BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Oil & Gas Sector Of Angola

The latest Angola Oil & Gas Report from BMI forecasts that the country will account for just 0.9% of MEA regional oil demand by 2010, while providing 5.4% of supply thanks to rapid growth in deepwater production. 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. Angola's share of consumption in 2005 was 0.6%, while its share of production was just 0.5%. By 2010, its share of demand is forecast to be 1.1%, with the country accounting for 1.6% 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.

Angolan real GDP growth is now forecast by BMI at 27.5% for 2006, following 20.0% in 2005. We are assuming 20.0% growth in 2007. Dramatic economic growth is matched by spectacular oil demand growth, albeit from a low base. Consumption is set to rise from an estimated 53,000b/d last year to 107,000b/d by 2010. State oil company Sonangol operates in partnership various IOCs and now accounts for less than 40% of the country's oil output. Thanks largely to IOC investment, oil output is forecast to increase from 1.24mn b/d in 2005 to 2.10mn b/d in 2010, with exports heading towards 2.0mn b/d. Only severe project slippage, brought about by tightness in the oil services segment, seems capable of weakening the volume growth trend. Gas production of just 1.5bcm last year should reach 12bcm by 2010. Consumption is expected to rise to 5bcm by the end of the forecast period, providing exports of 7bcm.

In the BMI Business Environment Ranking matrix, Angola this quarter receives a slightly lower composite score of 34 points and has now dropped from equal fifth to outright sixth place in the regional league table. The country’s overall business environment can be considered fairly attractive in a regional context, thanks largely to the unrivalled oil and gas growth potential, its effective licensing regime and a benign competitive landscape. While Angola’s reserves-to-production ratio appears low, there is a lot of unexploited hydrocarbons potential in the country.

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)

Angola

Chapter 3 - Business Environment Rankings

Angola

Middle East/Africa Region

Chapter 4 - Angola 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: Angola Oil & Gas – Historic Data & Forecasts

Other Energy

Table: Angola Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 9 - Country Snapshot: Angola 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

Chapter 10 - Regional Case Study

Global Player With Conflicting Domestic Needs

Chapter 11 - Competitive Landscape

Executive Summary

Table: Key Players – Angolan Oil & Gas Sector

Overview/State Role

Chevron – Summary

ExxonMobil – Summary

Table: Key Upstream Players

Total – Summary

BP – Summary

Eni – Summary

Table: Key Downstream Players

Statoil – Summary

Norsk Hydro – Summary

Petrobras – Summary

Devon – Summary

Chapter 12 - Company Monitor

Sociedade Nacional de Combustíveis de Angola (Sonangol)

Chevron

Company Analysis

SWOT Analysis

Esso Exploration Angola

Company Analysis

SWOT Analysis

BP Angola

Company Analysis

SWOT Analysis

Total Exploration Angola

Company Analysis

SWOT Analysis

Eni Angola Production

Company Analysis

SWOT Analysis

Chapter 13 - BMI Forecast Modelling

How we generate our industry forecasts

Energy Industry

Cross checks

Sources

Chapter 14 - 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: