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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, 06 February 19
THE BDI HAS EASED BACK TO 645 BP, ITS LOWEST LEVEL SINCE AUGUST 2016 - ALLIED
The dry bulk sector is in the doldrums, with most market participants seemingly left utterly perplexed, and simultaneously, in pursuit of any posit ...
Monday, 04 February 19
COAL STILL IN HIGH DEMAND GLOBALLY
Although the world is switching to renewable energy there is still a big demand for coal around the globe.
This is according to Cany ...
Friday, 01 February 19
ULTRAMAX WAS FIXED DELIVERY KALIMANTAN, FOR TRIP TO WEST COAST INDIA AT $7,000 - BALTIC BRIEFING
Capesize
The Vale dam tragedy sparked a sharp fall in rates across all regions even where tonnage remained tight. The potential loss of product ...
Friday, 01 February 19
SEMBCORP SELECTS NORDEN FOR LONG-TERM INDIAN CONTRACT
NORDEN A/S has signed a 10-year Panamax Contract of Affreightment (COA) with Indian utility firm Sembcorp Energy India Ltd.
From 1 A ...
Tuesday, 29 January 19
HARD COAL BEARS THE BRUNT OF THE RECOMMENDATIONS OF THE COMMISSION GROWTH STRUCTURAL CHANGE AND EMPLOYMENT - VDKI
Press Release: Hard coal bears the brunt of the recommendations of the Commission Growth Structural change and employment.
In its fi ...
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- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- Planning Commission, India
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- The University of Queensland
- Indian Energy Exchange, India
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