BMI's Executive Summary

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The latest Czech Republic Oil & Gas Report from BMI forecasts that the country will account for 3.99% of Central and Eastern European (CEE) regional oil demand by 2011, while making no material contribution to supply. CEE regional oil demand rose to an estimated 5.21mn barrels per day (b/d) last year and should average 5.35mn b/d in 2007, before reaching 5.97mn b/d by 2011. Production of an estimated 12.41mn b/d last year is forecast to reach 15.22mn b/d by 2011. CEE gas consumption in 2006 was an estimated 587bn cubic metres (bcm), with demand of 715bcm targeted for 2011. Production last year of an estimated 680bcm should reach 758bcm by the end of the period. The Czech Republic's share of consumption in 2006 was an estimated 1.53%, with no meaningful contribution to regional supply. Its share of demand is forecast to be 1.40% by the end of the forecast period.

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 per barrel (/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/bbl. 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.

Czech real GDP growth is now forecast by BMI at 5.3% for 2007, up from 6.1% in 2006. We are assuming 4.8% growth in 2008, followed by 4.7% in 2009 and 4.5% in 2010/11. Assuming an average rise in consumption of 2% per annum, below the CEE norm, oil demand will reach 238,000b/d in 2011 – implying imports of at least 234,000b/d. In spite of a privatised oil industry, there is very limited international oil company (IOC) involvement in the upstream segment to boost domestic supply of oil or gas. BMI is assuming gas demand will rise by an annual 5% from the estimated 8.7bcm in 2006 to around 111.1bcm by 2011.

In the BMI Business Environment Ranking matrix, the Czech Republic receives an unchanged composite score of 33, which now ranks the country equal fifth out of 12 states included in the CEE region, alongside Hungary. The overall business environment can be considered fairly neutral in a regional context, thanks largely to low levels of perceived economic and political risk, plus a better-than-average regulatory regime. There is very little in the way of domestic upstream oil or gas resources, which limits the Czech Republic's appeal to IOCs. However, the fuels market is growing relatively quickly, with EU membership stimulating both privatisation and liberalisation.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Czech Republic Business Environment SWOT

Czech Republic Political SWOT

Czech Republic Economic SWOT

Chapter 3 - Regional Market Overview

Central/Eastern Europe Region

Table: Central/Eastern Europe Oil Consumption (000b/d)

Table: Central/Eastern Europe Oil Production (000b/d)

Table: Central/Eastern Europe Oil Refining Capacity (000b/d)

Table: Central/Eastern Europe Gas Consumption (bcm)

Table: Central/Eastern Europe Gas Production (bcm)

Table: Central/Eastern Europe LNG Exports/(Imports) (bcm)

Czech Republic

Chapter 4 - Business Environment Rankings

Czech Republic

Central/Eastern Europe Region

Chapter 5 - Czech Republic 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

Legal Code/Corruption

Foreign Direct Investment

Tax Regime

Chapter 6 - Oil Market Outlook

Table: Crude Price Forecasts 2006

Revised Forecasts

Table: Oil Price Forecasts

Chapter 7 - Regional Supply and Demand

Central/Eastern Europe

Table: Oil Production (000b/d) – Central/Eastern Europe

Table: Oil Consumption (000b/d) – Central/Eastern Europe

Chapter 8 - Global Picture

Table: Global Oil Consumption (000b/d)

Table: Global Oil Production (000b/d)

Chapter 9 - Industry Forecast Scenario

Oil and Gas Reserves

Oil Supply and Demand

Gas Supply and Demand

Refining and Oil Products Trade

Revenues/Import Costs

Table: Czech Republic Oil & Gas – Historic Data & Forecasts

Other Energy

Table: Czech Republic Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 10 - Economic Outlook

Table: Growth And Output

Chapter 11 - Country Snapshot: Czech Republic 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 12 - Regional Case Study

Emerging Player

Table: Lukoil Investment*

Chapter 13 - Competitive Landscape

Executive Summary

Table: Key Players – Czech Oil & Gas Sector

Overview/State Role

PKN Orlen – Summary

Unipetrol – Summary

Shell – Summary

Table: Key Upstream Player

OMV – Summary

Eni – Summary

BP – Summary

ConocoPhillips – Summary

ExxonMobil – Summary

Table: Key Downstream Players

Cepro – Summary

Slovnaft – Summary

MND – Summary

Carpathian Resources – Summary

Gazprom – Summary

Chapter 14 - Company Monitor

Unipetrol

Shell Czech Republic

OMV CR

Conoco Czech Republic

Agip Praha

Moravské Naftové Doly (MND)

Chapter 15 - BMI Forecast Modelling

How we generate our industry forecasts

Energy Industry

Cross checks

Sources

Chapter 16 - Appendix: Regional Demographic Data

Table: Wages (ave labour force per annum), US$ PPP

Table: Population

Table: Household Spending Per Capita, US$

Table: Private Consumption Per Capita, US$ PPP

Table: Market Size, GDP, US$bn

Network of European Oil & Gas Sources

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BMI's European Oil & 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: