Boston, MA -- (SBWIRE) -- 08/28/2012 -- BMI View: With declining production and few new projects expected to come on-stream in the next decade, Cameroon's upstream oil outlook seems rather unsteady. Meanwhile, a more efficient usage of associated gas, through the limitation of flaring, and the development of domestic resources offer prospects for booming growth in the gas upstream with opportunity for LNG exports.

Main trends and developments we highlight for Cameroon's Oil and Gas sector are as follows:

- BMI expects growth in oil production to be somewhat irregular over the next decade with output of 71,000 barrels per day (b/d) in 2012, peaking at 87,000b/d in 2014 and 2015 before falling back to 79,000b/d in 2017, then hitting 84,000b/d in 2018 and finally settling at around 78,000b/d in 2021. This chaotic growth is explained by the limited number of new projects, which implies that each time new volumes come on-stream, total output surges before slowly decreasing as a result of a decline in output from fields that are already producing.
- Meanwhile, consumption of crude is likely to rise at an average rate of 5.6% from 2011 to 2021. We therefore anticipate that consumption will rise from 27,000b/d in 2011, to hit 47,000b/d by 2021.
- BMI forecasts that gas production will increase from 0.03bn cubic metres (bcm) in 2011 to 5.78bcm by 2021, as the authorities and companies reduce the practice of flaring and start monetising associated gas resources. Gas production is to be boosted further by new projects with considerable associated gas production, such as Victoria Oil and Gas' Logbaba project (6bcm). Gas output growth will be bolstered by domestic demand but also by export prospects, notably in the form of LNG as suggested by the proposed 4.8bcm LNG terminal in Kribi.
- Gas demand is set to rise at an average rate of 23.7% on the back of numerous infrastructure projects that will boost domestic consumption. The most notable of these projects is the 150 megawatt (MW) Kribi power plant. As a result, we see gas consumption rising from 0.03bcm in 2011 to 0.18bcm by 2021.
- Cameroonian crude reserves are likely to continue declining as increased output will result in high depletion rates. We see proven oil reserves falling from 200mn barrels (bbl) in 2011 to 160mn bbl in 2021. The reserves-to-production ratio will fall from little more than nine years to under six years. With regard to gas, the outlook is less dire as the potential for discoveries offers more stable prospects. We see reserves hovering between 140bcm and 150bcm throughout the decade.

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