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