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The UK Oil & Gas Report has been researched at source in 2007, and features latest
available data and forecasts for UK to end-2011 covering headline indicators for
oil & gas, LNG, coal and power; company rankings and competitive landscapes
covering oil & gas exploration and production in UK, refining, oil & gas
distribution and fuels retailing; and analysis of latest industry developments,
trends and regulatory issues within UK.
Executive Summary
Summary of It’s key forecasts and industry analysis, covering oil and gas
reserves, supply, demand, refining, coal and power, and primary energy, plus
analysis of landmark company developments and key changes in the regulatory
environment.
Regional Overview
Regional perspective on size and value of industry sector; comparative rankings by
production, refining, imports and exports; overview of industry landscape and key
players; assessment of business operating environment and latest regulatory
developments.
It forecasts for all headline macroeconomic indicators, including real GDP growth,
inflation, fiscal balance, trade balance, current account and external debt.
The latest UK Oil & Gas Report forecasts that the country will account for 12.46%
of developed European regional oil demand by 2011, while contributing 30.00% to
supply. In Developed Europe, overall oil consumption reached an estimated 14.23mn
barrels per day (b/d) in 2006. It is set to rise to around 14.65mn b/d by 2011. In
terms of natural gas, the Developed Europe region last year consumed an estimated
451bn cubic metres (bcm), with demand of 535bcm targeted for 2011, representing
18.7% growth. Production of an estimated 286bcm in 2006 should fall to 268bcm in
2011, which implies net imports rising from last year's estimated 165bcm to some
268bcm by the end of the period. The UK's share of gas consumption in 2006 was an
estimated 21.29%, while it contributed 31.82% to production. By 2011, its share of
gas consumption is forecast to be 20.00%, with production accounting for 30.22%.
For the whole of last year, our estimates of average crude oil prices are US$61.10
for the OPEC basket, US$65.10 for Brent, US$66.20 per barrel (/bbl) for WTI and
US$61.30 for Urals. For the first quarter of this year, we have adjusted our
forecasts to reflect the weather-induced volatility. The OPEC basket is now
expected to have averaged US$54.30/bbl, with Brent at US$57.60; WTI averaging
US$58.70 and Urals at US$54.00/bbl. Our projections for 2007 as a whole are barely
changed from the last quarterly report. We are still assuming an OPEC basket price
average of US$55/bbl. Based on last year's typical price differentials, this
implies Brent at US$58.80, WTI averaging US$59.90/bbl, and Urals at US$55.30/bbl.
UK real GDP growth is now forecast by It at 2.3% for 2007, down from 2.6% in 2006.
We are assuming 2.8% growth in 2008, 3.2% in 2009, followed by 3.0% in 2010 and
2.7% in 2011. We are currently forecasting 1.72mn b/d of oil output this year. By
2011, UK oil production is unlikely to be above 1.45mn b/d. Government figures
suggest production as low as 1.38mn b/d by 2009, which seems a little bearish. Oil
consumption is expected to have reached 1.83mn b/d by 2011, providing a net crude
import requirement of at least 375,000b/d.
Our long-term political rating is 82.5, well above the global average of 65.5, but
below the regional average of 85.6, and above only Italy among developed European
countries. Our long-term economic rating is 65.8, which compares with a global
average of 60.9 and a regional average of 72.3, and puts the UK behind all other
developed European peers. Our business environment rating is 55.2, the lowest in
the region. The regional average is 66.3. The UK has a privatised energy sector
operating under EU guidelines. There is a major, but mature and highly competitive
upstream oil and gas segment, featuring most key national and international
companies. The downstream oil segment is also competitive and deregulated.
International and domestic operators control gas distribution and supply, as well
as electricity generation and distribution.