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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, 02 August 18
INDO / CHINA COAL RV'S IS PAYING AROUND USD 11,000 TO SUPRAS BSS DELIVERY SINGAPORE - FEARNLEYS
Capesize
The counter seasonally strong market during the summer months bodes well for the remainder of the year.
According ...
Wednesday, 01 August 18
JOKOWI CANCELS PLAN TO REVOKE COAL DMO - JP
President Joko "Jokowi" Widodo on Tuesday has canceled the government’s plan to revoke the domestic market obligation (DMO) for coa ...
Wednesday, 01 August 18
SHIPPING MARKET INSIGHT - GIANNIS ANDRITSOPOULOS
The dry bulk market activity over the past four weeks has remained stable when compared to the previous months. There are concerns with regards to ...
Tuesday, 31 July 18
INDONESIA UNLIKELY TO CHANGE COAL SUPPLY, PRICING RULES UNTIL 2019 - REUTERS
Indonesia is unlikely to change its rules on domestic coal supply and pricing until 2019, Coordinating Maritime Minister Luhut Pandjaitan said on M ...
Tuesday, 31 July 18
ENERGY MINISTRY REMAINS FIRM ON DMO POLICY FOR COAL - JP
The Energy and Mineral Resources Ministry has stressed that it will not cancel its policy on the domestic market obligation (DMO) for coal, as the ...
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- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Deloitte Consulting - India
- VISA Power Limited - India
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- Sarangani Energy Corporation, Philippines
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
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