We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Tuesday, 16 June 20
SHALE SHOCKED - WOOD MACKENZIE
 Capturing shut-ins in real time
Oil markets are searching for balance as the world reflects on the impact of the COVID-19 pandemic. The market has never experienced such a demand shock and it is difficult to predict what will happen next. What we do know, is that US producers have made drastic changes to overcome the excess supply in the market. From its peak in March to the end of May, our US Daily Oil Pipe Production data, shows that total US production has dropped 1.6 million bpd. That’s approximately 13% of daily barrels-out-of-the-ground removed from the market due to price-driven shut-ins. It’s hard to swallow just how impactful this dip in production is – and there are many factors at play in the market today. In this post, we will discuss how we’ve been tracking and corroborating shut-ins, impacted regions, and our thoughts on recovery.
Regional assessments of production
In April, our US daily oil production model began showing a meaningful downward response to market pressures. Because our data is broken out into eight different regions, we saw that this decline was driven by the Permian, which fell off by nearly a million bpd from March to May. Despite the Texas Railroad Commission’s decision not to curtail production, operators voluntarily shut their wells in through a market-driven exodus. During this time, our data was corroborated by myriad shut-in announcements from various producers. We are now expecting production to begin rebounding in the basin. We’ve already seen some recovery just south of the world’s most productive basin. Though it did not show as an intense nor rapid response, production in the Eagle Ford fell off by about 130,000 bpd since March. As of June 5, most of that production has recovered. While the shut-ins started in Texas, more followed in the Bakken and Gulf of Mexico.
Bakken production data recently published by the North Dakota Industrial Commission (NDIC) shows that March production came in at 1.428 million bpd, just above our modeled 1.422 million bpd. Between March 13 and May 15, our North Dakota model showed a 410,000 bpd decline, dipping below 1 million barrels at its lowest point. The NDIC also cited on May 15 that production has dipped below 1 million bpd, and that “it is going to be a rather slow process to get production back online.” However, our modeled production data recovered by about 90,000 bpd between May 15 and May 22 which rose with local hub pricing through the end of May. This recovery has since dipped, but recent signals have shown that production is rebounding again in response to the latest price rallies. More on recovery later.
The Gulf of Mexico has been hit just as hard as some onshore fields, despite expectations of resiliency due to larger projects with higher overhead. Since March, we’ve observed production fall off by over 200,000 bpd. At first, this decline was spread evenly across fields (we model production at 12 separate offshore platforms) and corroborated by April 22 shut-in announcements from Cantium and Fieldwood Energy. On May 2, the Delta House platform shut-in and production dropped to zero. During their May 11 earnings call, Kosmos Energy revealed that the platform’s operator had decided to shut the field for the entire month of May and move up their maintenance schedule. Our model captured this shut-in ten days in advance and our subscribers witnessed production ramp back up the day that this field restarted. Previously, our data has accurately predicted production recovery following hurricanes, and our model will also capture the next price-driven uptick in offshore production.
One recent example is Tropical Storm Cristobal, which made landfall over Louisiana on June 5 bringing heavy rain and winds of upwards of 50 mph. Tropical storm warnings were posted for much of the Louisiana coastline, Mississippi, Alabama and portions of the Florida Panhandle. Gulf of Mexico producers began shutting in production on Thursday in preparation for the storm and as of today, nearly 674 Mb/d has been shut-in. Atlantis, Thunder Horse, Na Kika, Jack/St. Malo, Baldpate/Magnolia, Lucius/Hadrian and Tubular Bells are shut-in or running at reduced rates. The BSEE reported that personale had been evacuated from a total of 185 production platforms, which is 29% of total production platform in the Gulf of Mexico. Seven dynamically positioned rigs had been moved off of location in the storm path as safety precaution, while three rigs had been evacuated. Our daily model predicted shut in volumes of 574 Mb/d, which is a decline of 33% of total production from the prior week. Our daily production estimates are able to track the outages in real-time, before the public BSEE reports.
Keep in mind that shut-ins are not uniform. Certain operators, like Exxon Mobil, shut in their most productive wells (according to their May 1 earnings call), while others shut in least economic wells. Some ran wells until failure, and others chartered crude tankers for extra storage space. Still, we’ve now seen sweeping declines across the regions that we model for – which drive our total estimate of crude production in the United States.
