BMI View: Despite limited success in boosting oil and gas production from the Bahrain field, the key development for the country will be the refining capacity expansion at the k ingdom's centrepiece Sitra refinery. However, delays to the expansion will result in a continuation of fuel export declines and a widening of the country's fiscal defic it until 2020. This marks a two- year delay to our previous forecast which saw increasing fuel exports from 2 018 .
|e/f = estimate/forecast. Source: EIA, BMI|
|Crude, NGPL & other liquids prod, 000b/d||61.0||64.1||66.2||68.5||70.3||72.1||74.0|
|Dry natural gas production, bcm||17.2||17.9||18.6||19.3||19.7||20.0||20.4|
|Dry natural gas consumption, bcm||17.2||17.9||18.6||19.3||20.4||21.6||22.7|
|Refined products production, 000b/d||262.0||262.1||262.1||262.2||262.2||262.2||340.8|
|Refined products consumption & ethanol, 000b/d||51.5||54.0||56.7||59.0||61.4||63.8||66.4|
We highlight the following trends and developments in Bahrain's oil and gas sector:
Redevelopment work (new wells, enhanced oil recovery and improved oil recovery) undertaken at the Bahrain field are boosting oil production at the mature field. While we expect some success, the low permeability of the heavy oil reservoirs, among other issues, have led us to anticipate delays. We have not yet included all volumes projected by the project.
In early 2015, the chief executive of Bahrain Petroleum Company (BAPCO) said a plan on whether to proceed with a final investment decision on the refinery expansion would only be presented in 2016. As of March 2016, the company has yet to decide on its expansion. Should it proceed, completion of the refinery would be targeted by 2020. A 2020 completion date is a two-year delay to the original upgrade timeline, which targeted completion by 2018. We have modified our Bahrain forecast to reflect this delay, pushing back a ramp-up in refined fuels production to 2020.
In reaction to the low oil prices and its unsustainable fiscal dynamics, Bahrain has finally increased refined fuel prices late 2015/early 2016, and notably for gasoline prices, a first in the past 33 years. We slightly adjusted out refined fuels consumption forecast in reaction. We expect further such moves can be expected over the coming quarters and years, although changes will be implemented slowly and incrementally.
Indicative of expected gas production growth at the field is the award late 2015 of a contract in Bahrain to supply a new gas processing facility to Petrofac. The new facility with a 5.1bcm capacity is the first of a series of planned gas capacity projects scheduled for the next three to five years.
The Bahrain Oil & Gas Authority (nogaholding) has awarded a build, own, operate and transfer contract for a liquefied natural gas (LNG) import terminal. The project is scheduled for completion by July 2018 and will have the capacity to import up to 8.3bcm per annum. We have adjusted our forecasts to reflect this development. We forecast first LNG in 2018 at 0.8bcm, rising to reach 5.3bcm by the end of our forecast period in 2025.
The addition of LNG imports has also significantly strengthened Bahrain's domestic gas consumption outlook, which was previously restrained by supply. We now forecast gas consumption averaging 4.6% y-o-y for the next 10 years; this compares to our previous forecast of 2.6%, with LNG imports supporting the greater use of gas in industry.
The Bahrain Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Bahrain including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, national and multinational companies and changes in the regulatory environment.
BMI's Bahrain Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Bahraini oil and gas industry.
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Summary of BMI’s key forecasts and industry analysis, covering oil and gas reserves, supply, demand and refining, plus analysis of landmark company developments and key changes in the regulatory environment.
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A profile of the upstream and downstream sectors, including analysis of reserves, output, consumption and trade of energy products; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.
Comparative company analyses by USD sales, % share of total sales, number of employees, year established, ownership structure, oil production (‘000b/d), gas production (bcm), downstream capacity (‘000b/d) and % market share.
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