BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Oil & Gas Sector Of Algeria

The latest Algeria Oil & Gas Report from BMI forecasts that the country will account for 2.8% of MEA regional oil demand by 2010, while providing 5.5% of supply. MEA regional oil demand rose to 10.7mn b/d last year and should average 10.9mn b/d in 2006, before reaching 12.2mn b/d by 2010. MEA gas consumption in 2005 was 343bcm, with demand of 533bcm targeted for 2010. Production last year of 448bcm should reach 774bcm by the end of the decade. Algeria's share of consumption in 2005 was 7.0%, while its share of production was 19.6%. By 2010, its share of demand is forecast to be 9.0%, with the country accounting for 16.8% of supply.

Assuming an uneventful Q4, we are now predicting an OPEC basket price for 2006 averaging US$61.10/bbl – an increase of US$1.10 from our June forecast. This also represents a 19% rise from the FY05 average. Our forecasts for the US, Brent and Urals are US$66.40, US$65.40 and US$61.60/bbl respectively. For 2007, we continue to assume an OPEC basket price of US$50/bbl, which implies US$55.40 for the US, US$53.40 for Brent and US$49.50 for Urals. Prices are then forecast to fall by around US$5/bbl in 2008-2010, with the OPEC price averaging US$45/bbl over the period.

Algerian real GDP growth is now forecast by BMI at 5.5% for 2006, following 5.3% in 2005. We are assuming 5.7% growth in 2007 and an average 4.5% in 2008-10. We therefore expect oil demand of 254,000b/d in 2005 to rise to 340,000b/d in 2010, lagging slightly the underlying GDP trend. State oil company Sonatrach dominates the industry, operating in partnership with various IOCs, but accounting for 60% of the country's oil output. Thanks largely to IOC investment, combined oil and gas liquids output is forecast to increase from 2.02mn b/d in 2005 to 2.13mn b/d in 2010, with exports heading towards 1.8mn b/d. The country’s OPEC membership and assigned production quota could frustrate volume growth ambitions. Gas production of just under 88bcm last year should reach 130bcm by 2010. Consumption of 24.1bcm in 2005 is expected to rise to 48.5bcm by the end of the forecast period, providing exports of 81.5bcm.

In the BMI Business Environment Ranking matrix, Algeria this quarter receives an unchanged composite score of 31, which now ranks the country equal eighth out of 16 states included in the MEA region, alongside Bahrain, Oman and Egypt. The country's overall business environment can be considered pretty neutral in a regional context, thanks largely to a high level of political risk, offset by the country's effective licensing regime and benign competitive landscape. Algeria has only moderate oil production growth prospects and a low reserves-to-production ratio (RPR).

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Regional Market Overview

Middle East/Africa Region

Table MEA Oil Consumption (000b/d)

Table: Middle East/Africa Oil Production (000b/d)

Table Middle East/Africa Oil Refining Capacity (000b/d)

Table: Middle East/Africa Gas Consumption (bcm)

Table Middle East/Africa Gas Production (bcm)

Table: Middle East/Africa LNG Exports/(Imports) (bcm)

Algeria

Chapter 3 - Business Environment Rankings

Algeria

Middle East/Africa Region

Chapter 4 - Algeria Business Environment Ranking

Economics – Long-Term Risk

Politics – Long-Term Risk

Oil & Gas Growth

Oil/Gas Reserves

Licensing/Regulation

Competitive Environment

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Chapter 5 - Oil Market Outlook

Table Crude Price Forecasts 2006

Revised Forecasts

Table Oil Price Forecasts

Chapter 6 - Regional Supply and Demand

Middle East/Africa

Table: Middle East/Africa Oil Production (000b/d)

Table Oil Consumption (000b/d) – Middle East/Africa

Chapter 7 - Global Picture

Table Global Oil Consumption (000b/d)

Table Global Oil Production (000b/d)

Chapter 8 - Industry Forecast Scenario

Oil and Gas Reserves

Oil Supply and Demand

Gas Supply and Demand

LNG

Refining and Oil Products Trade

Revenues/Import Costs

Table: Algeria Oil & Gas – Historic Data & Forecasts

Other Energy

Table 15: Algeria Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 9 - Economic Outlook

Table: Algeria: Macroeconomic Data And Forecasts

Chapter 10 - Country Snapshot: Algeria Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Chapter 11 - Regional Case Study

Global Player With Conflicting Domestic Needs

Chapter 12 - Competitive Landscape

Executive Summary

Table: Key Players – Algerian Energy Sector

Overview/State Role

Table: Key Upstream Players

Anadarko – Summary

Eni – Summary

BHP Billiton – Summary

Hess – Summary

BP – Summary

Table: Key Downstream Players

Cepsa – Summary

Maersk – Summary

RepsolYPF – Summary

Shell – Summary

Statoil – Summary

Conoco/Burlington – Summary

Total – Summary

Talisman – Summary

CNPC – Summary

Others – Summary

Chapter 13 - Company Monitor

Enterprise Nationale Sonatrach

Anadarko Algeria

Company Analysis

SWOT Analysis

Eni Algeria Production

Company Analysis

SWOT Analysis

BP Algeria

Company Analysis

SWOT Analysis

BHP Petroleum (Algerie)

Company Analysis

SWOT Analysis

Cepsa

Company Analysis

SWOT Analysis

Statoil Algeria

Company Analysis

SWOT Analysis

Chapter 14 - BMI Forecast Modelling

How we generate our industry forecasts

Energy Industry

Cross checks

Sources

Chapter 15 - Appendix: Regional Demographic Data

The Long View: Data Over The Economic Cycle (2000-2007)

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Network of Middle Eastern and African Oil and Gas Sources

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BMI's Middle Eastern and African Oil and Gas Reports are based on an extensive network of multilateral organisations, government departments, oil and gas industry associations, chambers of commerce and company reports. Information sources include: