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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 June 23
CHINA'S MAY COAL IMPORTS FROM AUSTRALIA RECOVER TO PRE-BAN LEVELS - REUTERS
Australian coal sales to China increased in May, as trade resumed between them even as overall coal demand weakened against an uncertain macroecono ...
Monday, 19 June 23
DROUGHT-DEPLETED HYDROPOWER DRIVES CHINA TO TURN TO COAL - REUTERS
China has leant hard on coal-fired power plants as well as wind and solar generators to make up for a shortfall in hydroelectric generation as a re ...
Monday, 19 June 23
CHINA COAL OUTPUT UP 4.2 PCT IN MAY - XINHUA
China’s raw coal output posted steady growth in May, official data showed.
The country produced 390 million tonnes of raw coal ...
Wednesday, 24 May 23
AMMONIA-FUELLED BULK CARRIERS WITHIN FIVE YEARS - BALTIC EXCHANGE
Within five years, ships powered by clean ammonia could be a feature on the iron ore trade routes between West Australia and East Asia.
A study ...
Tuesday, 23 May 23
CHINA'S APRIL COAL OUTPUT LEAPS 11% ON YEAR, BUT DEMAND DOWNTURN LOOMS - REUTERS
China’s daily coal output in April jumped 11% from the same month a year earlier, boosted by Beijing’s order to increase supply to ensu ...
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- McConnell Dowell - Australia
- Wilmar Investment Holdings
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Petron Corporation, Philippines
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