing 27.41% 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 the end of the period. Brazil' s
share of gas consumption in 2008
was an estimated 12.26%, while its share of production was 6.03%. By
2013,
its share of gas consumption is forecast to be 11.94%, with the country
accounting for 8.62% of
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 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.
Brazilian real GDP is now forecast by BMI to decline by 0.6% in
2009, following growth of 5.1% in
2008. We are assuming 2.0% growth in
2010, 2.9% in 2011, followed by 3.4% in 2012 and 3.7% in 2013.
Partly-privatised deepwater specialist Petrobras will continue to partner
international oil companies
(IOCs) in supporting output growth efforts,
while dominating domestic production. We are assuming oil
and gas liquids
production of at least 2.90mn b/d by 2013, with the country expected to pump
2.15mn b/d
in 2009. Beyond the expected weakness of 2009, consumption is
forecast to increase by 3.0-3.5% per
annum to 2013, implying demand of
2.66mn b/d by the end of the forecast period. The export capability
would
therefore be approximately 0.58mn b/d by 2013. Gas production is forecast to
increase from an
estimated 12.5bcm in 2008 to 25.0bcm over the period to
2013, with consumption climbing from
23.4bcm to 30.4bcm.
Between 2008
and 2018, we are forecasting an increase in Brazilian oil production of
119.4%, with crude
volumes rising steadily to 4.3mn b/d by 2018. Oil
consumption between 2008 and 2018 is set to increase
by 30.6%, with growth
slowing to an assumed 2% per annum towards the end of the period and the
country using 3.01mn b/d by 2018. Gas production is expected to rise
gradually, from an estimated
12.5bcm in 2008 to 35.0bcm by 2018. With
demand growth of 57.5%, this provides a net import
requirement falling
from an estimated 10.9bcm to 1.9bcm during the 10-year period. Details of
BMI’s
10-year forecasts can be found in the appendix to this
report.
Brazil this quarter retains outright first place in BMI’s
updated Upstream Business Environment rating,
ahead of Peru and Venezuela,
thanks to the size of the oil resource base, output growth prospects,
attractive licensing regime and competitive environment. While some weak
points exist in terms of the
country’s risk ratings and only
mid-table reserves-to-production ratios (RPR), its position at the head of
the regional league table continues to look unassailable. The country still
tops the league table in BMI’s
updated Downstream Business
Environment rating, reflecting its region-beating oil demand, substantial
refining capacity and competitive environment. Colombia ranks second, and is
just two points behind the
regional leader. We still see no obvious threat
to Brazil over the medium term.
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