World Oil Supply - Jan 09
Source: OPEC_RP090108 1/15/2009, Location: Europe
Financials and Investment
Non-OPEC
Forecast for 2008
Non-OPEC supply is expected to average 50.57 mb/d in 2008, an increase of 80 tb/d over 2007 and a downward revision of 50 tb/d from the previous month’s assessment. This month’s estimate includes Indonesia in the non-OPEC supply group for the first time, for comparison purposes. Downward revisions were carried out for supply from Mexico, New Zealand, Malaysia, Vietnam, Brazil, Russia and Azerbaijan. There were upward revisions to supply from USA, Canada, UK, Colombia, but these were not sufficient to offset the downward revisions made to the supply forecasts for other countries. The fourth quarter witnessed a significant downward revision of around 250 tb/d. The first and third quarters experienced upward revisions of around 8 tb/d and 43 tb/d, respectively. On a quarterly basis, non-OPEC supply now stands at 50.78 mb/d, 50.91 mb/d, 49.87 mb/d and 50.70 mb/d, respectively.
In 2008, Developing Countries contributed the most to supply growth based on the current estimate of 260 tb/d, while OECD countries’ supply showed a heavy decline of around 350 tb/d. Latin America experienced the highest growth on a regional basis, especially Brazil and Colombia, followed by China, Africa, OECD Pacific, the FSU and Other Asia. In 2008, Latin America saw growth of 0.2 mb/d over the previous year as Brazil witnessed another year of strong performance with growth of around 130 tb/d, which was lower than the initial forecast. China registered strong growth of around 96 tb/d in 2008. Production for the FSU registered an increase of around 30 tb/d for 2008 over the previous year. The majority of the growth came from Kazakhstan, while only a minor increase came from Azerbaijan, instead of an expected large growth, mainly due to the BTC pipeline explosion and the gas leak on one of the ACG platforms. The forecast for Western Europe, North America, and the Middle East showed declines. Western Europe supplies displayed the heaviest drop among the other regions in 2008 of around 200 tb/d. The UK and Norway displayed declines of 120 tb/d and 110 tb/d, respectively. In North America, the heavy decline of 310 tb/d in Mexico outpaced the significant growth in Canada of around 100 tb/d and USA growth of around 40 tb/d. USA supply has suffered and is still partially affected by the impact of hurricanes Gustav and Ike.
Revisions to the 2008 estimate
A significant downward revision of 250 tb/d has been made to the fourth quarter of 2008, while the first and third quarters have been revised up by 8 tb/d and 43 tb/d, respectively. These revisions reflect the most recent data and have resulted in an overall downward revision of 50 tb/d for 2008 to average at 50.57 mb/d, including Indonesian supply. The estimate for the USA was revised up for both the third and fourth quarters by 32 tb/d and 39 tb/d, respectively. The upward revisions reflect recent actual data, with Gulf of Mexico production continuing to return as well as the ramp-up of the Thunder Horse project. In Canada, both third and fourth quarters were revised up by 27 tb/d and 5 tb/d from previous month’s assessment to adjust to actual figures. Mexico production continued to display a decrease due to heavier than expected fields decline, and hence was adjusted downward in the fourth quarter by 80 tb/d. In the North Sea, UK production showed a positive increase and required an upward amendment of 23 tb/d and 114 tb/d in both the third and fourth quarters, respectively. In Asia Pacific, the delays in the Maari development along with adjustment to actual figures required a downward revision for the third and fourth quarters of 6 tb/d and 20 tb/d, respectively. In Asia, the maintenance in Malaysia reduced the fourth quarter supply estimate by 61 tb/d and in Vietnam adjustments to actual figures reduced the supply forecast by 15 tb/d and 50 tb/d in both the third and fourth quarters, respectively. In Latin America, Brazil supply estimate was revised down by 75 tb/d in the fourth quarter to adjust for actual figures mainly impacted by various delays, while improved performance from Colombia required an upward revision of 37 tb/d for fourth quarter supply. In the FSU, the Russia supply forecast was revised down by 95 tb/d in the fourth quarter on the back of lower production as per recent data. Various reports have indicated that with the current price environment, the expected margin for some operators is not sufficiently economical to encourage continued production at certain wells, thus affecting Russia’s overall production. In Azerbaijan, while it was reported that the Central Azeri field partially resumed production, a considerable volume remains shut from the platform as the gas leak situation has not yet been resolved.
Forecast for 2009
Non-OPEC supply is expected to average around 51.15 mb/d in 2009, an increase of 0.58 mb/d over the 2008 figure and a downward revision of around 70 tb/d from the previous month’s assessment. On a quarterly basis, non-OPEC supply is expected to average 51.39 mb/d, 50.99 mb/d, 50.88 mb/d, and 51.34 mb/d, respectively.
