The new Sudan Oil & Gas Report forecasts that the country will account for 3.09% of African regional oil demand by 2013, while providing 6.44% of supply. African regional oil use of 2.98mn barrels per day (b/d) in 2001 rose to 3.60mn b/d in 2008. It should average 3.58mn b/d in 2009 and then rise to around 3.96mn b/d by 2013. Regional oil production was 7.84mn b/d in 2001, and in 2008 averaged 10.20mn b/d. It is set to rise to 11.98mn 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 4.86mn b/d.

This total had risen to 6.60mn b/d in 2008 and is forecast to reach 8.02mn b/d by 2013. Angola has the greatest production growth potential, with Nigerian exports set to soar if it can resolve recent quasipolitical issues.

In terms of natural gas, the region in 2008 consumed 115bn cubic metres (bcm), with demand of 181bcm targeted for 2013. Production of 211bcm in 2008 should reach 354bcm in 2013, which implies net exports rising from 96bcm in 2008 to 173bcm by the end of the period. Sudan is neither a consumer nor producer of gas.

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, the report 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 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 at US$49.06/bbl, down 43.9% from the previous year’s level.

Sudanese real GDP growth is now forecast at 3.2% for 2009, down from 7.8% in 2008. We are assuming 2.4% growth in 2010, 2.8% in 2011, followed by 3.0% in 2012 and 3.4% in 2013. We expect oil demand to rise from an estimated 99,000b/d in 2008 to 122,000b/d in 2013. State oil company Sudan National Petroleum Corporation (Sudapet) is active in the country’s oil exploration and production (E&P) sector, working in partnership with foreign (largely Asian) companies in raising oil output from 480,000b/d in 2008 to 771,000bd in 2013. There are no plans for significant gas production or consumption.

Between 2008 and 2018, we are forecasting an increase in Sudan oil and gas liquids production of 50.9%, with volumes peaking at 785,000b/d in 2014, before falling steadily to 724,000b/d by the end of the 10- year forecast period. Oil consumption between 2008 and 2018 is set to increase by 58.3%, with growth slowing to an assumed 5.0% per annum towards the end of the period and the country using 156,000b/d by 2018. Details of the 10-year forecasts can be found in the appendix to this report.

Sudan now occupies ninth place in the updated Upstream Business Environment rating, having overtaken Equatorial Guinea. The slim one-point margin leaves it vulnerable to assault from below. The country’s score suffers from very poor country risk issues, the absence of gas resources and significant state influence. Unless the risk profile changes for the better, Sudan will struggle to edge further away from the foot of the table, in spite of healthy oil resources. The country is near the mid-point of the league table in the updated Downstream Business Environment rating, with few high scores and progress further up the rankings unlikely unless the energy market grows more rapidly or new refineries are built.

It is ranked equal sixth alongside Libya thanks to low scores for gas demand, country risk factors and nominal GDP.