The latest Gabon Oil & Gas Report from BMI forecasts that the country will account for 0.47% of African regional oil demand by 2015, while providing 1.86% of supply. African regional oil use of 3.06mn barrels per day (b/d) in 2001 rose to an estimated 3.63mn b/d in 2010. It should average 3.62mn b/d in 2011 and then rise to around 4.09mn b/d by 2015. Regional oil production was 8.08mn b/d in 2001, and in 2010 averaged an estimated 10.74mn b/d. After dropping to an estimated 9.66mn b/d in 2011 because of the loss of Libyan volumes, it is set to rise to 12.91mn b/d by 2015. Oil exports are growing steadily, because demand growth is lagging behind the pace of supply expansion. In 2001, the region was exporting an average of 6.02mn b/d. This total rose to an estimated 8.15mn b/d in 2010 and is forecast to reach 9.85mn b/d by 2015. Nigeria has the greatest production growth potential, with Angolan exports also set to climb significantly.

In terms of natural gas, the region in 2010 consumed an estimated 120.6bn cubic metres (bcm), with demand of 162.3bcm forecast for 2015. Production of an estimated 208.7bcm in 2010 should reach 295.2bcm in 2015, which implies net exports rising from an estimated 105bcm to 151bcm in 2015. In 2010, Gabon consumed an estimated 0.17% of the region's gas, with its market share forecast at 0.15% by 2015. It contributed an estimated 0.10% to 2010 regional gas production and by 2015 will account for 0.08% of supply.

The 2010 full-year outturn was US$77.45/bbl for OPEC crude, which delivered an average for North Sea Brent of US$80.34/bbl and for West Texas Intermediate (WTI) of US$79.61/bbl. The BMI price target of US$77 was reached thanks to the early onset of particularly cold weather, which drove up demand for and the price of heating oil during the closing weeks of the year.

Taking into account the risk premium that has been added to crude prices in response to actual and perceived threats to supply, we have now raised our benchmark OPEC basket and Brent price forecasts. We expect Brent crude to average US$106/bbl in 2011, with OPEC basket averaging US$101.90/bbl. Mid-year increases in supply present downside risks to this forecast. In 2012, we expect OPEC basket to average US$95/bbl, with Brent averaging US$97.6/bbl.

The unprecedented wave of popular uprisings in the Middle East and North Africa (MENA) that followed the removal of Tunisian President Ben Ali on January 14 has obviously fundamentally altered our outlook, particularly since the unrest spread to Libya in mid-February. Global GDP growth in 2011 is forecast at 3.5%, down from 4.3% in 2010. Growth in the US is now expected to slow down, but growth in the eurozone should be marginally higher than last year, while Chinese economic expansion will slow and Japan's growth will slump to 0.7% as a result of the devastating earthquake and tsunami in March 2011. Our oil price forecast for 2011 is US$101.90/bbl for the OPEC Basket, putting Brent at US$106/bbl and West Texas Intermediate (WTI) at US$95.30, although these differentials are subject to change.

Gabon's real GDP rose by an estimated 3.2% in 2010. We are forecasting average annual growth of 4.4% in 2010-2015. We expect oil demand to rise from an estimated 16,230b/d in 2010 to 19,930b/d in 2015. State oil company Societe Nationale Petroliere Gabonaise (SNPG) operates in partnership with various international oil companies (IOCs). Combined oil and gas liquids output is forecast to increase from an estimated 246,000b/d in 2010 to a peak of 255,000b/d in 2012, before easing to 240,000b/d by 2015. Gas production should rise only slightly to 0.25bcm by 2015, up from an estimated 0.2bcm in 2010. Consumption is expected to follow the production trend, with no need for imports but no surplus gas to export.

Between 2010 and 2020, we are forecasting a decline in Gabon's oil and gas liquids production of 12.2%, with volumes peaking at 255,000b/d in 2012, before falling steadily to 217,000b/d by the end of the 10- year forecast period. Oil consumption between 2010 and 2020 is set to increase by 62.9%, with growth slowing to an assumed 5.0% per annum towards the end of the period and the country using 22,580b/d by 2020. Gas production is expected to be just under 0.3bcm by the end of the period. With demand rising by 150% between 2010 and 2020, there should be a balanced market, with no need for imports or scope for exports. Details of BMI's 10-year forecasts can be found in the appendix to this report.

Gabon now shares sixth place with Ghana and Angola in BMI's composite Business Environment ratings (BER) table, which combines upstream and downstream scores. The country holds second place behind Libya in our updated upstream BER and may struggle to defend its position over the medium term as the presence of Ghana and Nigeria below threatens. The county's score benefits from healthy gas output growth prospects, a particularly high gas reserves-to-production ratio (RPR) and attractive licensing terms. The country's risk environment is fragile, but this is hardly uncommon in Africa. Gabon is near the bottom of the league table in BMI's updated downstream ratings, with no high scores and progress unlikely unless the energy market grows rapidly or new refineries are built. It shares eighth place with Cameroon thanks to low scores for refining capacity, oil and gas demand, likely refining capacity expansion, nominal GDP and population.

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