BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Oil & Gas Sector Of France

The latest France Oil & Gas Report from BMI forecasts that the country will account for 13.8% of developed European regional oil demand by 2010, while making no appreciable contribution to supply. In Developed Europe, overall oil consumption reached 14.18mn barrels per day (b/d) in 2005. It is set to rise to around 14.83mn b/d by 2010. In terms of natural gas, the Developed Europe region last year consumed 436bn cubic metres (bcm), with demand of 519bcm targeted for 2010, representing 19.2% growth. Production of 282bcm in 2005 should fall to 277bcm in 2010, which implies net imports rising from last year's 154bcm to some 242bcm by the end of the period. France's share of gas consumption in 2005 was 10.3%, while it has no share of production. By 2010, its share of gas consumption is forecast to be 9.1%.

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.

French real GDP growth is now forecast by BMI at 2.4% for 2006, up from 1.2% in 2005. We are assuming 2.2% growth in 2007 and 2.3% in 2008, followed by 2.1% in 2009 and 2.0% in 2010. France expects oil consumption to rise with increased economic activity, but the annual growth rate is unlikely to exceed 1.0% over the next few years. Our GDP growth assumptions point to oil consumption reaching 2.04mn b/d by 2010. Crude oil imports are expected to have reached 2.03mn b/d by 2010, with domestic crude oil production falling from 22,000b/d to around 15,000b/d over the period. Gas demand is expected to rise more quickly than for oil, with new sources of supply being lined up by Gaz de France (GdF), which has signed import agreements with Egypt in addition to those with Russia, Norway, Algeria and the Netherlands. Gas consumption is likely to have reached 47.3bcm by 2010. Production is negligible, so imports will rise significantly to almost 46bcm.

France's long-term political risk score is 84.2, putting it above Italy and below the UK, but well above the global average of 62.9 and the regional average of 72.5. The long-term economic rating is 71.6, which is in line with that of Belgium and compares with a global average of 60.8 and the regional average of 61.4. The business environment rating is 65.5, just above that of Spain. France has a fully privatised and competitive oil and gas industry. The remaining state holdings are in electricity and gas suppliers Électricité de France (EdF) and GdF, where the privatisation process is under way. The upstream and downstream oil segments are de-regulated, with considerable international oil company (IOC) involvement in refining and distribution, even though former state company Total has the greatest market share.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Regional Market Overview

Developed Markets

Table: Developed Markets Oil Consumption (000b/d)

Table: Developed Markets Oil Production (000b/d)

Table: Developed Markets Oil Refining Capacity (000b/d)

Table: Developed Markets Gas Consumption (bcm)

Table: Developed Markets Gas Production (bcm)

Table: Developed Markets LNG Imports/(Exports) (bcm)

France

Chapter 3 - Oil Market Outlook

Table: Crude Price Forecasts 2006

Revised Forecasts

Table: Oil Price Forecasts

Chapter 4 - Regional Supply and Demand

North West & Mediterranean Europe

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

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

Chapter 5 - Global Picture

Table: Global Oil Consumption (000b/d)

Table: Global Oil Production (000b/d)

Chapter 6 - 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: France Oil & Gas – Historic Data & Forecasts

Other Energy

Table: France Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 7 - France Macroeconomic Outlook

Table: France - Macroeconomic Forecasts

Chapter 8 - Country Snapshot: France 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

Table: Wages per year

Chapter 9 - Regional Case Study – Norsk Hydro

Table: Norsk Hydro Statistics

Chapter 10 - Competitive Landscape

Executive Summary

Table: Key Players – France Oil And Gas Sector

Overview/State Role

Table: Key Upstream Players

Table: Key Downstream Players

Chapter 11 - Company Monitor

Total

BP

Royal Dutch Shell

Chapter 12 - BMI Forecast Modelling

How we generate our industry forecasts

Energy Industry

Cross checks

Sources

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: