2012-10-28 15:15:21 - New Energy market report from Business Monitor International: "Bulgaria Oil & Gas Report Q4 2012"
BMI View: While peace may have broken out between local authorities and key refinery operator Lukoil, clearing the way for renewed downstream investment, Bulgaria's upstream prospects rest on early and significant success at Black Sea drilling operations. It had been thought that shale gas prospects could stimulate long-term supply, but the ban on fraccing means there is little chance of progress, frustrating IOC partners involved in early deals. Meanwhile, energy import dependency creeps steadily higher.
The main trends and developments we highlight for Bulgaria's Oil and Gas sector are:
* On January 18 2012, the Bulgarian Parliament enacted legislation to ban fracture stimulation (fraccing) following widespread protests against the controversial extraction procedure. It then suspended a shale gas exploration permit it
had earlier granted to US-based oil major Chevron, in spite of the country's speculated 1,000bn cubic metres (bcm) of shale gas potential. In June 2012, the government partly lifted the moratorium, but only for conventional gas exploration.
* Bulgarian energy minister Delyan Dobrev announced in July 2012 that French oil major Total has been awarded the highly prospective Khan Asparuh block in the Black Sea. It beat rivals ExxonMobil and Melrose Resources to the offshore block, which preliminary studies show could hold up to 500bcm of gas. Total will partner Spain's Repsol and Austria's OMV to explore the block. Dobrev hopes that Khan Asparuh could yield an even larger discovery than the one made in Romania's Neptun block in the Black Sea earlier in February 2012 by ExxonMobil and Petrom.
* Bulgarian gas consumption is rising well ahead of domestic supply. Although gas output may reach 1.2bcm by 2014/15, net imports by 2016 could reach 2.3bcm, rising further to a possible 3.4bcm by 2021. In November 2009, Bulgaria and Azerbaijan signed a memorandum under which Bulgaria plans to import about 1bcm of natural gas from the Central Asian country from 2014.
* Oil demand growth, already modest before the current economic downturn, will make little progress until GDP growth accelerates, which suggests consumption may reach just 126,000 barrels per day (b/d) by 2016 and 137,000b/d by 2021. Imports are expected to grow in line with consumption, as exploration efforts by small independent oil companies are likely to deliver increased domestic crude volumes.
* A turnkey project-implementation contract was signed in Sofia during January 2012 for a heavyresidue hydrocracking complex to be built at the Lukoil Neftochim Burgas refinery. Implementation will allow it to increase the output of Euro-5 diesel fuel by 1.2mn tonnes per annum (tpa) and also to end production of high-sulphur fuel oil. Commissioning of the new complex is expected in January 2015. Bulgarian units of Lukoil have not abused their dominant market positions, the country's anti-monopoly commission concluded in July 2012 after an investigation lasting almost a year.
Full Report Details at
Bulgaria is set to import 110,000-122,000b/d of crude annually over the next five years, implying costs of around US$4.32bn in 2012, easing slightly to US$4.17bn by 2016. Gas imports of 2.0-2.3bcm per annum during the forecast period mean total petroleum costs will be US$5.21bn by 2016, rising to US$6.01bn by 2021. At the time of writing we assume an OPEC basket oil price for 2012 of US$107.10/bbl, falling to US$99.10/bbl in 2013.
Partial Table of Contents:
- Bulgaria Oil & Gas SWOT
Global Energy Market Outlook
- Oil: Getting Closer To Emerging Markets Inflection Point
- Table: Oil Consumption Forecasts, 2010-2016 ('000b/d)
- Table: Oil Production Forecasts, 2010-2016 ('000b/d)
Regional Energy Market Outlook
Bulgaria Energy Market Overview
Industry Forecast Scenario
- Table: Bulgaria Oil & Gas - Historical Data And Forecasts, 2009-2016
- Table: Bulgaria Oil & Gas - Long-Term Forecasts, 2014-2021
- Oil And Gas Reserves
- Oil Supply And Demand
- Gas Supply And Demand
- Refining and Oil Products Trade
- Revenues/Import Costs
- Key Risks To BMI's Forecast Scenario
Oil & Gas Infrastructure
- Oil Refineries
- Service Stations
- Oil Storage Facilities
- Oil Terminals/Ports
- Oil Pipelines
- LNG Terminals
- Gas Storage Facilities
- Gas Pipelines
Regional and Country Risk/Reward Ratings
- Table: Central And Eastern Europe Risk/Reward Rating
- Table: Upstream Risk/Reward Ratings
- Table: Downstream Risk/Reward Ratings
- Bulgaria Upstream Rating - Overview
- Bulgaria Upstream Rating - Rewards
- Bulgaria Upstream Rating - Risks
- Bulgaria Downstream Rating - Overview
- Executive Summary
- Table: Key Players Bulgarian Oil And Gas Sector
- Overview/State Role
- Licensing And Regulation
- Government Policy
- Licensing Rounds
- International Energy Relations
- Table: Key Upstream Players
- Table: Key Downstream Players
- Lukoil Neftekhim
- Oil & Gas Exploration & Production
- OMV Bulgaria
- Shell Bulgaria
- EKO Bulgaria
- Melrose Resources
- Bulgargaz - Summary
- Total - Summary
- TransAtlantic/Direct Petroleum - Summary
- JKX Oil & Gas/Aurelian Oil & Gas - Summary
- Prista Oil - Summary
- Gazprom - Summary
- Park Place - Summary
Central And Eastern Europe - Regional Appendix
- Table: Oil Consumption - Historical Data & Forecasts, 2009-2016 ('000b/d)
- Table: Oil Consumption - Long-Term Forecasts, 2014-2021 ('000b/d)
- Table: Oil Production - Historical Data & Forecasts, 2009-2016 ('000b/d)
Full Table of Contents is available at:
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