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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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Tuesday, 18 December 18
TOBA BARA ACQUIRES SHARES OF PT BATU HITAM PERKASA
PT Toba Bara Sejahtra Tbk, through its subsidiary PT Toba Bara Energi (“TBE”), has acquired shares ...
Monday, 17 December 18
SUPRAMAX THERE WAS STRONGER DEMAND FROM SOUTHEAST ASIA, WITH MORE COAL BEING SHIPPED - BALTIC BRIEFING
Capesize
A positive end to last week after a somewhat uncertain start as some gains made were eroded. Rates recovered later for West Australia/ ...
Monday, 17 December 18
SOUTH KOREA STATE-OWNED UTILITY KOREA EAST-WEST POWER CO. LTD ISSUED A TENDER FOR MAX 3.220 MILLION TONS OF 4200 TO 5900 NAR COAL
COALspot.com: South Korea state-owned utility Korea East-West Power Co. Ltd (EWP) issued a tender for max 3,220,000 Metric Tons of coal to be loade ...
Saturday, 15 December 18
COMING CHANGES IN MARINE FUEL SULFUR LIMITS WILL AFFECT GLOBAL OIL MARKETS - EIA
International regulations limiting sulfur in fuels for ocean-going vessels, set to take effect in January 2020, have implications for vessel operat ...
Friday, 14 December 18
KOSPO INVITED BIDS FOR 320,000 MT OF LOW CALORIFIC VALUE COAL
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,300 kcal/kg NCV coal per ...
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- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- The University of Queensland
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Marubeni Corporation - India
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Romanian Commodities Exchange
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