BMI's Executive Summary

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The latest Pakistan Oil & Gas Report from BMI forecasts that the country will account for just 1.54% of Asia Pacific regional oil demand by 2011, while providing 0.79% of supply. Asia Pacific regional oil use of 21.4mn barrels per day (b/d) in 2001 reached 24.84mn b/d last year. It should average 25.68mn b/d in 2007 and then rise to around 29.04mn b/d by 2011. In terms of natural gas, the region last year consumed 409bcm, with demand of 620bcm targeted for 2011, representing growth of 51.4% between 2006 and 2011. Production of 329bcm in 2006 should reach 478bcm in 2011 (+45.0%), but implies net imports rising from 80bcm per annum to 142bcm. Pakistan's share of gas consumption in 2006 was an estimated 7.50%, while its share of production was 9.32%. By 2011, its share of gas consumption is forecast to be 7.98%, with the country accounting for 9.42% of supply.

Global oil demand growth is expected to be around 2.0% this year, with Asia Pacific and the CEE regions dominating. This is an encouraging rate of market expansion, given a relatively uncertain economic picture and high commodity prices. Our oil price projections for 2007 as a whole are revised upwards from the last quarterly report. We are now assuming an OPEC basket price average of US$59 per barrel, compared with the US$55 estimate provided by our last two quarterly reports. Based on recent price differentials, this implies Brent at US$62.83, WTI averaging US$61.25/bbl, and Urals at US$59.42/bbl.

Real gross domestic product (GDP) growth for 2007 is now forecast by BMI at 6.4%, down from 6.6% last year. In 2008, growth is put at 6.6%, followed by 6.7% in 2009/10 and 6.8% in 2011. Several statecontrolled oil and gas companies are in the throes of privatisation, and already work with IOCs in the upstream segment. We are assuming oil and gas liquids production of no more than 63,000b/d by 2011, with the country able to pump an estimated 55,000b/d this year. Consumption is forecast to increase by around 4% per annum to 2011, implying demand of 448,000b/d by the end of the forecast period. The import requirement would therefore be approximately 385,000b/d by 2011. Gas demand is set to rise from 30.7bcm last year to 49.4bcm by 2011.

In the BMI Business Environment Ranking matrix, Pakistan receives an unchanged composite score of 30 which now ranks the country equal ninth out of 14 states included in the Asia Pacific region, alongside the Philippines. The overall business environment can be considered unattractive in a regional context, thanks to a high level of perceived economic and political risk offsetting better-than-average volume growth. Privatisation is now moving ahead rapidly, with an improving regulatory regime and a better competitive landscape. Large-scale opportunities for IOCs are limited, which means Pakistan will become of increasingly less importance to the major energy groups.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Pakistan Economic SWOT

Pakistan Political SWOT

Pakistan Business Environment SWOT

Chapter 3 - Regional Market Overview

Asia/Pacific Region

Table: Asia/Pacific Oil Consumption (000b/d)

Table: Asia/Pacific Oil Production (000b/d)

Table: Asia/Pacific Oil Refining Capacity (000b/d)

Table: Asia/Pacific Gas Consumption (bcm)

Table: Asia/Pacific Gas Production (bcm)

Table: Asia/Pacific LNG Exports/(Imports) (bcm)

Pakistan

Chapter 4 - Business Environment Rankings

Pakistan

Asia/Pacific Region

Chapter 5 - Pakistan 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/Corruption

Foreign Direct Investment

Tax Regime

Chapter 7 - Oil Market Outlook

Assessing The Risks

Table: Crude Price Forecasts 2007

Revised Forecasts

Table: Oil Price Forecasts

Chapter 8 - Regional Supply and Demand

Asia/Pacific

Table: Oil Production (000b/d) – Asia/Pacific

Table: Oil Consumption (000b/d) – Asia/Pacific

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

Refining and Oil Products Trade

Revenues/Import Costs

Table 14: Pakistan Oil & Gas – Historical Data & Forecasts

Other Energy

Table: Pakistan Other Energy – Historical Data & Forecasts

Key Risks to Forecast Scenario

Chapter 11 - Economic Outlook

Table: GDP And Population

Chapter 12 - Regional Case Study – ConocoPhillips

Table: Exploration And Production 2005

Table: Commercial Realisation – Refining And Marketing 2005

Chapter 13 - Competitive Landscape

Executive Summary

Table 17: Key Players – Pakistan Oil & Gas Sector

Overview/State Role

PPL – Summary

BP – Summary

Table 18: Key Upstream Players

PEL – Summary

Mari Gas – Summary

PSO – Summary

Table 19: Key Downstream Players

Shell Pakistan – Summary

Chevron – Summary

Eni – Summary

Premier Oil – Summary

National Refinery – Summary

Others – Summary

Chapter 14 - Company Monitor

Oil and Gas Development Company (OGDC)

Pakistan Petroleum Ltd (PPL)

Pakistan State Oil Company Ltd (PSO)

Shell Pakistan

Chapter 15 - BMI Forecast Modelling

How we generate our industry forecasts

Energy Industry

Cross checks

Sources

Network of Asian Oil & Gas Sources

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BMI's Asian 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: