BMI's Executive Summary

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The latest Argentina Oil & Gas Report from BMI forecasts that the country will account for 6.06% of Latin America regional oil demand by 2011, while providing 6.33% of supply. Latin America regional oil demand rose to an estimated 6.87mn barrels per day (b/d) last year. It should average 7.01mn b/d in 2007 and then rise to around 7.82mn b/d by 2011. Regional oil production was last year estimated at 10.97mn b/d. It is set to rise to 11.85mn b/d by 2011.

In terms of natural gas, the region last year consumed an estimated 183bn cubic metres (bcm), with demand of 271bcm targeted for 2011, representing 48% growth. Production of an estimated 191bcm in 2006 should reach 272bcm in 2011, and implies just 2bcm of net exports the end of the period. Argentina's share of gas consumption in 2006 was an estimated 22.95%, while its share of production was 24.08%. By 2011, its share of gas consumption is forecast to be 19.93%, with the country accounting for 18.38% of supply.

For the whole of last year, our estimates of average crude oil prices are US$61.10 for the OPEC basket, US$65.10 for Brent, US$66.20/bbl for WTI and US$61.30 for Urals. For the first quarter of this year, we have adjusted our forecasts to reflect the weather-induced volatility. The OPEC basket is now expected to have averaged US$54.30/bbl, with Brent at US$57.60; WTI averaging US$58.70 and Urals at US$54.00/bbl. Our projections for 2007 as a whole are barely changed from the last quarterly report.

We are still assuming an OPEC basket price average of US$55 per barrel. Based on last year's typical price differentials, this implies Brent at US$58.80, WTI averaging US$59.90/bbl, and Urals at US$55.30/bbl. Argentinean real GDP growth is now forecast by BMI at 5.8% for 2007, down from an estimated 8.5% in 2006. We are assuming 3.1% growth in 2008, 3.3% in 2009, followed by 3.6% in 2010 and 3.5% in 2011.

A new state entity is now partnering international oil companies (IOCs) in supporting output growth efforts, operating alongside regional heavyweight RepsolYPF and established foreign producers. We are assuming oil and gas liquids production of no more than 750,000b/d by 2011, with the country expected to pump 765,000b/d this year.

Consumption is forecast to increase by around 2% per annum to 2011, implying demand of 474,000b/d by the end of the forecast period. The export capability would therefore be approximately 276,000b/d by 2011. Gas production is forecast to increase from last year's estimated 46bcm to 50bcm over the period, with net imports required from 2009.

In the BMI Business Environment Ranking matrix, Argentina receives a slightly lower composite score of 27, which now ranks the country sixth out of nine states included in the Latin America region. The overall business environment can be considered slightly unattractive in a regional context, thanks largely to below-average hydrocarbons growth potential and reserves-to-production ratio (RPR) offsetting respectable scores for political risk, competitive environment and licensing framework. Argentina is no longer a high priority for IOC investment, thanks to limited potential and recent government intervention in energy pricing.

Contents

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Chapter 1 - Executive Brief

Chapter 2 - SWOT Analysis

Argentina Political SWOT

Argentina Economic SWOT

Argentina Business Environment SWOT

Chapter 3 - Regional Market Overview

Latin America Region

Table: Latin America Oil Consumption (000b/d)

Table: Latin America Oil Production (000b/d)

Table: Latin America Oil Refining Capacity (000b/d)

Table: Latin America Gas Consumption (bcm)

Table: Latin America Gas Production (bcm)

Table: Latin America LNG Exports/(Imports) (bcm)

Argentina

Chapter 4 - Business Environment Rankings

Argentina

Latin America Region

Chapter 5 - Argentina Business Environment Ranking

Economics – Long-Term Risk

Politics – Long-Term Risk

Oil & Gas Growth

Oil/Gas Reserves

Licensing/Regulation

Competitive Environment

Chapter 6 - Business Environment Overview

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Red Tape

Foreign Direct Investment (FDI)

Tax Regime

Chapter 7 - Oil Market Outlook

Table: Crude Price Forecasts 2006

Revised Forecasts

Table: Oil Price Forecasts

Chapter 8 - Regional Supply and Demand

Latin America

Table: Oil Production (000b/d) – Latin America

Table: Oil Consumption (000b/d) – Latin America

Chapter 9 - Global Picture

Table: Global Oil Consumption (000b/d)

Table: Global Oil Production (000b/d)

Chapter 10 - Industry Forecast Scenario

Oil and Gas Reserves

Oil Supply and Demand

Gas Supply and Demand

Refining and Oil Products Trade

Revenues/Import Costs

Table: Argentina Oil & Gas – Historic Data & Forecasts

Other Energy

Table: Argentina Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 11 - Economic Outlook

Table: Economic Activity - Historical Data And Forecasts

Chapter 12 - Regional Case Study

Investment Needed To Fulfil Venezuelan Potential

Strategic Vision

Export Commitments

Regional Position

Chapter 13 - Competitive Landscape

Executive Summary

Table: Key Players – Argentine Oil & Gas Sector

Overview/State Role

RepsolYPF – Summary

Petrobras – Summary

Table: Key Upstream Players

Chevron – Summary

ExxonMobil – Summary

Shell – Summary

BP – Summary

Table: Key Downstream Players

Total – Summary

BG – Summary

Vintage – Summary

Apache – Summary

Chapter 14 - Company Monitor

RepsolYPF

Petrobras Energía

Company Analysis

SWOT Analysis

Chevron Argentina

Company Analysis

Pan American Energy/BP

Company Analysis

SWOT Analysis

Total Austral

Company Analysis

SWOT Analysis

Esso Petrolera Argentina

Company Analysis

SWOT Analysis

Shell Compañia Argentina de Petróleo

Company Analysis

SWOT Analysis

BG Group

Company Analysis

SWOT Analysis

Chapter 15 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Energy Industry

Cross checks

Sources

Chapter 16 - Appendix: Regional Demographic Data

Wages (ave per annum), US$

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Network of Latin American Oil & Gas Sources

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