Our US Daily Oil Production model covers eight main regions, twelve Gulf of Mexico sub-regions, and a total US production estimate. The model utilizes Genscape’s Oil and Natural Gas Intelligence platforms for real-time inputs. These inputs include oil pipeline flow volumes, crude-by-rail cargo counting, and natural gas nominations. Using these proprietary inputs, Genscape captures a daily production estimate in the following regions with high accuracy: Permian, Gulf of Mexico, Eagle Ford, Bakken, DJ Basin, Alaska, Wyoming, and California. All other US production regions are captured in our total US production number. Regions included in our high-frequency estimate have a monthly correlation to state data greater than 95% R2. This accuracy creates user confidence and helps answer the next question, when will US production reach the bottom and begin recovery?
Calling the bottom and capturing recovery
As a result of these declines in our daily estimates, we have lowered our short-term total US production forecast significantly in Q2-2020 to take into account the shut-ins and completion deferrals. We expect that production will drop nearly 1.9 million bpd, from 12.8 million bpd in March to 10.9 million bpd in June. Of this reduction, we assume nearly 1.1 million bpd come from shut-ins, while 800,000 bpd is related to completion deferrals and rig activity reductions. We could see a jump in production by mid-June as curtailments come back online, however there is risk to this depending on how quickly demand recovers and where storage levels sit. The timing and volume could be dependent on if wells need workover activity or if they actually come back at higher levels due to pressure build up and flush production.
In fact, we’ve seen some incremental growth driven by North Dakota, Denver-Julesburg, and the Eagle Ford, signaling that production could be recovering. Local hubs like Clearbrook and Midland both traded above WTI throughout late April/early May, improving the margin on barrels produced in these regions. Still, since we have never seen widespread production shut-in like this in the past, many questions remain about how much volume will return and if smaller producing higher cost wells may be shut-in for good.
Keep in mind that our forecast will change according to prices and the now bottomed-out rig count, and that we provide our clients with a weekly update of our forward-looking expectations based on these inputs. Regardless of when production comes back, our users will be able to capture and quantify the recovery as it happens. Just as our data was a leading indicator of the first shut-ins, it will catch production on the way up. This will allow our clients to be able to update their balances in near real-time and respond to production movements appropriately.
Watch what happens next
For years, US crude production has been marked by steady, seemingly unstoppable growth. The drastic imbalance of oversupply in a market suppressed by a demand-choking pandemic has driven prices to historic lows. The resulting production dive is nearly indescribable, but nothing short of unprecedented. Data describes the situation much better than words, which is why we strive to provide the most accurate and high-frequency assessment of crude production in a cloudy market. The combined analytical expertise and powerful daily modeling of our US Crude Production suite will help you capitalize on upstream uncertainty. Join us in following shut-ins and capture crude recovery.
Source: Wood Mackenzie
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Wednesday, 05 August 20
SLUMP IN OIL REVENUE CHALLENGES MIDDLE EAST OIL EXPORTERS - INTERMODAL
The Covid-19 pandemic has had far-reaching consequences on the global capital markets. Despite the US government’s efforts for a quick and de ...
Tuesday, 04 August 20
KOEN INVITED BIDS FOR TOTAL 900K MT OF MIN 5600 NCV COAL FOR 3 YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 260,000 to 300,000 Tons (MT) min. ...
Tuesday, 04 August 20
THE WORLD’S FLEET OF COAL-FIRED POWER STATIONS HAS GOT SMALLER FOR THE FIRST TIME ON RECORD, WITH MORE CAPACITY RETIRED IN THE FIRST HALF OF 2020 THAN THE AMOUNT OPENED - IEA
This is according to the latest Global Coal Plant Tracker (GCPT) results by Global Energy Monitor (GEM), which we completed last month and report f ...
Monday, 03 August 20
U.S. COAL CONSUMPTION, WHICH HAS DECLINED SINCE ITS 2007 PEAK, FELL TO ITS LOWEST POINT IN APRIL 2020 - EIA
According to the U.S. Energy Information Administration’s (EIA) most recent Monthly Energy Review, the United States consumed 6.5 quadrillion ...
Monday, 03 August 20
LOW OIL PRICE AND CORONA VIRUS HIT SUB-SAHARAN AFRICA OIL PRODUCERS - FITCH RATINGS
The collapse in oil prices and the coronavirus shock is worsening the fiscal and external balances of sub-Saharan African oil producers, Fitch Rati ...
|
|
|
Showing 846 to 850 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
|
| |
| |
|
