BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Oil & Gas Sector Of Spain

The latest Spain Oil & Gas Report from BMI forecasts that the country will account for 11.9% 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. Spain's share of gas consumption in 2005 was 7.3%, while it has no meaningful share of production. By 2010, its share of gas consumption is forecast to be 10.0%.

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.

Spanish real GDP growth is now forecast by BMI at 3.5% for 2006, unchanged from 2005. We are assuming 3.0% growth in 2007, 2.9% in 2008, followed by 2.8% in 2009 and 2010. In terms of oil demand, the Spanish market continues to grow more rapidly than the EU norm, with 2.0% annual consumption growth forecast over the medium term. Oil consumption has risen from just over 1mn b/d in 1990 to last year’s 1.62mn b/d. Our target for 2010 is demand at an average 1.77mn b/d. No meaningful local oil supply is available, with crude imports reaching almost 1.77mn b/d by 2010. Our gas demand forecast is for an average annual growth rate of near 10%, taking the 2010 total consumption to at least 52bcm.

The long-term political score is 78.3, well above the global average of 62.9 and the regional average of 72.5, but the lowest among the ratings for developed European countries. The long-term economic rating is 71.0, which compares with a global average of 60.8 and the regional average of 61.4, putting Spain ahead of Germany and Italy. The business environment rating is 65.0, just behind that of France. The regional average is 57.1. Spain has a privatised energy sector operating under EU guidelines. There is a very small upstream oil and gas segment, dominated by domestic companies. Downstream oil is controlled largely by former state company RepsolYPF.

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)

Spain

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 and Gas Supply and Demand

LNG

Refining and Oil Products Trade

Revenues/Import Costs

Table: Spain Oil & Gas – Historic Data & Forecasts

Other Energy

Table: Spain Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 7 - Spain Macroeconomic Outlook

Table: Spain – Macroeconomic Forecasts

Chapter 8 - Country Snapshot: Spain 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 – Spanish Oil & Gas Sector

Overview/State Role

Table: Key Downstream Players

Chapter 11 - Company Monitor

RepsolYPF

Gas Natural

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: