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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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Monday, 26 November 18
SUPRAMAX: THE ASIAN MARKET STALLED THIS WEEK WITH A BUILD-UP OF TONNAGE - BALTIC BRIEFING
Capesize
It was a positive end to the week, with West Australia/China making significant gains and firing owners’ resolve. There was talk ...
Friday, 23 November 18
GOLDEN ENERGY'S POTENTIAL ACQUISITION OF STANMORE CREDIT POSITIVE - FITCH RATINGS
Golden Energy and Resources Limited's (GEAR, B+/Positive) potential acquisition of Stanmore Coal will help the company diversify its coal opera ...
Friday, 23 November 18
ASSOCIATION CALLS FOR REVISION OF DMO SCHEME FOR COAL - JP
The Indonesian Coal Mining Association (APBI) has called on the government to revise the domestic market obligation (DMO) scheme for coal, which re ...
Friday, 23 November 18
INDONESIA'S REVENUES FROM MINERAL AND COAL INCREASE TO US$ 2.858 BILLION - ANTARA
Indonesia`s non-tax state revenues from the mineral and coal sub-sector reached Rp 41.77 trillion (approximately US$ 2.858 Billion) as of Nov 16, 2 ...
Thursday, 22 November 18
SHUT OUT OF CHINA, U.S. COAL EXPORTERS FIND FAVOUR IN INDIA, FOR NOW - REUTERS
U.S. coal exporters have effectively lost a promising market in China since the imposition of tariffs as part of the ongoing trade dispute, but so ...
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- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- The University of Queensland
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
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