Italy Oil & Gas Report

Providing expert analysis, independent forecasts and competitive intelligence on the oil and gas industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Oil & Gas Risk Reward Index, Market Summary, Economic Forecasts, Company Profiles, Competitive Landscape and Global and Regional Overview.

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Italy Oil & Gas Report
Product Price
$1,295.00

BMI View: Italy's oil and gas sector will continue to suffer from a gradual depletion of its hydrocarbon reserves and the rapid downsizing of the country's ailing refining sector. While an active exploration scene and a gradually improving regulatory environment are positive signs, we believe these improvements will take some years to garner more substantial industry changes. This is particularly the case in the context of low oil and gas prices over the coming years.

Headline Forecasts (Italy 2014-2020)
2014 2015e 2016f 2017f 2018f 2019f 2020f
e/f = BMI estimate/forecast. Source: EIA, BMI
Crude, NGPL & other liquids prod, 000b/d 122.0 121.8 120.0 117.2 124.5 151.5 157.8
Dry natural gas production, bcm 7.5 7.3 7.1 6.9 6.7 6.5 6.3
Dry natural gas consumption, bcm 61.9 63.1 65.0 65.7 67.4 68.7 69.8
Refined products production, 000b/d 1,355.4 1,423.2 1,309.3 1,256.9 1,256.9 1,258.2 1,256.9
Refined products consumption & ethanol, 000b/d 1,285.5 1,268.0 1,264.3 1,275.6 1,288.7 1,304.3 1,322.6
Brent, USD/bbl 99.50 53.60 42.50 53.00 55.00 60.00 67.00

Key Forecasts

  • Italy's oil production is expected to receive a significant boost from the Tempa Rossa field, which is set to come online in late 2018. Nonetheless, this will not suffice to achieve the government's goal of doubling oil production by 2020. Rapidly declining reserves are expected to push oil output gradually lower in the post-2020 period.

  • A deteriorating downstream sector in Italy, as elsewhere in Europe, has seen large refining capacity and refined products production cuts over the past decade. Further cuts are to be expected, given continued capacity oversupply and weak demand growth.

  • Economic difficulties are expected to continue suppressing oil consumption in Italy, which we see gradually declining till 2016, before stagnating or very slowly increasing until the end of our forecast period. Distillates consumption as a proportion of total refined products consumption will continue to make headway, as the share of gasoline consumption falls, due to the continued dieselisation of the vehicle fleet.

  • With limited domestic crude oil production, Italy will remain a large net importer of crude oil. However, net import requirements have fallen substantially and will continue to fall due to large cuts in refining capacity. On the other hand, the refining capacity cuts will see continued decline in net refined products exports, which should fall to near zero by the end of our forecast period.

  • Due to maturing fields and lack of new significant discoveries, Italy's gas production will continue on a downward slope throughout our forecast period, declining from an estimated 7.3bcm in 2015 to 5.4bcm in 2025. Small-scale developments will slow production decline to a yearly 3% decline rate over the forecast period.

  • A weak but positive economic growth trajectory, in addition to increased use in the residential sectors should see gas consumption growth remain in positive territory over the remainder of the forecast period. Nevertheless, a subdued economic environment and the strong rise of renewable for power generation will prevent more substantial consumption growth over our forecast period.

  • We expect Italy to remain one of the largest importers of natural gas in Europe with import volumes rising from an estimated 55.8bcm in 2015 to 67.7bcm in 2025.

Latest Updates

  • The reintroduction by the 2016 Budget Law of the ban on exploration and production activity within 12 nautical miles of the Italian coast will stem some of the interest for offshore exploration. The lack of policy consistency also creates an uncertain regulatory environment for the industry. For example, as a result of the re-introduction of the ban, Rockhopper Exploration was told by the Ministry of Economic Development that Production Concession covering the Ombrina Mare Field Area in the central Adriatic Sea will now not be awarded. This is despite the company having complete dall the required technical and environmental authorisations.

  • Sound Oil reported in February 2016 it achieved first gas production at the onshore Nervesa gas discovery in northeast Italy.

  • In May 2015, the Italian government gave a final authorisation for the Trans-Adriatic Pipeline construction, despite local opposition in Italy's Apulia region, which is highly dependent on tourism.

  • In March 2015, Royal Dutch Shell's wholly owned subsidiary Shell Italia E&P farmed-in an 80% interest and operatorship of the Cascina Alberto permit onshore north west Italy from AIM-listed Northern Petroleum. Shell will pay USD850,000 in cash on completion of the transaction. Shell will continue with the North Petroleum exploration programme, which includes the acquisition of any new seismic data until the seismic costs reach USD4mn and exploration of the well until costs reach USD50mn.

  • In August 2015, Italy's Foreign Minister Paolo Gentiloni stated that Iran is likely to modify contract terms with the state-owned oil company Eni as the country emerges from a tough regime of Western sanctions. Earlier in August, Eni noted that it would consider investing in Iran after sanctions are removed and if Tehran provides favourable contract terms similar to international standards.

