TOPICS OF INTEREST
PETROLEUM ECONOMICS/PRODUCTION FORECASTING
Oil Price Spike Could Send Service Company Margins Higher
The recent jump in oil price could create additional momentum for margins in the service sector. With shale euphoria wearing off, service company margins are still showing some resiliance. If the price hike persists into 4Q 2019, increased activity could improve pricing further.
Subsea Markets Face High Stakes if Oil Prices Slide
In a $60 to $70 oil environment, the subsea market is poised to grow around 7% annually up to 2025. But a significant portion of this activity is at risk if the price of Brent crude falls to $50 per barrel.
Capital Discipline Drives E&P Sector as Investors Look for Better Returns
The E&P sector has maintained a strong focus on capital discipline during its recovery from the 2014 oil price downturn, as investors look for companies to generate free cash flow to help pay down debt. How will this focus affect sector growth in the near term?
Australia Set To Become King of LNG Exports
Exports capacity has been rising for a decade and is on track to become the world leader within a year.
Plains Adds Fee for New Pipeline, Cites Tariffs
In a filing with the US FERC, Plains All American Pipeline said it would begin charging shippers an additional fee on its Cactus II pipeline to offset higher construction costs incurred in the wake of US steel tariffs.
Shell Sanctions Deepwater PowerNap Project
The subsea tieback is expected to start up in 2021. This is Shell’s second major development on a tieback in the US Gulf of Mexico, following Kaikias’ startup in May.
Vaca Muerta Growth Drives Argentina LNG Exports
Production from the Vaca Muerta now accounts for 23% of Argentina’s natural gas output. With only 4% of the shale play’s acreage in development, the US EIA says the country is in position to boost LNG exports in the coming years.
Aker Energy Moves Closer to IPO
With a $100-million investment and submittal of its offshore Pecan field development plan to Ghana authorities, Aker Energy continues its positioning for an IPO later this year.
ADNOC and CNOOC To Collaborate in Upstream, Downstream, and LNG
ADNOC and CNOOC will explore multiple new opportunities for collaboration across the upstream and downstream sectors in the UAE and China.
Africa Takes the Lead in Record Year for LNG
Driven by Mozambique’s Area 1 and Area 4 projects, Africa is poised to become the dominant LNG investment destination by the end of this year, with the continent seeing nearly one-third of total greenfield investment.
New Pipelines Needed to Meet Surge in Permian Crude Demand
Growing supply of Permian crude oil means the basin will need extra takeaway capacity of up to 500,000 B/D by the end of the 2020s, according to new research from Wood Mackenzie.
Kuwait Oil Pursues Offshore E&P, Signs With Halliburton for Services
Kuwait Oil Co. signed a $597-million offshore drilling services contract with Halliburton for six high-pressure/high-temperature exploration wells on two jackup rigs in the Arabian Gulf.
US LNG Export Capacity Growth Will Keep Floor Under Natural Gas Prices
With almost 10 Bcf/D of liquefaction capacity scheduled to go into service by 2025, a new report from Moody’s says that US LNG exports should help solidify a floor under natural gas prices as LNG markets see a shortfall in supply.
Service Companies Show Pricing Power Growth
New analysis from Rystad Energy shows service companies are beginning to raise prices after seeing a significant drop following the oil price downturn. Pricing power is projected to keep rising in 2020 as the service industry sees more demand across the supply chain.
Shell Ships First LNG Cargo From Prelude
First cargo from the world’s largest floating LNG project comes in the midst of low LNG prices sparked by a global supply boost. Prelude is expected to produce 3.6 mtpa for Shell.
Tariffs Pack a Bigger Punch Than Tax Incentives
Louisiana state granted a tax incentive to LNG Ltd. for its Magnolia project in Lake Charles. Although a beneficial development, it’s a drop in the bucket in the company’s progress toward FID.
US Exceeds One-Year Mark as Natural Gas Exporter
An EIA report shows natural gas exports reaching 4.6 Bcf/D in February, the 13th consecutive month in which the country's natural gas exports exceeded its imports. Exports are projected to reach 7.5 Bcf/D by 2020.
