BMI View: W e maintain our cautious outlook for Venezuela's oil and gas sector d espite vast below- ground potential and ambitious production plans by state-owned PD VSA . We expect Venezuela to continue to underperform given the large scope of above-ground challenges, including excessive political interference, chronic underinvestment, an unattractive operating environment and the precarious financial situation of P D VSA . Moreover, the sustained fall in global oil prices will deteriorate produc tion growth prospects as both PD VSA and international investors face declining revenues and a reduction in available capex funds.
|e/f = BMI estimate/forecast. Source: EIA, BMI|
|Crude, NGPL & other liquids prod, 000b/d||2,462.0||2,398.6||2,326.4||2,278.5||2,242.4||2,217.7||2,203.6|
|Refined products production, 000b/d||1,163.9||1,179.1||1,194.4||1,209.9||1,225.7||1,241.6||1,257.7|
|Dry natural gas production, bcm||22.0||22.9||24.3||25.4||26.2||27.1||27.9|
|Dry natural gas consumption, bcm||24.3||25.2||26.2||26.9||27.4||28.1||28.9|
Latest Updates And Key Forecasts
Our crude production forecast for 2016 predicts a 3.0% y-o-y decline amid sustained weakness in crude oil markets. This will negatively impact available investment in Venezuela's upstream sector as the government contends with its significant public sector spending plans.
The landmark victory of the opposition party in Venezuela's legislative elections held on December 6 marks a clear break from the country's recent past, and will serve as a strong mandate for reform. While this marks the first power shift away from the ruling party in nearly 17 years, the United Socialist Party of Venezuela (PSUV)'s dominance in other branches of government and divisions within the opposing coalition will preclude a swift change in policy direction.
Venezuela's downstream sector continues to suffer from a lack of maintenance and underinvestment. This was illustrated by the blackout at the country's two largest refineries in October 2015, informing our modest capacity growth forecast through 2024.
Exports of both crude and refined products will decline as upstream activity wanes. Low fuel prices will prop up domestic demand and weigh on available export quantities through the remainder of our 10-year forecast period. Natural gas imports will also increase as domestic demand rises following the opening of the Juan Manuel Valdez gas-fired power plant in 2016.
On January 4, Venezuelan national oil company (NOC) Petroleos de Venezuela (PDVSA) indefinitely postponed its plans to export natural gas to Colombia amid stronger domestic demand, supporting our previously-held view. As recently as November 2015, PDVSA reiterated its commitment to complete the long-awaited reversal of the Antonio Ricaurte pipeline and begin sending 1.1mn cu m per day of supplies by January 1. However, the NOC now claims they are unable to uphold this agreement given adverse weather conditions from El Nino and continued demand from their industrial sector - factors we previously claimed would threaten future exports.
The Venezuela Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Venezuela 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 Venezuela Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Venezuelan oil and gas industry.
- Benchmark BMI's independent oil and gas industry forecasts for Venezuela to test consensus views - a key input for successful budgeting and strategic business planning in the Venezuelan oil and gas market.
- Target business opportunities and risks in the Venezuelan oil and gas sector through reviews of latest industry trends, regulatory changes and major deals, projects and investments in Venezuela.
- 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.