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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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Friday, 08 March 19
KOMIPO INVITES BIDS FOR 2.6 MILLION TONS OF AUSTRALIAN 5700 NAR COAL FOR FIVE YEARS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Australian origin to be burnt ...
Friday, 08 March 19
CHINA'S COAL DEMAND FORECAST TO DROP SLOWLY - YONHAP
China’s coal demand is expected to fall at a snail’s pace over the next 20 years due to the country’s preference for the cheap fo ...
Thursday, 07 March 19
INDONESIAN COAL PRICE REFERENCE PLUNGE TO LOWEST IN SEVEN MONTHS
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 March 19
KOSPO INVITES BIDS FOR 80,000 MT OF 3800 NCV COAL FOR 21 - 30 MARCH, 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 80,000 MT of min 3,800 kcal/kg NCV low calor ...
Wednesday, 06 March 19
KOREA SOUTHERN POWER CO INVITES BIDS FOR 980,000 MT OF 4600 NCV COAL FOR THREE YEARS
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,600 kcal/kg NCV low calo ...
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- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- PTC India Limited - India
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Parliament of New Zealand
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
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