INTERACTIVE: Sharpest rise in non-OPEC crude megaproject production in history for 2017-19
Tom Brown
12-Apr-2017
LONDON
(ICIS)–The next two years are likely to see the most
significant rise in new crude oil production capacity from
new megaprojects in the history of the industry, sector
cartel OPEC said on Wednesday.
Newly-productive projects coming online in Russia, Brazil and
Canada, coupled with new shale gas output in North America,
could add an additional 1m bbl/day to global oil supply
between 2017 and 2019, according to OPEC.
The news comes as OPEC cornerstone Saudi Arabia is reported
to be lobbying to extend the production cuts by OPEC and some
non-OPEC states brokered in late 2016 and currently slated to
run until this June.
Instituted to tighten global oil supply and stabilise prices,
the agreement has seen OPEC crude production fall by 153,000
bbl/day month on month in March, according to OPEC
Secretariat data based on secondary sources.
The most significant drop was seen in Libya, where the
country’s largest oilfield, El Sharara, is said to have
gone offline amid conflict.
Despite the sharp projected uptick in non-OPEC supply through
to 2019, the investment decision on many of those projects
had been made in a different era for crude oil, OPEC
said.
“Many of these projects, costing billions of dollars and
taking many years to bring online, were initiated back when
oil prices traded at $100/bbl,” the group said in its monthly
oil report.
The cartel cut its estimates of 2016 non-OPEC supply by
30,000 bbl/day to 57.32m bbl/day, a year on year contraction
of 690,000 bbl/day, while global demand growth for the year
were left broadly unchanged at 1.38m bbl/day at an average of
95.05m bbl/day.
Oil demand growth among OECD nations for 2017 was left
unchanged from OPEC’s previous estimate at an increase of
240,000 bbl/day year on year, with a projected third-quarter
peak buoyed by the US summer driving season.
The only section of OECD nations where oil demand is expected
to contract year on year in 2017 is Asia Pacific – comprising
South Korea and Japan – due to a drop in Japanese
demand.
Preliminary data for February also showed a decrease in
demand of 150,000 bbl/day year on year for the four key
European economies, as declines in Italy and the UK offset
growth in France and Germany.
European demand could be driven by strengthening industrial
production and automotive demand, but “substantial” downside
risks exist, chiefly the possibility off the collapse of the
economic recovery in the region and the growing popularity of
alternative-fuel vehicles.
European oil demand grew 250,000 bbl/day in 2016 and growth
expectations are much lower for this year, OPEC said, but
demand in the region is expected to be a fraction of that
this year, at around 70,000 bbl/day. (Picture source:
Olaf Kruger / imageBROKER/REX/Shutterstock)
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