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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, 18 October 18
SUPRAMAX: INDO/WC INDIA SUPRAS ARE FIXING AROUND MID $14000S P/D BASIS SPORE DELIVERY
Capesize
The volatile Cape market continues this week, especially in the Pacific says Fearnleys in its latest weekly report.
...
Thursday, 18 October 18
COAL SHORTAGE HITS POWER SECTOR AGAIN; HOW INDIA CAN GET ITS PRODUCTION RIGHT - ANIL SWARUP
By convincing states of the value proposition of increased production, the record production of Fy15 & Fy16 can be emulated.
The ...
Thursday, 18 October 18
CHINA POWER REFORM NEUTRAL ON GRIDS, PRESSURES IPP MARGINS - FITCH RATINGS
China's power sector reform has a broadly neutral impact on transmission grids although it will pressure the power producers' margins, says ...
Wednesday, 17 October 18
ESCROW SERVICE FOR BALTIC MEMBERS NOW LIVE
The Baltic Exchange’s Escrow Service for its members to hold deposits for ship sale transactions goes live today (15 October). The service is ...
Wednesday, 17 October 18
SHIPPING MARKET INSIGHT - TIMOS PAPADIMITRIOU
In the last three months approximately 72 tankers changed hands involving ships larger than 33kdwt up to VLCC. 43 of those vessels had to do ...
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- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- CNBM International Corporation - China
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- VISA Power Limited - India
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- PTC India Limited - India
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Marubeni Corporation - India
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
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