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