Middle Eastern oil and gas

Bahrain

There has been limited success in boosting oil and gas production from the Bahrain field, however BMI has said that the key development area for the country will be in the refining sector, especially the expansion of the Sitra refinery. Yet, this isn’t reportedly without problems as delays to the expansion result in a continuation of fuel export declines and a widening of the country’s fiscal deficit until 2020. There are other construction plans in the country for an LNG receiving terminal, but BMI believes that this is still a long way from realisation.

Looking a bit more closely at gas, BMI has reported that Bahrain does not import or export gas, but relies solely on domestic production to meet rising consumption. There are plans for pipeline imports from Iran and Qatar but these are yet to materialise and the country is indeed looking towards an LNG terminal.

Iraq

This year, a temporary agreement between Erbil and Baghdad has allowed oil exports from Ceyhan, boosting production. However, BMI has said that due to disruption caused by IS and lower oil prices, long term production forecasts have been lowered. Investment in the country is also being limited due to the lower oil prices and capital expenditure is being curbed, putting a great focus on high margins projects. This is resulting in Iraq’s fee/bbl contracts becoming very unattractive.

BMI has revised its 2014 oil production forecast from 3.3 million bpd to 3.14 million bpd due to the disruption and violence in the region. In the long term, BMI has also reduced its production outlook to 2018 dropping from 4.1 million bpd to 3.7 million bpd. The 2023 forecast is also lowered from 4.2 million bpd to 3.7 million bpd. For the refining sector, the turbulence around the Baiji refinery has seen production problems at the plant since mid 2014 and this is expected to continue in to this year.

Oman

BMI has said that unless significant discoveries are made in the short term, this year will see the gradual but inevitable decline of oil reserves in Oman. The country’s crude production levels are then expected to reach a peak in 2017, with total hydrocarbon production hitting its zenith in 2020. There will be small increases in domestic consumption of oil in Oman, however this will be aggravated by the decreasing returns from EOR efforts.

The natural gas market in Oman is felt to have much more opportunity. BMI has reported that it will have a greater role in the regional and broader Asian natural gas market and the future of Omani-Iranian cooperation will have a major impact on the domestic gas industry.

Pakistan

To 2023, BMI expect to see Pakistan’s oil and gas reserves fall due to over utilisation and a lack of new discoveries. The gas side of things looks slightly brighter as the Elengy Terminal Pakistan Limited LNG terminal comes online. However, BMI has commented that this facility is likely to be underutilised until beyond 2016 due to contracting and financing constraints.


Adapted from report briefs by Claira Lloyd

Published on 26/05/2015


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