OECD
Total OECD oil supply is forecast to average 19.68 mb/d in 2009, representing a decline of 110 tb/d
From the 2008 level, following a downward revision of 79 tb/d from last month’s figure. OECD production levels for all quarters in 2009 were revised down by 85 tb/d, 80 tb/d, 42 tb/d, and 109 tb/d, respectively. Both North America and Pacific OECD regions were revised down, while OECD Western Europe was revised up. The downward revisions were supported by the ongoing financial situation in addition to the price developments and assuming heavier decline for some mature fields. Meanwhile, better performance in the North Sea and a review of investment supported the upward revision for the OECD Western Europe region. On a quarterly basis, OECD oil supply is estimated to average 19.99 mb/d, 19.61 mb/d, 19.45 mb/d and 19.68 mb/d, respectively. Preliminary data for December 2008 puts total OECD output at around 20.04 mb/d.
USA
US oil supply is expected to reach 7.72 mb/d in 2009, an increase of 190 tb/d over the current 2008 assessment and a downward revision of 36 tb/d from the previous month. Supply forecast for the first three quarters in 2009 encountered downward revisions while the fourth quarter was revised higher. US production from the Gulf of Mexico, which was curtailed on the back of hurricane effects, should continue to recover through 2009, despite the reported permanent loss of some minor volumes. Additionally, the strong ramp-up of the Thunder Horse project is expected to support growth in 2009. The operator reportedly brought onstream the third and fourth wells of the project with volumes reaching 200 tboe/d. Volumes are also expected from startups and rampups such as Atlantis, Genghis Khan, Tahiti, Thunder Hawk, and Shenzi as well as other projects. Moreover, US supply growth is expected to receive some support from biofuels despite the increased difficulties surrounding the industry with the current price and demand environment. On a quarterly basis, US oil supply is expected to stand at 7.65 mb/d, 7.68 mb/d, 7.71 mb/d and 7.72 mb/d, respectively. The preliminary data puts US oil supply in December at 7.62 mb/d, almost steady from the November level. The drop from Alaskan production offset the increase from US federal Gulf of Mexico production.
Canada and Mexico
Oil supply from Canada is forecast to grow by around 50 tb/d in 2009 over the current 2008 estimate to average 3.47 mb/d, representing a downward revision of around 23 tb/d from the previous month’s evaluation. The increase in Canadian supply is expected to come generally from unconventional oil, with projects such as Long Lake. The downward revision came as many operators announced deferments and cancellations of project as well as a reduction in their Capex on the back of lower oil prices. On a quarterly basis, production stands at 3.46 mb/d, 3.42 mb/d, 3.46 mb/d and 3.52 mb/d, respectively. As per preliminary data, Canadian oil supply stood at 3.48 mb/d in December, which is higher than the November level.
Mexico oil supply is expected to average 2.98 mb/d in 2009, a decline of around 0.19 mb/d over the current level of the previous year, showing a downward revision of 46 tb/d from last month. The heavy declines witnessed in 2008 required further revision and depending on the futureperformance might lead to further downward adjustment. The reported sharp decline at the Akal field in the Canterell complex is anticipated to continue in 2009, while the fate of supply increases from Ku-Maloob-Zapp (KMZ) and partially from Chicontepec will determine the strength of Mexico oil supply in 2009. On a quarterly basis, Mexico oil supply is expected to stand at 3.10 mb/d, 2.96 mb/d, 2.97mb/d and 2.90 mb/d, respectively.
Western Europe
Oil supply from OECD Western Europe is anticipated to decrease by around 250 tb/d in 2009 over the current figure for 2008 to average 4.79 mb/d, following an upward revision of around 50 tb/d from the previous month. The better than expected performance in the North Sea supported the upward revision. OECD Western Europe still represents the largest decline on a regional basis in 2009. On a quarterly basis, OECD Western Europe supply in 2009 stands at 5.03 mb/d, 4.84 mb/d, 4.57 mb/d and 4.71 mb/d, respectively. Preliminary December data suggests a production level of 5.09 mb/d.
Norway oil supply is estimated to average 2.34 mb/d in 2009, a decline of around 0.11 mb/d from the current 2008 level and a minor upward revision of around 6 tb/d from last month’s estimate. Despite the ongoing decline in the Norway field, however, developments in projects such as the Tyrihans, Brage, and YME are promising to add volume and offset some of the decline in mature fields. On a quarterly basis, Norway supply stands at 2.48 mb/d, 2.35 mb/d, 2.20 mb/d and 2.32 mb/d, respectively.
