BMI's Executive Summary

[TOP]

The Sector At A Glance

Key Insights On The Oil & Gas Sector Of Iran

The latest Iran Oil & Gas Report from BMI forecasts that the country will account for 15.36% of MEA regional oil demand by 2010, while providing 10.95% 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. Iran's share of consumption in 2005 was 26.0%, while its share of production was 19.4%. By 2010, its share of demand is forecast to be 23.5%, with the country accounting for 21,3% 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.

Iranian real GDP growth is now forecast by BMI at 5.8% for 2006, following 5.4% in 2005. We are assuming 5.5% growth in 2007-08, followed by 5.8% in 2009 and 5.7% in 2010. We expect oil demand to rise from 1.66mn b/d last year to 1.87mn b/d in 2010, failing to match the underlying rate of economic expansion. State oil company NIOC is responsible for all upstream oil and gas activities, although there is some small-scale participation by IOCs on a sub-contractor basis under Iranian buyback deals. The lack of large-scale IOC investment contributes to modest output growth, with crude production forecast to increase from 4.05mn b/d in 2005 to 4.25mn b/d in 2010, subject to OPEC quotas and the possible impact of any sanctions resulting from the nuclear energy debate. Gas production should reach 165bcm by 2010, up from 87bcm last year. Consumption is expected to rise from 88.5bcm to 125bcm by the end of the forecast period, providing exports of 40bcm.

In the BMI Business Environment Ranking matrix, Iran this quarter receives a higher composite score of 25, but remains 14th of 16 countries included in the MEA region. The overall business environment is highly unattractive in a regional context, thanks largely to high levels of perceived political and economic risk, plus the country's lack of progress in terms of oil and gas industry deregulation/licensing. Iran has substantial untapped oil and gas reserves potential and is capable of delivering significant volume growth. However, opportunities for IOCs are very limited.

Contents

[TOP]

Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Iran Political SWOT

Iran Economic SWOT

Iran Business Environment SWOT

Chapter 3 - 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)

Iran

Chapter 4 - Business Environment Rankings

Iran

Middle East/Africa Region

Chapter 5 - Iran 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

Middle East/Africa

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

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

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

LNG

Refining and Oil Products Trade

Revenues/Import Costs

Table: Iran Oil & Gas – Historic Data & Forecasts

Other Energy

Table: Iran Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 10 - Economic Outlook

Table: Economic Activity

Chapter 11 - Country Snapshot: Iran 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 12 - Regional Case Study

Global Player With Conflicting Domestic Needs

Chapter 13 - Competitive Landscape

Executive Summary

Table: Key Players – Iranian Oil & Gas Sector

Overview/State Role

Table: Key Upstream Operators – Iran Oil & Gas Sector

Total – Summary

Shell – Summary

Eni – Summary

Statoil – Summary

Table: Key Downstream Operators – Iran Energy Sector

Inpex – Summary

Lukoil – Summary

PTTEP/CNPC – Summary

BP – Summary

Chapter 14 - Company Monitor

National Iranian Oil Company (NIOC)

National Iranian Oil Refining and Distribution Company (NIORDC)

Eni Iran

Total Iran

Shell Development Iran

Chapter 15 - BMI Forecast Modelling

How we generate our industry forecasts

Energy Industry

Cross checks

Sources

Chapter 16 - 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

[TOP]

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: