Oil and gas
Hungary is nearly 100% reliant on Russia for its petroleum and BMI has said that the country needs to address this due to the widening economic aftershocks of the Russia/Ukraine situation.
When it comes to gas, consumption and production are both on the decline. BMI forecast domestic production of 2.1 billion m3 this year and consumption is going to fall to 9.9 billion m3. A enfeebled economy is causing the company to forecast continued declines in demand through 2018 when gas consumption is going to drop to 9.5 billion m3/d. However domestic production is expected to follow this trend too. BMI sees a widening shortfall between domestic supply and demand and expects the country to produce approximately 20% of its requirements, with only 2 billion m3/d coming from in country wells. The drop is expected to continue before flattening out at 1.6 billion m3 in 2021. There is however an upside, and BMI has said that overall, gas reserves are expected to increase by 21.7% last year, with new discoveries of recent years being booked. However, the country’s overall natural gas reserves are very small, at 9.9 billion m3, the equivalent of 4 years of production at current depressed levels.
Looking at oil, BMI has said that there is the same story of declining demand and concurrent production which has been brought about by a weak economy and a lack of significant new domestic recoveries. BMI forecast daily production for last year to come in at 65 400 boe/d. This represents a year on year decline of 3.7%. This rate is anticipated to run each year until 2012 when wells in the country will be producing only 48 900 boe/d. Hungary’s modest reserves of 24 million bbls will drop precipitously over the next decade, according to BMI, to just 10.5 million bbls by 2022 without a major and so far unforeseen reversal of exploration fortune. In a nutshell, Hungary has total reserves equal to two days of Saudi oil production.
For refining, there is some upside reported by BMI. The company forecasts steady production of refined products to marginally rise to 181 000 bpd, leaving 55 000 bpd to export once domestic demand levels of 125 5000 bpd are met. The incremental improvement in utilisation rates, BMI said, is something that will continue for the next three years at least. It is said to be a reflection of a modern, well managed midstream sector in the country.
BMI has said that growth in Hungary’s automotive industry is going to support petrochemicals production, however, the weakening domestic environment gives cause for concern particularly in relation to the crucial construction sector. The company anticipates that this year, Hungary will continue to have olefins production capacities of 660 000 tpy ethylene and 400 000 tpy propylene. It is also forecasting polymer capacities of 400 000 tpy of HDPE, 210 000 tpy of LDPE, 650 000 tpy of PP and 440 000 tpy of PVC. Over the long term, the Hungarian petrochemical industry’s ability to grow its exports will be constrained by capacity.
Edited from report briefs by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/refining/12022015/oil-gas-petchem-hungary-bmi/