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Saturday, 22 June 19
OPEC'S BATTLE FOR CONTROL OF THE OIL MARKET - WOOD MACKENZIE
 Oil supply is confounding expectations. We have just raised our forecasts for non-OPEC production, the latest in a series of incremental increases. Cumulatively, we’ve increased volumes for 2025 by an astonishing 9 million b/d compared with our forecasts in 2016, the oil price nadir. Non-OPEC supply has already bounced from the 2016 low of 54 million b/d and will touch 60 million b/d this year. Our latest Macro Oils Long Term Outlook expects a peak of 66 million b/d in 2025, 5% above our forecast last year. Oil demand too has grown more quickly than expected, up 6 million b/d on 2016 forecasts.
“Did we, like many others, underestimate the industry’s ability to adapt and innovate in the face of financial adversity – and keep on producing oil? Maybe.”
Simon Flowers
Chairman and Chief Analyst
Production keeps on growing despite structurally lower oil prices and upstream investment still 40% below peak. Did we, like many others, underestimate the industry’s ability to adapt and innovate in the face of financial adversity – and keep on producing oil? Maybe. But where on earth is it all coming from? There are four main buckets.
1. US Lower 48
tight oil and NGLs together contribute 4.3 million b/d, half of the increase versus 2016. This primarily reflects the emergence of the Permian basin as the dominant tight oil play. The delineation of sweet spots, more efficient drilling, and the present shift to industrialised exploitation have led to a significant improvement in Permian well economics. Innovation has boosted expected recovery from the more mature Bakken, Eagle Ford and Scoop-Stack plays to a lesser extent. NGLs associated with the gassier parts of the Permian and shale gas plays make up about one-third of the US L48 increase.
2. Russia
Our forecasts for 2025 are 1.4 million b/d higher than three years ago, in spite of sanctions which restrict inward investment and the transfer of the latest technological advances. Rouble weakness has buoyed upstream margins in Russia since the price fell, supporting higher investment, including an intense drilling programme in deeper, low-permeability plays in West Siberia. Sanction of some greenfield projects has been deferred by Russia’s involvement in OPEC+, effectively pushing new volumes out by a few years.
3. Guyana
Only the original Liza discovery was in our 2016 forecasts. We’ve added another 0.5 million b/d by 2025, reflecting multiple subsequent deepwater discoveries. First production is due in 2020, setting Guyana on track to enter the top 12 non-OPEC producers with over 1 million b/d by the end of the decade.
4. Mature producers
Together, these have added over 2 million b/d compared with our 2016 forecasts. Colombia, UK, Norway, US (Alaska) and Canada are among a plethora of countries which have surprised on the upside. Cost cutting, efficiencies, reduced maintenance outages, high-grading and streamlining of new projects, new discoveries tied into existing infrastructure and, in some cases, reduced tax rates have combined to slow decline rates and boost production. There are valid questions whether production from ultra-mature basins is sustainable at these rates, or volumes are merely being accelerated. As a result , some of these producers are slated to see steeper declines.
Non-OPEC supply won’t grow at this rate forever
In fact, Non-OPEC supply stops after 2025 as tight oil plateaus, with decline setting in by 2030. In the meantime, the OPEC+ strategy to boost revenues by constraining production and buoying up price has helped its competitors boost production and gain market share.
We estimate non-OPEC production will swallow up 4.3 million b/d, or 76%, of contestable demand over the next five years. OPEC’s scope to increase volumes through this period is limited to just 1.3 million b/d. The maths sits at odds with Abu Dhabi, Kuwait and Iraq which are investing heavily in new capacity. Some producers in OPEC do see flat or declining volumes in this period.
Major supply outages are helping OPEC+ to balance the market today. Disruptions are set to leap to a record 5 million b/d later this year, including 2.5 million b/d from Iran (sanctions) and Venezuela (economic meltdown and US sanctions). It may suit the rest of OPEC, as well as the US, if exports from Iran and Venezuela are kept off the market for some years – at least until non-OPEC production growth shows signs of abating.
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Monday, 23 September 19
CHINA RECORDS SLOWER GROWTH IN COAL PRODUCTION - XINHUA
The growth of China’s raw coal production slowed down in August, data from the National Bureau of Statistics (NBS) showed.
Aro ...
Friday, 20 September 19
INDIA TO INVITE BIDS FOR COMMERCIAL COAL MINING IN DECEMBER - MINISTER FOR COAL
India aims to begin the process of holding the first round of commercial coal mining auctions December end, Minister for Coal, Mines and Parliament ...
Friday, 20 September 19
INDIA: ECONOMIC SLOWDOWN IMPACTS COAL IMPORT CARGO IN H1 FY20 - PTI
Economic slowdown has impacted coal import cargo in the first half of this fiscal, as overall cargo growth at major ports registered a marginal gro ...
Wednesday, 18 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
During the first week of September, I had the privilege of attending the Donsö Shipping Meet 2019, in Donsö, a small island of around 1,& ...
Tuesday, 17 September 19
PANAMA SHIP REGISTRY MODERNIZES SHIP REGISTRATION
The Panama Ship Registry has announced it will integrate in a single platform “Electronic Ship Registration System (ESRS)” the present ...
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- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Planning Commission, India
- Commonwealth Bank - Australia
- The University of Queensland
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Cement Manufacturers Association - India
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