Kuwait will account for 2.68 percent of Middle East (ME) regional oil demand by 2014, while providing 10.665 percent of supply, the latest Kuwait Oil & Gas Report from BMI noted. Regional oil use of 8.11 million barrels per day (b/d) in 2001 rose to an estimated 11.38 million b/d in 2009. It should average 11.66 million b/d in 2010 and then rise to around 12.68 million b/d by 2014. Regional oil production was 22.88 million b/d in 2001 and averaged an estimated 24.83 million b/d in 2009. It is set to rise to 27.19 million b/d by 2014. Oil exports are growing steadily, because demand growth is lagging the pace of supply expansion. In 2001, the region was exporting an average of 14.77 million b/d. This had eased to an estimated 13.44 million b/d in 2009 and is forecast to reach 14.51 million b/d by 2014. Iraq has the greatest production growth potential, followed by Qatar. In terms of natural gas, the region consumed an estimated 404.6bn cubic meters (bcm) in 2009, with demand of 542.1bcm targeted for 2014, representing 34.0 percent growth. Estimated production of 411.9bcm in 2009 should reach 655.4bcm in 2014 (+59.1 percent), which implies net exports rising to 113.0bcm by the end of the period. Kuwait consumed an estimated 3.95 percent of the regions gas in 2009, with its market share forecast at 5.04 percent by 2014. It contributed 3.32 percent to estimated 2009 regional gas production and by 2014 will account for 2.95 percent of supply. For 2009 as a whole, we have assumed an average OPEC basket price of $60.70 per barrel (bbl), a 35.5 percent decline year-on-year (y-o-y). For 2010, we expect to see a significant oil price recovery to $83.00/bbl for the OPEC basket price, gaining further ground to $85.00 in 2011 and to $90.00/bbl in 2012 and beyond. In 2010, BMI is forecasting premium unleaded gasoline prices to average $97.00, up from $70.22/bbl in 2009. “We are assuming an average global jet fuel price for 2010 of $97.58/bbl, compared with $70.63 in 2009. For gasoil, the 2010 price estimate is for an average of $97.40/bbl, compared with $70.50 in 2009.” The FY10 naphtha price average, estimated at $81.58/bbl compares with $59.07 in FY09. Kuwait's real GDP is assumed by BMI to have fallen by 1 percent in 2009, compared with 7.7 percent growth in 2008. “We are assuming average annual growth of 2.9 percent in 2010-2014. We expect oil demand to rise from an estimated 303,000b/d in 2009 to 339,000b/d in 2014, lagging the underlying rate of economic expansion,” it said. State oil company Kuwait Petroleum Corporation (KPC) is responsible for all domestic oil and gas operations. In spite of the absence of near-term international oil company (IOC) investment, crude production is forecast to increase from an estimated 2.59 million b/d in 2009 to 2.90 million b/d in 2014, subject to OPEC quotas. Gas production should reach 19.3bcm by 2014, up from an estimated 13.7bcm in 2009. Consumption is expected to rise from an estimated 16.0bcm to 27.3bcm by the end of the forecast period, requiring imports of 8.0bcm. Between 2009 and 2019, we are forecasting an increase in Kuwaiti oil production of 39.3 percent, with crude volumes rising steadily to 3.60 million b/d by the end of the 10-year forecast period. Oil consumption between 2009 and 2019 is set to increase by 33.0 percent, with growth slowing to an assumed 3.0 percent per annum toward the end of the period.
