Countries covered: Greece
The latest Greece Oil & Gas Report from BMI forecasts that the country will account for 3.40% ofDeveloped European regional oil demand by 2013, while making no appreciable contribution to supply.In Developed Europe, overall oil consumption reached 13.62mn barrels per day (b/d) in 2008. It is set toease to around 13.60mn b/d by 2013. Developed Europe regional oil production was 6.97mn b/d in 2001,and in 2008 averaged 4.90mn b/d. It is set to fall to just 3.77mn b/d by 2013. Oil imports are growingsteadily, because supply is contracting and demand is rising, albeit slowly. In 2008, net crude importswere 8.72mn b/d. By 2013, they are expected to have reached 9.84mn b/d. Norway will remain the onlymajor net exporter, with the UK becoming a net importer.
As regards natural gas, the Developed Europe region in 2008 consumed 445bn cubic metres (bcm), withdemand of 478bcm targeted for 2013, representing 7.3% growth. Production of 269bcm in 2008 shouldrise to 278bcm in 2013, which implies net imports rising from the 2008 level of 176bcm to some 267bcmby the end of the period. The Greek share of gas consumption in 2008 was 0.94%, while it makes nomeaningful contribution to production. By 2013, its share of gas consumption is forecast to be 1.14%.
For 2009 as a whole, we are now assuming an average OPEC basket price of US$55.00 per barrel (bbl), a41.5% decline year-on-year (y-o-y). This represents an upgrade from the US$52 forecast we have stuckwith during the past three quarters. Our OPEC basket assumption delivers likely Brent, WTI, Urals andDubai prices of US$56.30, US$57.50, US$55.60 and US$55.60/bbl respectively. For 2010, we expect tosee a recovery to US$60.00/bbl for the OPEC price (up from our previous forecast of US$58), gainingfurther ground to US$65.00 in 2011 and to US$70.00/bbl in 2012. Our post-2010 forecasts are unchangedand we are continuing to use a long-term price assumption of US$70.00 for 2013-2018.
In 2009, BMI is now assuming a global average gasoline price of US$62.12/bbl, with the fuel havingpeaked in June. The overall y-o-y fall in 2009 gasoline prices is put at 40.0%. The BMI gasoil forecast isfor an average price of US$68.62/bbl, assuming a monthly high of US$92.49/bbl in December. The fullyearoutturn represents a 43.4% fall from the 2008 level. The annual jet price level for 2009 is forecast tobe US$65.17/bbl. This compares with US$124.95/bbl in 2008. The 2009 average naphtha price is put byBMI at US$49.06/bbl, down 43.9% from the previous year’s level.
Greek real GDP growth was forecast by BMI to fall by 3.5% in 2009 at the time of writing this report,compared with growth of 2.9% in 2008, with an assumption for average 0.70% growth in 2009-2013 (themacroeconomic forecasts have since been revised upwards - see the Macroeconomic Outlook). Whilethere is still some limited scope for medium- to long-term growth in domestic oil production, there isconsiderable uncertainty over the scale and the timing of new field development. Meanwhile, thecountry’s oil consumption is rising relatively fast (beyond 2009 averaging 2.0% per annum) and isexpected to reach 454,000b/d in 2013. By 2013, our estimates suggest gas consumption of at least5.2bcm, all of which will be imported.
Between 2008 and 2018, we are forecasting an increase in Greek oil and gas liquids consumption of13.92%, with volumes rising steadily from 438,000b/d in 2008 to 499,000b/d at the end of the 10-yearforecast period. Production is set to rise from just 1,500b/d to a potential peak of 5,000b/d in 2011/12,before easing to 3,000b/d by 2017/2018. Gas demand should rise from the 2008 level of 4.2bcm to7.0bcm by 2018, relying on pipeline and LNG imports. Details of BMI’s 10-year forecasts can be foundin the appendix to this report.
According to BMI’s Country Risk team, Greece’s long-term political risk score is 82.3, compared withthe Developed Markets average of 87.5 and the global average of 63.6. Our long-term economic rating forthe country is 61.5, below the Developed Markets average of 70.0 and above the global average of 53.7.Greece has a partly privatised energy sector operating under EU guidelines. There is a small upstream oiland gas segment, featuring participation by domestic companies and foreign exploration companies.
Downstream oil is dominated by partly state-owned Hellenic Petroleum (HP), but also featuresinternational oil company (IOC) involvement. The gas and power sectors are still heavily stateinfluenced.
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