BMI sees 30.3% rise in Sudanese production in 2007-18

Analyst BMI said Sudan will see a 30.3% rise in oil and gas liquids production in 2007-18, with volumes peaking at 700,000 b/d in 2010.

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Jan. 25 -- Analyst BMI said Sudan will see a 30.3% rise in oil and gas liquids production in 2007-18, with volumes peaking at 700,000 b/d in 2010, before falling steadily to 596,000 b/d by the end of the 10-year forecast period.

In its latest Sudan Oil and Gas Report, BMI said Sudan's oil consumption in 2007-18 is set to increase by 71%, with growth slowing to an assumed 5%/year towards the end of the period and the country using 161,000 b/d by 2018.

By 2013, BMI forecasts that Sudan will account for about 3% of African regional oil demand, while providing about 5% of supply.

African regional oil use of 2.98 million b/d in 2001 rose to 3.57 million b/d in 2007 and should average 3.65 million b/d in 2008 before rising to around 4.17 million b/d by 2013.

Regional oil production was 7.84 million b/d in 2001, and in 2007 averaged 10.31 million b/d. It is set to rise to 12.96 million b/d by 2013.

In terms of natural gas, the African region consumed 100 billion cu m (bcm) in 2007, with demand of 183 bcm targeted for 2013, representing 83.3% growth.

Production of 193 bcm in 2007 should rise by 85.2% to reach 358 bcm in 2013, which implies net exports rising to 175 bcm by the end of the period from 94 bcm in 2007. Sudan is neither a consumer nor producer of gas.

In third quarter 2008, BMI estimates that the OPEC basket price averaged $113.60/bbl, down 3.4% from second quarter 2008.

The OPEC basket price averaged $112.41/bbl in August and $97.16/bbl in September. In October, BMI is assuming an average of $113.30/bbl.

The estimated third quarter 2008 average prices for the main marker blends are $115.67/bbl for Brent, $117.22/bbl for West Texas Intermediate, and $113.43/bbl for Russian Urals (Mediterranean delivery).

BMI's projections for 2008 as a whole are unchanged from the last oil market report. The analyst is still assuming an OPEC basket price average of $110/bbl for 2008.

Based on recent price differentials, this implies Brent at US$113.33/bbl, WTI averaging $114.58/bbl, and Urals at US$110.36/bbl.

BMI's central view is that the OPEC basket price will fall to $96/bbl in 2009 from $110/bbl in 2008, before settling to $90/bbl in 2010 onwards.

In terms of its refined products forecasts, the BMI composite (Rotterdam, Singapore and New York) global indicator price for unleaded gasoline is expected to average $117.50/bbl during 2008.

BMI's jet fuel forecast for 2008 is just shy of $141/bbl, up from $89/bbl in 2007.

The 60% annual increase represents the second biggest for the key refined products.

With gas oil, BMI is assuming a similar gain in 2008, to an average $137/bbl.

Naphtha is expected to exhibit more modest growth, rising 41% to $106/bbl from $75/bbl.

During 2009, BMI is expecting products prices to follow the underlying crude trend lower, but to prove more resilient than the feedstock—implying a recovery in refining margins.

Gasoline in 2009 is estimated at $103/bbl, with jet falling to $127/bbl. Gasoil is expected to average $122/bbl, with naphtha slipping to $91/bbl.

Sudanese real gross domestic product growth is now forecast by BMI at 12.7% for 2008, up from 10.2% in 2007. It is assuming 7.9% growth in 2009, 6.5% in 2010, followed by 5.6% in 2011-13.

BMI expects Sudanese oil demand to rise to 126,000 b/d in 2013 from 94,000 b/d in 2007.

State oil firm Sudapet is active in the country's oil exploration and production sector, working in partnership with Chinese and other foreign companies in raising oil output from 457,000 b/d in 2007 to a forecast 700,000 b/d by 2010.

Sudan currently has no plans for significant production or consumption of natural gas.

Contact Eric Watkins at hippalus@yahoo.com.

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