Boston, MA -- (SBWire) -- 05/03/2013 --The Angolan hydrocarbon market has made several steps forward since the beginning of 2013. These include the start-up of production at BP's PSVM field and a final investment decision on Chevron's Mafumeira Sul project. The industry is nonetheless impaired by numerous delays and stringent aboveground instabilities. Attempts to cut gas flaring and the opening of the Angola LNG plant will boost the outlook for gas production and exports, although recurrent delays have pushed back the project's starting date. OPEC quotas, the risk of further project delays and the Angolan political environment still imply a significant amount of uncertainty for the country's output.
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The main trends and developments we highlight for Angola's oil and gas sector are as follows:
- BP finally succeeded in starting production from the PSVM field, which we expect to reach 150,000 barrels per day (b/d) of peak production by 2014. Chevron's Mafumeira Sul project received a final investment decision and is set to start production from 2016/17. Finally, the Angola LNG project faced new delays in early 2013 with further postponement of the start-up date. While no deadline has been announced, we expect the project to start operations by Q413.
- We expect oil production to increase from approximately 1.83mn b/d in 2012 to 2.49mn b/d in 2018, followed by a decrease to 2.35mn b/d in 2022. This is the result of projects that have recently come onstream, such as Pazflor (220,000b/d) or PSVM (150,000 b/d), or that are scheduled to come onstream in the coming years.
- Consumption of crude is likely to rise quickly from 2011 to 2021. This very high rate of growth is boosted by the country's double-digit GDP growth, as the economy experiences a catching up phenomenon following nearly three decades of civil war. We therefore anticipate that consumption will rise from an estimated 97,500b/d in 2012 to hit 179,500b/d by 2022.
- We forecast that gas production will increase from 0.73bn cubic metres (bcm) in 2012 to more than 8bcm after 2020, as the authorities and companies reduce the practice of flaring and start to monetise/associated gas resources from massive fields such as Pazflor (1.5bcm) and PSVM (2.5bcm).
- Gas demand is set to rise steadily for the rest of the decade. Relatively low demand growth when compared to growth in gas production and oil consumption can be explained by the fact that gas plays virtually no role in the country's electricity generation and that there are no plans to expand its share in the energy mix. As a result, we see gas consumption rising from 0.8bcm in 2012 to 0.9bcm by 2022.
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New Market Report: Angola Oil & Gas Report Q2 2013
New Energy market report from Business Monitor International: "Angola Oil & Gas Report Q2 2013"