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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, 21 November 18
SHIPPING MARKET INSIGHT - DIMITRIS KOURTESIS
Halfway through the fourth and last quarter of the year, we spot a significant change in freight rates for tankers trading dirty, as well as on the ...
Tuesday, 20 November 18
FREIGHT RATES IN THE CRUDE OIL MARKET HAVE ALREADY PICKED UP OVER THE PAST COUPLE OF WEEKS - YIANNIS VAMVAKAS
Current geopolitical developments between Iran and the US, which have led the latter to re-impose its sanctions, have significantly affected oil pr ...
Tuesday, 20 November 18
GOLDEN ENERGY AND RESOURCES LEADS A$249M BID FOR AUSTRALIA-LISTED STANMORE COAL - THE STRAITS TIMES
Singapore-listed Golden Energy and Resources (GEAR) is leading deals worth up to A$249 million (S$250 million) to acquire Australia-listed Stanmore ...
Monday, 19 November 18
INDONESIA'S LEADING EIGHT COAL MINER'S COAL MINING CONTRACTS ARE EXPECTED TO EXPIRE BETWEEN YEAR 2019 - 2025
The Ministry of Energy and Mineral Resources (ESDM) said, eight Coal Contract of Works (CCoW) will expected to expire between 2019 to 2026, Liputan ...
Monday, 19 November 18
SUPRAMAX: THE BSI CONTINUED TO FALL LAST WEEK, ESPECIALLY THE ASIAN ROUTES - BALTIC BRIEFING
Capesize
After a cut throat couple of weeks, the market finally appeared to have found a floor and rates ticked up. Those analysts that predict ...
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- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
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