France Oil and Gas Report Q4 2011

This latest France Oil & Gas Report forecasts that the country will account for 14.25% of regional oil consumption by 2015, while making only a 0.50% contribution to supply. In Developed Europe, overall regional oil demand will be an estimated 12.71mn barrels per day (b/d) in 2011 and is set to reach 13.17mn b/d by 2015. Developed Europe regional oil production are projected to reach 3.83mn b/d in 2011, but is forecast to fall to just 3.34mn b/d in 2015. Regional net imports are set to rise from an estimated 8.88mn b/d in 2011 to 9.83mn b/d by the end of the forecast period. Norway will remain the only major net exporter, with the UK a growing net importer.

The Developed Europe region is expected to consume 457bn cubic metres (bcm) of natural gas in 2011, with demand of 498bcm targeted for 2015, representing 9.0% growth. Production of an estimated 238cm in 2011 is set to rise to 248bcm in 2015, which implies net imports rising from the estimated 2011 level of 219bcm to some 250bcm by the end of the period. Frances share of gas consumption in 2011 is expected to be an estimated 10.89%, while it will account for just 0.33% of production. By 2015, its share of gas consumption is forecast to be 10.64%, while its share of production will remain low at just 0.26%.

Global GDP growth in 2011 is forecast at 3.6%, down from 4.3% in 2010. Growth in both the US and Eurozone should be marginally higher than last year, while Chinese economic expansion will slow and Japans growth will be 1.65%, reflecting the devastating earthquake and tsunami in March 2011. Our oil price assumption for 2011 is US$101.90/bbl for the OPEC basket, falling to US$97.50/bbl in 2012.

We forecast French real GDP rising by 2.17% in 2011. We are assuming 1.91% average annual growth in 2011-2015. Improved energy efficiency and efforts to cut carbon emissions will see oil consumption remain largely flat in spite of increased economic activity, with estimated 2011 demand of 1.83mn b/d forecast to rise slightly to 1.88mn b/d in 2015. Crude oil imports are expected to reach 1.86mn b/d in 2015. Gas demand is expected to rise more quickly than that for oil, with new sources being lined up by GDF Suez, which has signed import agreements with Egypt, Russia, Norway, Algeria and the Netherlands. Gas consumption is forecast to reach 53.0bcm by 2015, up from an estimated 49.7bcm in 2011. Production is negligible, so imports could rise to 52.3bcm coming from both expanded liquefied natural gas (LNG) import capacity and pipelines.

Between 2011 and 2020, we forecast an increase in French oil and gas liquids consumption of 7.32%, with estimated 2011 demand of 1.83mn b/d rising slowly to a peak of 1.96mn b/d in 2020. Gas demand should rise from an estimated 2011 level of 49.7bcm to 58.1bcm by 2020, based on LNG and pipeline imports. Details of our 10-year forecasts can be found in the appendix to this report.

According to our country risk team, Frances long-term political risk score is 86.2, compared with the Developed Markets average of 87.1 and a global average of 63.0. Our long-term economic rating for the country is 66.4, below the Developed Markets average of 67.3, but above the global average of 52.9.

France has a fully privatised and competitive oil and gas industry. State holdings have been reduced greatly in electricity and gas suppliers Electricité de France (EdF) and GdF Suez. The upstream and downstream oil segments are privatised and deregulated, with considerable international oil company (IOC) involvement in refining and distribution, even though former state company Total has the greatest market share.

The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.