BMI Industry View
7
Table: Headline Forecasts (Italy 2014-2020)
7
SWOT
9
Industry Forecast
10
Upstream Exploration
10
Latest Updates
10
Structural Trends
10
Upstream Projects
15
Table: Upstream Projects
15
Upstream Production - Oil
17
Latest Updates
17
Structural Trends
17
Table: Oil Production (Italy 2014-2019)
19
Table: Oil Production (Italy 2020-2025)
19
Upstream Production - Gas
20
Latest Updates
20
Structural Trends
20
Table: Gas Production (Italy 2014-2019)
22
Table: Gas Production (Italy 2020-2025)
22
Refining
23
Latest Updates
23
Structural Trends
23
Table: Refining Capacity and Refined Products Production (Italy 2014-2019)
25
Table: Refining Capacity and Refined Products Production (Italy 2020-2025)
26
Refined Fuels Consumption
27
Latest Updates
27
Structural Trends
27
Table: Refined Products Consumption (Italy 2014-2019)
29
Table: Refined Products Consumption (Italy 2020-2025)
29
Gas Consumption
30
Latest Updates
30
Structural Trends
30
Table: Gas Consumption (Italy 2020-2025)
32
Trade - Oil
33
Crude Oil
33
Latest Updates
33
Structural Trends
33
Table: Crude Oil Net Exports (Italy 2014-2019)
35
Table: Crude Oil Net Exports (Italy 2020-2025)
35
Refined Products
35
Latest Updates
35
Structural Trends
35
Table: Refined Fuels Net Exports (Italy 2014-2019)
36
Table: Refined Fuels Net Exports (Italy 2020-2025)
37
Trade - Gas (Pipeline And LNG)
38
Latest Updates
38
Structural Trends
38
Table: Gas Net Exports (Italy 2014-2019)
41
Table: Gas Net Exports (Italy 2020-2025)
41
Industry Risk Reward Index
42
Central And Eastern Europe - Oil & Gas Risk/Reward Index
42
Table: Regional Risk/Reward Index Averages - High Risk, Low Reward In Central And Eastern Europe
42
Table: Central And Eastern Europe - Upstream, Downstream And Overall Risk/Reward Index
43
Upstream: China Still The Target Market
44
Table: Central And Eastern Europe Upstream Risk/Reward Index
46
Downstream: Turkish STAR Only Bright Spot In Weak Market
47
Table: Central And Eastern Europe - Downstream Risk/Reward Index
49
Italy - Risk/Reward Index
51
Upstream Index
51
Downstream Index
51
Market Overview
52
Italy Energy Market Overview
52
Regulatory Structure
52
Fiscal Regime
53
Table: Italy Oil And Gas Fiscal Regime
53
Licensing Regime
53
Table: Italy Licensing Regime
53
Oil And Gas Infrastructure
54
Oil Refineries
54
Table: Refineries In Italy
54
Service Stations
55
Oil Storage Facilities
55
Oil Terminals/Ports
56
LNG Terminals
56
Table: Italy - LNG Terminals
58
Gas Storage Facilities
59
Gas Pipelines
59
Competitive Landscape
63
Competitive Landscape Summary
63
Company Profile
65
Eni
65
ERG
73
Po Valley Energy
77
Royal Dutch Shell
82
Other Summaries
85
Regional Overview
91
Central And Eastern Europe Oil And Gas Regional Overview
91
Oil Production: Output Growth Stalling
91
Oil Consumption: Weak EM Growth Softens Demand
92
Refining Capacity: Modernisation Over Capacity Growth
93
Natural Gas Production: Gas Ramp-Up Depends On China's Hunger
94
Table: Central Asia-China Gas Pipeline Expansions
95
Gas Consumption: Demand Falters On Struggling Economies
96
Table: Central And Eastern Europe - Oil And Gas Production And Consumption, Refining Capacity And Trade
97
Glossary
99
Table: Glossary Of Terms
99
Methodology
101
Industry Forecast Methodology
101
Source
103
Risk/Reward Index Methodology
103
Table: Bmi's Oil & Gas Upstream Risk/Reward Index
105
Table: Weighting
106

The Italy Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Italy 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 Italy Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Italian oil and gas industry.

Key Benefits

  • Benchmark BMI's independent oil and gas industry forecasts for Italy to test consensus views - a key input for successful budgeting and strategic business planning in the Italian oil and gas market.
  • Target business opportunities and risks in the Italian oil and gas sector through reviews of latest industry trends, regulatory changes and major deals, projects and investments in Italy.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity) and Competitive Landscape Tables.

Coverage

BMI Industry View

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.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the upstream and downstream sectors and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecast:

  • Pricing: Oil price (USD/bbl, WTI, Brent, OPEC basket, Urals); oil products prices (unleaded gasoline, gasoil/diesel, jet/kerosene – USD/bbl) at global hubs.
  • Production, Consumption, Capacity & Reserves: Proven oil reserves (bn barrels), production, consumption, refinery capacity and throughputs (‘000b/d); proven gas reserves (tcm), production and consumption (bcm) and fuels trade.
  • Imports & Exports: Crude oil exports/imports (‘000s b/d) and value of crude oil trade in USD. Fuels exports/imports (‘000s b/d) and value of fuels trade in USD. Natural gas imports/exports (bcm), by pipeline and/or LNG, and value of natural gas trade.

BMI’s Oil & Gas Risk Reward Index

BMI’s Risk Reward Indices provide investors (independents, NOCs, IOCs, oil services companies) looking for opportunities in the region with a clear country-comparative assessment of the upstream and downstream market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

Market Overview

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.

Competitive landscape

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.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Regional Overview

Regional perspective on size and value of the industry. Plus comparative rankings by production, refining, imports and exports of oil, gas and LNG.

Global Oil Market & Oil Products Outlook

Based on our country coverage of over 99% of global oil and gas production and consumption, BMI provides demand, supply and price forecasts to end-2024 for oil, gas and oil products.

Sources

The Oil & gas Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.