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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, 24 June 19
KOMIPO INVITED BITUMINOUS COAL BIDS FOR BORYEONG & SHIN BORYEONG POWER PLANTS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 260,000 MT MT of min. 5700 NAR coal and 240,000 MT of min. 4,600 k ...
Sunday, 23 June 19
SUPRAMAX: A 56,000-DWT WAS FIXED FROM INDONESIA TO VIETNAM AT $10,000 - BALTIC BRIEFING
Capesize
The story over the past week has been largely Atlantic dominated as the basin’s uniquely volatile characteristics came into play ...
Friday, 21 June 19
INDONESIA'S BAYAN RESOURCES SIGNED A COAL SUPPLY AGREEMENT WITH THE BANGLADESH BCPCL TO SUPPLY 23 MILLION TONS OF COAL FOR 10 YEARS
On Monday, 17th June 2019, PT. Bayan Resources signed a Coal supply Agreement with the Bangladesh- China Power Company (Pvt.) Limited. BCPCL is a j ...
Thursday, 20 June 19
BUMI RESOURCES EXPECTS TO SELL 42 MILLION TONS OF COAL IN FIRST HALF - JAKARTA POST
PT Bumi Resources (BUMI), Indonesia's largest thermal coal miner, expects to close the first half of this year with coal sales of 42 million to ...
Tuesday, 18 June 19
TANKER SHIPPING: WHILE WE WAIT FOR 2020 TO KICK IN, IT'S ALL ABOUT POLITICS - BIMCO
Demand drivers and freight rates
Iran, Libya and Venezuela face export limitations because of sanctions and internal political troubles. At the s ...
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- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- PTC India Limited - India
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Indogreen Group - Indonesia
- The University of Queensland
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Aditya Birla Group - India
- Wilmar Investment Holdings
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