United Arab Emirates Oil and Gas Industry Update Quarter 4 2011

  • January 2014
  • -
  • Business Monitor International
  • -
  • 127 pages

BMI assumes that UAE real Gross Domestic Product rose by 1.4%% in 2010, and we expect average annual growth of 3.35% in from 2010 to 2015 . We expect oil demand to rise from an estimated 682,000b/d in 2010 to 771,000b/d in 2015, lagging our underlying economic hypothesis s. State-owned Abu Dhabi National Oil Firms (ADNOC) is the biggest national oil firm, working in partnership with major international oil industry players (IOCs) to deliver 2.85mn b/d of oil and liquids production in 2010, rising to 3.02mn b/d by the end of the projection period – subject to OPEC quota policy. The UAE’s share of Middle Eastern oil production will fall from 11.53% in 2010 to 10.09% in 2015, while its share of oil consumption is set to fall slightly from 7.28% to 7.06% in the same period.
Gas production should reach 62bcm by 2015, up from 51bcm in 2010. Consumption is expected to rise from 61bcm in 2010 to 77bcm by the end of the projection period, requiring net imports of around 15.8bcm. The UAE’s estimated share of Middle Eastern gas consumption in 2010 will have been 17.87%, while its share of production is put at 10.63%. In 20 15, its share of gas consumption is projection to be 18.4%, with the country accounting for 10.2% of supply.
The 2010 full-year outturn was US Dollar 77.45/bbl for OPEC crude, which delivered an average for North Sea Brent of US Dollar 80.34/bbl and for West Texas Intermediate (WTI) of US Dollar 79.61/bbl. The BMI price target of US Dollar 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.
In light of the unrest in the Middle East and North Africa (MENA) region in H111, as well as the oil supply effects of the Libyan civil war, we have raised our benchmark OPEC Basket price projection from US Dollar 80 to US Dollar 101.90/bbl for 2011 and from US Dollar 85 to US Dollar 97.50/bbl for 2012. We expect Brent to average US Dollar 106.00/bbl in 2011 and US Dollar 101.50/bbl in 2012. We have kept our long-term (2014-20) price hypothesis of US Dollar 90/bbl (OPEC Basket) in place.
The UAE now holds second place, below Israel and above Qatar, in BMI’s composite Business Environment ratings table, which combines upstream and downstream scores. The UAE holds second place, behind Qatar, in BMI’s updated upstream ratings, thanks largely to its significant oil and gas resource base, investor-friendly climate, non-state competition, established licensing framework and generally encouraging country risk factors. The UAE is second in BMI’s downstream ratings, with high points for the size of its domestic industry and nominal Gross Domestic Product .

Table Of Contents

Executive Summary .... 7
Industry SWOT Analysis 8
United Arab Emirates Political Environment and Risk Analysis ..... 8
United Arab Emirates Economic Environment and Risk Analysis ... 9
United Arab Emirates Business Environment SWOT 10
UAE Energy Industry Overview ..... 11
Regional Energy Industry Overview ... 13
Oil Supply And Demand . 13
Data : Middle East Oil Consumption (000b/d) ... 14
Data : Middle East Oil Production (000b/d) 15
Oil: Downstream ..... 16
Data : Middle East Oil Refining Capacity (000b/d) .. 16
Gas Supply And Demand ..... 17
Data : Middle East Gas Consumption (bcm) 17
Data : Middle East Gas Production (bcm) ... 18
Liquefied Natural Gas .... 19
Data : Middle East Net LNG Exports (bcm) . 19

Environment Overview Ratings .. 20
Middle East Region .. 20
Composite Scores ..... 20
Data : Regional Composite Business Environment Rating ... 20
Upstream Scores 21
Data : Regional Upstream Business Environment Rating..... 21
Downstream Scores . 22
Data : Regional Downstream Business Environment Rating . 22

Environment Overview ... 23
Legal Framework ..... 23
Infrastructure ..... 25
Labour Force ..... 26
Foreign Investment Policy ... 27
Tax Regime .. 28
Security Risk 28

Market Projection Scenario ... 30
Oil And Gas Reserves .... 30
Oil Supply And Demand . 30
Gas Supply And Demand ..... 31
LNG . 32
Refining And Oil Products Trade ..... 33
Revenues/Import Costs... 33
Data : UAE Oil And Gas - Historical Data And Projections .. 35
Other Energy ..... 37
Data : UAE Other Energy - Historical Data And Projections . 38
Key Risks To BMI’s Projection Scenario .. 39
Long-Term Oil And Gas Outlook ..... 39
Oil And Gas Infrastructure .... 40
Oil Refineries ..... 40
Data : Refineries In The UAE ..... 40
Ruwais Refinery (Active) . 40
Fujairah Refinery (Active) .... 40
Abu Dhabi Refinery (Active) . 41
Ruwais Refinery (Planned) ... 41
Quality Energy Refinery (Proposed) . 41
Fujairah Refinery (Proposed) ..... 41
Oil Pipelines . 42
Gas Storage Facilities .... 42
LNG .. 42
Das Island LNG (Active) . 43
Golar Freeze FLNG Vessel (Active) . 43
Data : LNG Export Terminals in the UAE .... 43
Gas Pipelines 43

Macroeconomic Data . 44
United Arab Emirates - Economic Activity ... 45

Competition Overview .. 46
Data : Key Domestic And Foreign Firms In The UAE’s Oil And Gas Segment .... 47
Overview/State Role . 47
Licensing And Regulation ..... 47
Government Policy ... 48
International Energy Relations ... 49
Data : Key Upstream Players ..... 50
Data : Key Downstream Players 50
Company Monitor 51
Abu Dhabi National Oil Firms (ADNOC) .... 51
Dolphin Energy .. 56
Emirates General Petroleum Corporation (Emarat) 59
Emirates National Oil Firms (ENOC) .... 61
ExxonMobil .. 64
BP - Summary .... 67
Rosneft - Summary ... 67
Total - Summary . 67
ConocoPhillips - Summary ... 68
Royal Dutch Shell - Summary .... 68
Korea National Oil Corporation - Summary 69
Dana Gas - Summary ..... 70
Occidental Petroleum - Summary..... 71
Japan Oil Development Firms (JODCO) - Summary ..... 71
Cosmo Oil - Summary .... 71
Abu Dhabi National Energy Firms (TAQA) - Summary.. 71
CNPC - Summary ..... 72
RAK Petroleum - Summary .. 72
Oil And Gas Outlook: Long-Term Projections ..... 73
Regional Oil Demand .... 73
Data : Middle East Oil Consumption (000b/d) ... 73
Regional Oil Supply . 74
Data : Middle East Oil Production (000b/d) 74
Regional Refining Capacity . 75
Data : Middle East Oil Refining Capacity (000b/d) .. 75
Regional Gas Demand ... 76
Data : Middle East Gas Consumption (bcm) 76
Regional Gas Supply 77
Data : Middle East Gas Production (bcm) ... 77
UAE Country Overview . 77
Methodology And Risks to Projections ..... 78
Glossary Of Terms .... 79
Oil And Gas Ratings: Revised Methodology ..... 80
Introduction . 80
Ratings Overview ..... 80
Data : BMI Oil And Gas Business Environment Ratings: Structure .. 81
Indicators ..... 82
Data : BMI Oil And Gas Business Environment Upstream Ratings: Methodology .... 82
Data : BMI Oil And Gas Business Environment Downstream Ratings: Methodology ..... 83
BMI Methodology 85
How We Generate Our Market Projections .. 85
Energy Market . 86
Cross checks 86
Sources .. 86

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