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.
|
|
Saturday, 06 June 20
KOREA SOUTH-EAST POWER CO INVITED COAL BIDS FOR MIN 5600 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 270,000 Tons (MT) min. 5600 NCV co ...
Friday, 05 June 20
COAL INDIA ESTIMATES PRODUCTION GROWTH BY OVERBURDEN REMOVAL - FINANCIAL EXPRESS
PSU miner Coal India (CIL) has now limited mining only to Overburden Removal (OBR) with falling demand of coal. The mining behemoth is now keeping ...
Friday, 05 June 20
U.S. SANCTIONS COMPLIANCE GUIDANCE RELEASED FOR THE GLOBAL MARITIME, ENERGY AND METALS SECTORS - AKIN GUMP
Key Points
On May 14, 2020, OFAC, the Department of State and the U.S. Coast Guard jointly released guidance for persons involved in the ma ...
Friday, 05 June 20
IN THE FIRST 5 MONTHS OF 2020 AUSTRALIA SHIPPED 6.8 MLN TONNES TO VIETNAM - BANCHERO COSTA
In the first 5 months of 2020, global seaborne coal trade declined by as much as -8% year-on-year, according to vessel tracking data from Ref ...
Thursday, 04 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
|
|
|
Showing 926 to 930 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- Bhatia International Limited - India
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Australian Coal Association
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
|
| |
| |
|
