BMI View: T he Czech Republic will remain highly dependent on imported oil and gas, mostly from Russia, as conventional hydrocarbons production potential is limited. A small increase in refinery utilisation rates will result in a modest increase in refined product import needs to answer rising domestic demand over our forecast period.
|e/f = BMI estimate/forecast. Source: EIA, BMI|
|Crude, NGPL & other liquids prod, 000b/d||7.0||7.0||6.8||6.6||6.5||6.3||6.1|
|Dry natural gas production, bcm||0.3||0.2||0.2||0.2||0.2||0.2||0.2|
|Dry natural gas consumption, bcm||8.5||8.5||8.5||8.6||8.6||8.6||8.7|
|Refined products production & ethanol, 000b/d||153.0||160.0||166.4||161.4||161.7||162.1||162.4|
|Refined products consumption & ethanol, 000b/d||195.7||205.3||211.5||214.9||218.4||223.0||227.7|
The main trends and developments we highlight for the Czech Republic's oil and gas sector are:
Plans to freeze shale gas exploration for two years to allow the government to draft and implement new legislation have found plenty of support, meaning that drilling activity is unlikely in the short-to-medium term. We currently do not expect shale gas exploration in the country to go forward within our forecast period.
The Czech Republic produces negligible volumes of domestic gas or oil, with limited upside risk to future production, meaning the country will remain significantly dependent on Russian hydrocarbon imports within our forecast period.
We expect a very slow ramp up in gas consumption from power projects and use in the residential sector. This will slightly accelerate towards the end of our forecast period.
The Czech Republic is a small consumer of refined fuels. Given that the country's electricity generation is overwhelmingly coal and nuclear based, and that our power team forecasts an increase in coal-based power generation over our forecast period, an increase in oil-based power generation in the Czech Republic is unlikely. We forecast a modest average rise in consumption of between 1.5-2% per annum, pulled up by industrial consumption and the rising vehicle fleet
The Czech Republic has a refining capacity of 173,000b/d, with two operating refineries now entirely owned by Unipetrol since Eni and Shell sold their respective stake in the Ceska Rafinerska Consortium in 2014.
Despite remaining heavily dependent on Russian gas throughout our forecast period, the Czech Republic will manage to diversify its gas sources through the STORK II project linking the country to Poland. This will provide it with access to Polish gas and imported LNG from the Swinoujscie LNG terminal.