Oil supply from the UK is forecast to decline by around 140 tb/d in 2009 over the current 2008 level to average 1.43 mb/d, an upward revision of around 50 tb/d from last month’s level. The current production data indicating better than expected performance supported the upward revision. The startup of the Grouse oil production slightly supported the outlook in addition to the news of the proposed tax breaks for marginal oil and gas fields. On a quarterly basis, UK oil supply stands at 1.51 mb/d, 1.46 mb/d, 1.38 mb/d and 1.37 mb/d, respectively.
Denmark oil supply is foreseen to decline slightly in 2009 from the current 2008 level to average 0.27 mb/d, representing a downward revision of around 25 tb/d from the previous month’s level to reflect the lower than expected supply in 2008.
Asia Pacific
OECD Asia Pacific oil supply is expected to average 0.72 mb/d in 2009, indicating an increase of around 80 tb/d from the current 2008 level, which represents a downward revision of 25 tb/d from the previous month’s assessment. On a quarterly basis, total oil supply is estimated to average 0.74 mb/d, 0.72 mb/d, 0.73 mb/d and 0.70 mb/d, respectively.
Australian oil supply is anticipated to average 0.60 mb/d in 2009, indicating an increase of around 70 tb/d over the 2008 current figure, representing a minor downward revision of 5 tb/d from the previous month’s level. The downward revision came on the back of project startup and ramp-up delays. On a quarterly basis, production stands at 0.62 mb/d, 0.60 mb/d, 0.61 mb/d, and 0.57 mb/d, respectively.
New Zealand’s oil supply forecast was revised down for 2009 on the back of the startup delays for the Maari project.
Developing Countries
Developing Countries (DCs) oil supply is anticipated to average 12.71 mb/d in 2009, indicating an increase of 0.44 mb/d from the current 2008 estimate, an upward revision of around 60 tb/d from previous month’s assessment. Among the regions, the Middle East supply forecast experienced a downward revision while both Africa and Latin America were revised up and Other Asia forecast remained relatively unchanged. Brazil maintained its position on the top of the gainer’s list followed by Vietnam, among the DC group. On a quarterly basis, total oil supply in DCs is expected to stand at 12.61 mb/d, 12.58 mb/d, 12.82 mb/d and 12.84 mb/d, respectively.
Other Asia is foreseen to increase by 0.15 mb/d in 2009 over the current 2008 level to average 3.91 mb/d, relatively unchanged from last month’s assessment. Indonesia is now included in the Other Asia group. Despite the steady state, there were upward and downward revisions to India and Vietnam forecasts, respectively. India oil supply is now projected to increase by around 30 tb/d in 2009 over the current 2008 level supported by the expected startup of the Mangala project. Vietnam oil supply is estimated to average 0.36 mb/d in 2009, a growth of around 50 tb/d from the current 2008 figure. The forecast increase in Vietnam is supported by the ramp-up of the Song Doc project that started production in 2008. Indonesia oil supply is also expected to increase in 2009 by around 20 tb/d from the 2008 level. On a quarterly basis, Other Asia supply is estimated to average 3.90 mb/d, 3.83 mb/d, 3.94 mb/d and 3.96 mb/d, respectively.
Oil production from Latin America is projected to average 4.31 mb/d in 2009, an increase of around 0.23 mb/d over the current 2008 level, indicating an upward revision of 37 tb/d since last month’s estimate. Despite the downward revision of 52 tb/d from last month’s assessment for Brazil growth forecast, it maintained the highest growth of 0.20 mb/d among Latin American producers with an average of 2.48 mb/d. The downward revision came on the back of expected delays of projects startup and ramp-up. Argentina, Colombia, Trinidad and Tobago oil forecasts were revised up due to improved performance and expected better ramp-up. On a quarterly basis, Latin America supply stands at 4.21 mb/d, 4.28 mb/d, 4.39 mb/d and 4.36 mb/d, respectively.
Middle East oil supply is estimated to decline by around 10 tb/d over the current 2008 figure to average 1.63 mb/d in 2009, representing a downward revision by 25 tb/d from last month’s evaluation. The downward revision came from Oman on expectation of lower project ramp-ups. Oman is now expected to average 0.76 mb/d in 2009. Syria oil supply experienced an upward revision of 15 tb/d, supported by the expected ramp-up of the Khurbet East development. On a quarterly basis, Middle East group production stands at 1.63 mb/d in all quarters.
Africa is forecast to increase by 70 tb/d in 2009 over the current 2008 level to average 2.86 mb/d, showing an upward revision of around 47 tb/d from the previous month’s assessment. Chad, Egypt, and Sudan supply forecasts were revised up on the back of new data. The Congo remains to have the highest increase among the group supported by the Moho-Bilondo development that is expected to continue ramp-up to the plateau during 2009. On a quarterly basis, Africa production stands at 2.86 mb/d, 2.84 mb/d, 2.86 mb/d and 2.89 mb/d, respectively.
FSU, Other Regions
Oil supply from the FSU is foreseen to average 12.70 mb/d in 2009, a growth of 0.15 mb/d over the current 2008 figure, which represents a downward revision of around 132 tb/d from last month’s estimate. Russia, Kazakhstan, and Azerbaijan supply forecasts experienced a downward revision. On a quarterly basis, total oil supply in the FSU is forecast to average 12.74 mb/d, 12.73 mb/d, 12.56 mb/d and 12.78 mb/d, respectively. China oil supply is expected to increase by around 60 tb/d to average 3.93 mb/d in 2009 over the current 2008 level. Other Europe group is expected to remain flat over 2008 at 0.14 mb/d.
Russia
Russia is projected to decline by around 110 tb/d over the current 2008 figure to average 9.67 mb/d in 2009, representing a downward revision of 54 tb/d from last month’s assessment. Despite the expected new volumes from developments such as Verkhnechonsk, Uvat, and Yuzhno-Khlyuchu, as well as year-round production of Sakhalin II, the current oil price environment has pressured many operators to considerably cut their capex in 2009, which is going to have an effect on supply in 2009 and beyond. Moreover, in certain wells that require maintenance to continue or increase production, the operators might delay maintenance until a better economical outcome can be achieved for those certain wells. Accordingly, Russian oil supply forecast for 2009 may well be changed in the future as more information becomes available. On a quarterly basis, Russian oil supply is estimated to average 9.74 mb/d, 9.66 mb/d, 9.63 mb/d and 9.66 mb/d respectively. Preliminary data indicates that December production stood at 9.74 mb/d.
Caspian
Kazakhstan oil supply is forecast to average 1.48 mb/d in 2009 indicating an increase of around 70 tb/d over the current 2008 level, and a downward revision of 25 tb/d compared to the previous month’s estimate. The downward revision came on the back of reports suggesting that some operators plan to cut production as low oil prices make it unprofitable to sustain current production levels in view of transportation and operation costs. However, it was reported that the government will reduce its crude oil export duty to zero, which may provide some relief to the operator, and hence require a change to the forecast. On a quarterly basis, Kazakh supply is expected to stand at 1.51 mb/d, 1.51 mb/d, 1.38 mb/d and 1.52 mb/d, respectively.
Oil supply from Azerbaijan is foreseen to grow by around 0.18 mb/d in 2009 over the current 2008 level to average 1.08 mb/d which represents a downward revision of 53 tb/d from last month’s assessment. Partial recovery of the Central Azeri platform was reported, yet the return of full capacity is still not available. Therefore, further revisions might be necessary in the future as more information becomes available. On a quarterly basis, Azerbaijan oil supply stands to average 1.03 mb/d, 1.09 mb/d, 1.08 mb/d and 1.12 mb/d, respectively.
China
China oil supply is expected to average 3.93 mb/d in 2009, representing growth of around 60 tb/d from the current 2008 level, following an upward revision of 30 tb/d from previous month’s assessment. The startup of production from platform B in the Peng Lai phase II project as well as the expectation for Platform E and D to be commissioned supported the upward revision. On a quarterly basis, China supply is expected to average 3.93 mb/d, 3.94 mb/d, 3.93 mb/d and 3.91 mb/d respectively.
OPEC natural gas liquids and non-conventional oils
OPEC NGLs and non-conventional oils are estimated to average 4.43 mb/d in 2008, representing growth of 0.4 mb/d over the previous year. In 2009, OPEC NGLs and nonconventional oils are projected to increase by 0.59 mb/d over the current 2008 level to average 5.03 mb/d. For comparison reasons, Indonesia NGL and non-conventional oils were included in non-OPEC supply for all periods in this month’s report.
OPEC crude oil production
According to secondary sources, OPEC total crude oil production (which includes Indonesian production) averaged 30.28 mb/d in December, which is 834 tb/d lower than the November figure. Supply from most OPEC Member Countries declined, with Iran, and Kuwait showing individual declines of more than 100 tb/d, while Saudi Arabia shows a decline of more than 500 tb/d.. Production from Angola, Nigeria, and Iraq experienced increases in December over the previous month. OPEC production not including Iraq stood at 27.95 mb/d, a decline of 846 tb/d from the November level.
World Oil Supply
Preliminary figures indicate that world oil supply declined 0.62 mb/d in December from theprevious month to averaged 85.02 mb/d. Non-OPEC supply experienced an increase of more than 0.2 mb/d while OPEC crude fell sharply. OPEC crude oil’s share in global production remained relatively steady at 36% in December. The estimate is based on preliminary data for non-OPEC supply, estimates for OPEC NGLs and OPEC crude production stems from secondary sources.
|
