BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Oil & Gas Sector Of United Arab Emirates

The latest UAE Oil & Gas Report from BMI forecasts that the country will account for 3.55% of MEA regional oil demand by 2010, while providing 7.34% 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. The UAE’s share of consumption in 2005 was 11.66%, while its contribution to production was 10.49%. By 2010, its share of demand is forecast to be 10.69%, with the country accounting for 9.04% 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.

The UAE’s real GDP growth is now forecast by BMI at 8.3% for 2006, following 8.2% in 2005. We are assuming 8.7% growth in 2007 and 6.0% in 2008, followed by 4.5% in 2009/10. We expect oil demand to rise from 376,000b/d last year to 432,000b/d in 2010, representing 3.0% annual growth that lags appreciably our underlying economic assumptions. State-owned ADNOC is the biggest national oil company, working in partnership with major IOCs to deliver 2.76mn b/d of 2006 oil and liquids production, rising to 2.85mn b/d by the end of the forecast period – subject to OPEC quota policy. Gas production should reach 70bcm by 2010, up from 46.6bcm last year. Consumption is expected to rise from 40.4bcm to 57bcm by the end of the forecast period, allowing exports of 13bcm.

In the BMI Business Environment Ranking matrix, the UAE this quarter receives a slightly higher composite score of 43, and is now in third place out of 16 countries included in the MEA region. The overall business environment is very attractive in a regional context, thanks largely to low levels of perceived political and economic risk, plus the country's abundant oil and gas resources, and widespread participation by foreign companies. The UAE's reserves-to-production ratio (RPR) is one of the region's highest. The state is also one of the most open and Westernised Middle Eastern countries in terms of its hydrocarbons sector.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

United Arab Emirates Political SWOT

United Arab Emirates Economic SWOT

United Arab Emirates 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)

UAE

Chapter 4 - Business Environment Rankings

UAE

Middle East/Africa Region

Chapter 5 - UAE 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: UAE Oil & Gas – Historic Data & Forecasts

Other Energy

Table: UAE Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 10 - Economic Outlook

Table: Economic Indicators

Chapter 11 - Country Snapshot: UAE 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

Global Player With Conflicting Domestic Needs

Chapter 13 - Competitive Landscape

Table: Key Domestic And Foreign Companies In the UAE Oil And Gas Sector

Overview/State Role

BP – Summary

Table: Key Upstream Players

Total – Summary

ConocoPhillips – Summary

ExxonMobil – Summary

Table: Key Downstream Players

Emarat/Eppco/ENOC – Summary

Shell – Summary

Dolphin – Summary

Chapter 14 - Company Monitor

Abu Dhabi National Oil Company (ADNOC)

Dolphin Energy Ltd (DEL)

Company Analysis

Emarat – Emirates General Petroleum Corporation

Company Analysis

Emirates National Oil Company Limited (ENOC)

Company Analysis

SWOT Analysis

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

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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: