The latest Qatar Oil & Gas Report from BMI forecasts that the country will account for just 1.02% of Middle Eastern (ME) regional oil demand by 2013, while providing 7.07% of supply. Regional oil use of 8.24mn barrels per day (b/d) in 2001 rose to 11.25mn b/d in 2008. It should average 11.30mn b/d in 2009 and then rise to around 12.17mn b/d by 2013. Regional oil production was 22.87mn b/d in 2001, and in 2008 averaged 26.29mn b/d. It is set to rise to 28.01mn b/d by 2013. Oil exports are growing steadily, because demand growth is lagging the pace of supply expansion. In 2001, the region was exporting an average 14.63mn b/d. This total had risen to 15.04mn b/d in 2008 and is forecast to reach 15.84mn b/d by 2013. Iraq has the greatest production growth potential, followed by Qatar. In terms of natural gas, the region in 2008 consumed 391.5bn cubic metres (bcm), with demand of 512.8bcm targeted for 2013, representing 31.0% growth. Production of 389.5bcm in 2008 should reach 610.4bcm in 2013 (+56.7%), which implies net exports rising to 98bcm by the end of the period. Qatar in 2008 consumed 5.06% of the region’s gas, with its market share forecast at 4.60% by 2013. It contributed 19.66% to 2008 regional gas production and, by 2013, will account for 22.22% of supply. For 2009 as a whole, we are now assuming an average OPEC basket price of US$55.00 per barrel (bbl), a 41.5% decline year-on-year (y-o-y). This represents an upgrade from the US$52 forecast we have stuck with during the past three quarters. Our OPEC basket assumption delivers likely Brent, WTI, Urals and Dubai prices of US$56.30, US$57.50, US$55.60 and US$55.60/bbl respectively. For 2010, we expect to see a recovery to US$60.00/bbl for the OPEC price (up from our previous forecast of US$58), gaining further ground to US$65.00 in 2011 and to US$70.00/bbl in 2012. Our post-2010 forecasts are unchanged and we are continuing to use a long-term price assumption of US$70.00 for 2013-2018. In 2009, BMI is now assuming a global average gasoline price of US$62.12/bbl, with the fuel having peaked in June. The overall y-o-y fall in 2009 gasoline prices is put at 40.0%. The BMI gasoil forecast is for an average price of US$68.62/bbl, assuming a monthly high of US$92.49/bbl in December. The fullyear outturn represents a 43.4% fall from the 2008 level. The annual jet price level for 2009 is forecast to be US$65.17/bbl. This compares with US$124.95/bbl in 2008. The 2009 average naphtha price is put by BMI at US$49.06/bbl, down 43.9% from the previous year’s level. Qatar’s real GDP growth is now forecast by BMI at 6.7% for 2009, down from 11.7% in 2008. We are assuming 13.1% growth in 2010 and 9.0% in 2011, followed by 5.2% in 2012 and 2.8% in 2013. We expect oil demand to rise from 104,000b/d in 2008 to 124,000b/d in 2013. State-owned Qatar Petroleum (QP) negotiates exploration and production (E&P) agreements, shares in upstream projects and has 50% of oil and 40% of gas production. It has signed agreements with many of the leading international oil companies (IOCs), particularly for gas development and export projects. Our estimates assume 1.40mn b/d of 2009 oil and liquids production, rising to 1.98mn b/d by the end of the forecast period. Gas production should reach 135bcm by 2013, up from 77bcm in 2008. Consumption is expected to rise from 20bcm to 24bcm by the end of the forecast period, allowing for exports of 111bcm. Between 2008 and 2018, we are forecasting an increase in Qatari oil and gas liquids production of 60.9%, with volumes rising steadily to 2.22mn b/d by the end of the 10-year forecast period. Oil consumption between 2008 and 2018 is set to increase by 59.4%, with growth slowing to an assumed 6.0% per annum towards the end of the period and the country using 166,000b/d by 2018. Gas production is expected to rise from 77bcm to 162bcm by the end of the period. With 2008-2018 demand growth of 41.4%, this provides an export capability rising from 57bcm to 134bcm by 2018. Details of BMI’s 10-year forecasts can be found in the Appendix to this report. Qatar is still ranked first, ahead of the UAE, in BMI’s updated Upstream Business Environment rating. We see little risk over the short-, medium- or long-term of its position being challenged, thanks to the country’s extraordinary gas wealth. It is a comfortable four points clear of the UAE, and should be able to retain its lead. The country’s score benefits from a sound country risk profile, healthy output growth prospects, high reserves-to-production ratios (RPR) and an attractive licensing regime. The country is fifth in BMI’s updated Downstream Business Environment rating, with a few high scores but longer-term progress up the rankings unlikely. It has remained ahead of Saudi Arabia, in spite of low scores for refining capacity, oil demand, retail site intensity, population, nominal GDP and private company involvement in the downstream segment. Generally healthy country risk factors help bolster the overall score.