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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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Wednesday, 15 May 19
SHIPPING MARKET INSIGHT - THEODORE NTALAKOS
Modern warfare - Trade wars & sanctions
As of May 1st, the U.S. has ended waivers to the sanctions that had allowed the top buyers of Irani ...
Monday, 13 May 19
INDONESIAN COAL PRICE REFERENCE CONTINUES TO FALL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Monday, 13 May 19
SUPRAMAX: SOUTHEAST ASIA THE MARKET SAW BETTER DEMAND - BALTIC BRIEFING
Cape
The market continued its rollercoaster ride last week opening with negative sentiment, but turning around in dramatic fashion by the week& ...
Thursday, 09 May 19
DEEP OFFSHORE SOUTHEAST ASIA CONGRESS 2019
Deep Offshore Southeast Asia Congress 2019
Event Date:2-3th July. 2019t
Location: Jakarta, Indonesia
Sarawak Shell Berhad (S ...
Thursday, 09 May 19
OFFSHORE CARIBBEAN CONGRESS 2019
Offshore Caribbean Congress 2019
Event Date: 4-5th July. 2019t
Location: Georgetown, Guyana
Hess announced a new d ...
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- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Planning Commission, India
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Xindia Steels Limited - India
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
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