Analyst sees continued growth in Kuwaiti oil, gas production

Kuwait will account for 10.35% of Middle East regional oil supply by 2013, while representing just 2.71% of demand, according to the latest Kuwait Oil & Gas Report from Business Monitor International.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Oct. 19 -- Kuwait will account for 10.35% of Middle East regional oil supply by 2013, while representing just 2.71% of demand, according to the latest Kuwait Oil & Gas Report from Business Monitor International.

BMI said Middle Eastern regional oil production was 22.87 million b/d in 2001 and in 2008 averaged 26.29 million b/d. It is set to rise to 28.01 million b/d by 2013.

It said regional oil demand of 8.24 million barrels per day (b/d) in 2001 rose to 11.25 million b/d in 2008, and should average 11.30 million b/d in 2009 before rising to 12.17 million b/d by 2013. “Oil exports are growing steadily, because demand growth is lagging the pace of supply expansion,” the analyst said.

In 2001, the region was exporting an average 14.63 million b/d. This rose to 15.04 million b/d in 2008 and is forecast to reach 15.84 million b/d by 2013. BMI says Iraq has the greatest production growth potential, followed by Qatar.

In terms of natural gas, the Middle Eastern region in 2008 consumed 391.5 billion cu m, with demand of 512.8 bcm targeted for 2013, representing 31.0% growth.

“Production of 389.5 bcm in 2008 should grow by 56.7% to reach 610.4 bcm in 2013, implying that net export will rise to 98 bcm by the end of the period,” according to BMI.

Kuwait in 2008 consumed 3.27% of the region's gas, with its market share forecast at 4.93% by 2013. It contributed 3.29% to 2008 regional gas production and by 2013 will account for 3.16% of supply.

Kuwaiti real GDP is now forecast by BMI to fall by 1% in 2009, following growth of 6.3% in 2008. “We are assuming 2.1% growth in 2010, 2.5% in 2011, followed by 3.4% in 2012 and 3.7% in 2013,” the analyst said. “We expect oil demand to rise from 300,000 b/d in 2008 to 330,000 b/d in 2013, lagging the underlying rate of economic expansion.”

State-owned Kuwait Petroleum Corp. is responsible for all domestic oil and gas operations. In spite of the absence of near-term international oil company investment, crude production is forecast to increase from 2.78 million b/d in 2008 to 2.90 million b/d in 2013, subject to the Organization of Petroleum Exporting Countries’ quotas.

Gas production should reach 19.3 bcm by 2013, up from 12.8 bcm in 2008, while consumption is expected to rise to 25.3 bcm from 12.8 bcm by the end of the forecast period, requiring imports of 6 bcm.

“Between 2008 and 2018, we are forecasting an increase in Kuwaiti oil production of 29.3%, with crude volumes rising steadily to 3.60 million b/d by the end of the 10-year forecast period,” BMI said.

Oil consumption between 2008 and 2018 is set to increase by 29.2%, with growth slowing to an assumed 3.0% per annum towards the end of the period and the country using 388,000 b/d by 2018.

Gas production is expected to climb to almost 27 bcm by the end of the period. With 2008-2018 demand growth of 204%, this provides an import requirement rising to more than 12 bcm by 2018.

Contact Eric Watkins at hippalus@yahoo.com.

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