Will LNG Drive Asia’s Sustainable Future?
Coal remains the biggest challenge to LNG in Asia.
US on Pace To Top Saudi’s Liquid Exports This Year
The shale revolution is leading the US into a unique position: a bigger exporter of crude and petroleum liquids than the Kingdom of Saudi Arabia.
How Many Export Terminals Does the US Need?
The new bottleneck for Texas’ crude production is not onshore—it is offshore. Shallow ports have kept big tankers from taking away the state’s expanding supply which has attracted a slew of proposed export projects.
Keep Your Eye on the Oil Price Ticker To Gauge 2019 Oilfield Services
The oilfield services sector showed steady revenue growth in 2018 thanks, in part, to increased project sanctioning. With the oil price falling $20 in the past 2 months, however, the future may be murkier than expected.
US To Become Third-Largest LNG Exporter in 2019
The US EIA projects LNG export capacity will rise to 8.9 Bcf/D by the end of next year, making the US the third-largest exporting country in the world behind Australia and Qatar.
Sustained Subsea Hardware Investment Projected for Near Term
Westwood forecasts a recovery in the subsea market backed by a new wave of offshore investment. Subsea vessel operations and hardware expenditure are expected to total $152 billion from 2019 to 2023.
FPSO Market Set To Rebound Over Next Three Years
A report from Rystad Energy shows a near-term boost in the global floating production market, with more than 30 new FPSO projects possibly reaching sanction from 2019 to 2021.
Equinor Submits Phase 2 Plan for Johan Sverdrup to Norway Regulator
Equinor submitted the development plan for Phase 2 of the Johan Sverdrup project on 27 August with an increased resource estimate and a cut of NOK 6 billion in investment costs.
UK E&P Activity Looks Promising for 2018, But Questions Remain
A new report from Oil & Gas UK explains how the UK North Sea is showing signs of life, but warns that new exploration investment will be necessary to avoid another production downturn.
Government, Industry, Consumers, and Arithmetic: How Will the Rise of Electric Vehicles Impact Oil Demand?
Even if EVs reach cost and performance parity with conventional combustion engines, a lot of questions remain about how long it will take for consumers to get comfortable that parity is real, and for manufacturers to turn over enough volume to make a big enough impact on the oil industry.
Oilfield Services Q3 Review: Promising Outlook After Tough Times
A rise in oil prices close to 3-year highs should further stimulate a recovering oilfield services and equipment sector, despite lower than expected late-2017 activity in US shale.
2018 Global Natural Gas Outlook
Natural gas is the only fossil fuel that will maintain its share in the energy mix of the coming decades, mainly supported by policies to reduce air pollution and greenhouse gas emissions.
2017 Energy Outlook
As the debate continues about oil prices and supply and demand, the SPE Production and Facilities technical director examines data published by various organizations on the short- and long-term industry outlook.
Book Summary and Commentary: The Price of Oil
In the Price of Oil, Roberto Aguilera and Marian Radetzki predict a dramatic increase in shale oil and other tight oil production from about 4 million BOPD today to as much as 40 million in 2035. This will have a limiting effect on oil price.
Iranian Oil and Gas Production Shows Significant Upside Potential, but Limitations Remain
Iran’s oil and gas sector has been significantly affected by the introduction and tightening of international sanctions in recent years. represents a significant step forward in terms of normalizing the country’s relations with the global community.
Hedgehogs vs. Foxes: Improving the Accuracy of Predictions
Can aggregative contingent estimation (ACE) improve the quality of oil price forecasts and even project performance? I have come to believe that oil price can be determined with reasonable confidence, and the key to such forecasting is ACE.
Oil at USD 20 per Barrel: Can It Be?
The oil price cannot be USD 20 for any long period because we cannot produce enough oil to feed the world at that price. But if the price of oil is based on supply and demand, how could it fall to USD 20 at any point in time?
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