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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, 08 April 19
SULPHUR 2020 - COUNTDOWN TO THE SWITCHOVER - LLOYD'S REGISTER
Sulphur 2020 (MARPOL Annex VI Reg. 14.1.3) is still dominating headlines and as we draw closer to the 1 January 2020 deadline it’s clear that ...
Monday, 08 April 19
INDONESIAN COAL PRICE REFERENCE PRICE PLUMMETS TO LOW NOT SEEN SINCE AUGUST 2017
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Sunday, 07 April 19
SHIP PASSAGE PLANS - NO ROOM FOR ERROR! - WATSON FARLEY & WILLIAMS
KNOWLEDGE TO ELEVATE
The English High Court’s judgment in Alize 1954 v Allianz Elementar Versicherungs AG (The CMA CGM Libra) is an impo ...
Sunday, 07 April 19
IMO 2020: READY OR NOT? - WOOD MACKENZIE
New Year’s Day 2020 is firmly marked in the calendar as the refining and shipping industries prepare for change.
The International Marit ...
Saturday, 06 April 19
AUSTRALIA COAL POSTS BIGGEST WEEKLY DROP IN A DECADE AMID WEAK DEMAND - REUTERS
Australian thermal coal prices this week registered their biggest weekly fall since the financial market turmoil of a decade ago as demand plunged ...
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- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- The University of Queensland
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- PTC India Limited - India
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
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