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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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Thursday, 10 January 19
BUNKER DELIVERY NOTE AMENDMENTS ENTER INTO FORCE AS SULPHUR 2020 REQUIREMENT LOOMS - IMO
KNOWLEDGE TO ELEVATE
Amendments to the bunker delivery note relating to the supply of marine fuel oil to ships which have fitted alternative m ...
Thursday, 10 January 19
WORLD TRADE IN THERMAL COAL IS ESTIMATED TO HAVE GROWN BY 1.0 PER CENT IN 2018 - DEPARTMENT OF INDUSTRY, AUSTRALIA
World Trade
World trade in thermal coal is estimated to have grown by 1.0 per cent to 1.1 billion tonnes in 2018 but it is expected to decline ...
Thursday, 10 January 19
PAKISTAN'S COAL IMPORTS TO SURGE TO 30 MILLION TONS PER ANNUM BY 2020 - CEO, PIB
Pakistan’s coal imports are estimated to surge to 30 million tons/annum from existing 20 million tons/annum by the year 2020, given the plann ...
Wednesday, 09 January 19
PANAMAX: THE PACIFIC SAW RELATIVELY GOOD DEMAND PARTICULARLY FROM INDONESIA AND NOPAC - BALTIC BRIEFING
Capesize
It was an active start to the New Year, with trading from West Australia maintaining momentum during the holiday period. Rates for Chi ...
Wednesday, 09 January 19
SHIPPING MARKET INSIGHT - INERMODAL
Paraphrasing the words of a Chief economist in a latest report of the World Bank Group, the current state of the shipping market very much resemble ...
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- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Australian Coal Association
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- The University of Queensland
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Parliament of New Zealand
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Marubeni Corporation - India
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