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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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Tuesday, 17 September 19
THE DRY BULK FREIGHT MARKET IS ALREADY ON A DOWNWARD CORRECTION - ALLIED
Here we are again, just a breath before the final quarter of the year. Under typical circumstances and on the basis of what we have seen during the ...
Monday, 16 September 19
COLOMBIAN COAL PRODUCTION TO FALL 5% THIS YEAR, MINING GROUP SAYS - REUTERS
Colombia’s coal production will decline to around 80 million tonnes in 2019, nearly 5% below last year’s, because of low prices and dro ...
Monday, 16 September 19
THE COAL-D SHOULDER? - BALTIC EXCHANGE
Good fortune and the number 13 don’t usually go hand in hand, but when it comes to coal, 2013 actually seems to have been the commodity&rsquo ...
Monday, 16 September 19
SCRUBBERS AND FUEL PROFIT SHARE CLAUSES - CLYDE&CO
From 1 January 2020, Regulation 14 of MARPOL Annex VI provides that the sulphur content in fuel oil used on board ships shall be reduced from a max ...
Monday, 16 September 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR MAX 1,290,000 METRIC TONS OF STEAMING COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd has issued an international tender for total 1,290,000 Metric Tons steam coal.
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- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- White Energy Company Limited
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Planning Commission, India
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
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