BMI View: Though we witnessed an uptick in upstream investment into conventional resources within Spain over the past several years, we expect domestic production of oil and gas will remain negligible . W e expect imports will meet approximately 99% of demand for the foreseeable future . Moreover, w e believe prospects for onshore unconventionals will remain limited as significant technical, economic, environmental and political obstacles preclude us from including further upstream development of shale gas resources within our forecast period.
|e/f = BMI estimate/forecast. Source: EIA, BMI|
|Crude, NGPL & other liquids prod, 000b/d||7.4||5.7||5.4||5.3||5.3||5.2||5.2|
|Refined products production, 000b/d||1,109.7||1,134.8||1,112.1||1,101.0||1,090.0||1,079.1||1,073.7|
|Refined products consumption & ethanol, 000b/d||1,208.1||1,228.3||1,233.8||1,214.7||1,184.9||1,178.9||1,196.5|
|Dry natural gas production, bcm||0.0||0.1||0.1||0.0||0.0||0.0||0.0|
|Dry natural gas consumption, bcm||27.2||27.4||27.8||28.3||28.9||29.5||30.0|
The main trends and developments we highlight in Spain's oil and gas sector are:
Prospects for conventional oil and gas discoveries remain poor, with insignificant existing volumes of oil reserves. Offshore opportunities took a hit in 2015 with withdrawals from Repsol and Cairn Energy. Above-ground regulatory and environmental hurdles along with local government opposition are the largest obstacles to upstream development. . Political, regulatory and economic obstacles will most likely prevent shale gas from factoring into reserves within the forecast period.
With consumption forecast set to fall slightly or stagnate amid global overcapacity, the outlook for Spain's downstream appears bleak. There are no planned new refineries under way with a crude oil refining capacity forecast to remain at 1.49mn b/d across our forecast period. Risks to this outlook are to the downside, with ageing refineries unable to compete with the scale and efficiency of new generation capacity being built in the Middle East and Asia.
Iran announced in February 2016 plans to build a USD2bn oil refinery with a capacity of 120,000b/d. The National Iranian Oil Refining and Distribution Company (NIORDC) plans to cooperate with Spain's Magtel for the construction of the refinery in the Southern port city of Algeciras. At the moment, we do not include this within our forecast period given the lack of information regarding the project, the risks relating to the possibility of sanctions being put back into place should Iran breach the terms of the deal, the continued overcapacity issue in Western European refining market and Iran's limited financing availability. However, it is a risk we will follow closely.
After years of strong refined fuels consumption declines, we forecast consumption to largely stagnate over the rest of our forecast period thanks to continued efficiency drive in the transport sector and stagnant vehicle fleet.
Spain will remain a large net importer of crude oil over the next decade which will weigh on its overall trade balance. Spain will also rely on limited net imports of refined fuels over the forecast period, oscillating between 50,000b/d and 112,000b/d to 2025. This remains far below pre-2012 levels, largely thanks to the strong decline in domestic consumption.
After years of strong consumption decline growth, gas consumption returned on a small uptrend in 2015. We expect growth will continue over the forecast period as macroeconomic dynamics improve. However, given relatively modest economic growth, we believe domestic demand will remain somewhat subdued over our forecast period relative to the pre-economic crisis levels.
Spain will see growth in gas net imports over the forecast period after years of strong decline. The global fall in gas prices will also support our forecast for steadily recovering liquefied natural gas (LNG) imports for Spain, reaching 25bcm by the end of our forecast period in 2025.
After the strong decline in gas price differentials between Asian and European LNG spot prices, the LNG reloading activity, which Spain had engaged in intensely since 2011, became mostly uneconomic. Spain has reloaded about 4mn tonnes of LNG in 2014. This fell to 1mn tonnes in 2015, with a collapse of re-exports to Asia and the Americas. The low levels of reloading activity is likely to endure over the coming years.
The Spain Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Spain 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 Spain Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Spanish oil and gas industry.
- Benchmark BMI's independent oil and gas industry forecasts for Spain to test consensus views - a key input for successful budgeting and strategic business planning in the Spanish oil and gas market.
- Target business opportunities and risks in the Spanish oil and gas sector through reviews of latest industry trends, regulatory changes and major deals, projects and investments in Spain.
- 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.
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.
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.
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 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.
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.