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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, 17 April 19
LNG WESTERN AFRICA CONFERENCE 2019
The only LNG Focus Platform to Accelerate Investment and Cooperation in Western African Countries
LNG Western Africa Conference 2019 ...
Saturday, 13 April 19
IMO 2020 - DON'T SCRUB IT! - IVAR MYKLEBUST
KNOWLEDGE TO ELEVATE
Höegh Autoliners stands firm on its decision not to implement scrubbers but comply with the IMO 2020 regulations by ...
Saturday, 13 April 19
CAPESIZE: WEST AUSTRALIA TO CHINA IRON ORE CARGOES LIFTING FROM $4.60 PMT TO ABOVE $5.00 - BALTIC BRIEFING
Capesize
The market saw a steep ascent from the depths of last week. The Baltic Capesize Index (BCI) 5TC opened on Monday at $5,099, although b ...
Friday, 12 April 19
OIL MARKET REPORT: MIXED SIGNALS - IEA
The huge increase in oil production we saw in 2H18 has reversed following the implementation of the new Vienna Agreement and the increasing effecti ...
Friday, 12 April 19
OFFSHORE MENA CONGRESS 2019
Offshore MENA Congress 2019
Event Date : 11-12th Jun. 2019
Location : Cairo, Egypt
Offshore MENA Congress 2019 Offshor ...
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- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Agrawal Coal Company - India
- PTC India Limited - India
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Ministry of Mines - Canada
- The University of Queensland
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Thiess Contractors Indonesia
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
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