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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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Friday, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
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- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- The University of Queensland
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
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