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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, 16 October 18
A PRACTICAL OVERVIEW OF THE IMO 2020 SULPHUR CAP - CLYDE&CO
KNOWLEDGE TO ELEVATE
With less than eighteen months before Regulation 14.1.3 of Annex VI of the MARPOL Convention comes into effect, there are ...
Saturday, 13 October 18
SUPRAMAX: SIGNIFICANT ACTIVITY IN THE INDIAN OCEAN WAS EVIDENT AND RATES JUMPED - BALTIC BRIEFING
Capesize
A sharp reversal of fortunes for the big ships as the week closed after a depressed beginning. To start with drops were sudden, with t ...
Wednesday, 10 October 18
SHIPPING MARKET INSIGHT - ILIAS M. LALAOUNIS
During the end of last month the BHSI was hovering around 630 points, while the last observed sale on a 10-yr old Japanese Handy was the M/V Van Im ...
Monday, 08 October 18
INDONESIAN THERMAL COAL PRICE REFERENCE FELL 3.74% IN OCTOBER 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Monday, 08 October 18
KOMIPO INVITES BIDS FOR 520,000 TONS OF COLOMBIAN ORIGIN OF 5,700 NAR COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Colombian origin ...
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- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Planning Commission, India
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
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