One of the immediate effects of the coronavirus (COVID-19) pandemic on the oil and gas industry has been a global glut of crude oil supply amid already weak demand, resulting in a significant drop in oil prices. Ongoing projects across the industry will likely be impacted, which could potentially put …
Following the expected cuts in capital expenditure (capex) for shale operators in the Bakken due to demand shock from the coronavirus (COVID-19) and supply shock from the Russia-Saudi price war;
Adrian Lara, Oil and Gas Analyst at GlobalData, a leading data and analytics company, offers his view:
“Whenever available, companies …
Russia is expected to lead the refining industry capacity growth in the Former Soviet Union (FSU) from active and upcoming (planned and announced) projects, accounting for 56% of the total capacity growth between 2019 and 2024, says GlobalData, a leading data and analytics company.
The company’s report, ‘Global Refining Industry Outlook to 2024 – …
Following the news that Saudi Arabia is responding to Russia’s refusal to a new oil production cut agreement by cutting oil prices and boosting supply,
Will Scargill, Managing Oil & Gas Analyst at GlobalData, a leading data and analytics company, offers his view:
“The Saudis’ apparent price war is a …
The average production for the Denver-Julesburg (DJ) Basin in 2020 is forecasted to hit 1.1 million barrel oil equivalent per day (mmboed) compared to an average of 0.997mmboed in 2019, according to leading data and analytics company GlobalData.
Steven Ho, Oil and Gas Analyst at GlobalData, comments: “Occidental Petroleum (Oxy) and PDC Energy …
At least it’s over.
The markets endured their worst day of trading of this young year as the Dow Jones Industrial Average dropped 2,000 points to close at 23,850.79 — a 7.79% decline. The Nasdaq Composite Index fell 624.94, to close at 7,950.68, and losses to the S&P 500 triggered a temporary halt on trading …
In 2019, offshore discoveries accounted for more than 60% of global discoveries, up significantly on previous years, says GlobalData, a leading data, and analytics company.
The company’s report, ‘Q4 2019 Global Oil and Gas Discoveries Review – Russia and Mauritania Lead Resource Discovery in the Quarter’, reveals that while Colombia and Norway saw the highest number of discoveries drilled in 2019, Guyana, Mauritania and Russia hosted the most significant finds.
In Guyana, ExxonMobil drilled five discoveries in the deepwater Stabroek Block. Following the additional well drilled in January 2020 (Uaru-1), the company has increased its estimated gross recoverable resources for the block to more than eight billion barrels of oil equivalent. Tullow Oil has also contributed to the country’s 2019 success with the drilling of the Jethro (deepwater) and Joe (shallow water) wells, inboard of the Stabroek Block.
Toya Latham, Oil and Gas Analyst at GlobalData, comments: “The 2019 Guyanan discoveries build on the successes of previous years, some of which have already been brought onstream. Previously in December 2019, production began at the Liza Phase 1 development, which is the country’s first major oil project, and was developed in less than five years after discovery. The area has also recently seen wider success with Total reporting a significant oil discovery in Block 58, which is located in Suriname adjacent to the Stabroek Block.”
The Mauritanian and Russian discoveries are both gas discoveries. In November 2019, BP announced the successful result of the deepwater Orca-1 well in Mauritania. The well was targeting the Orca prospect, which has been estimated to have a mean gas initially in-place of 13 trillion cubic feet. Earlier in May 2019, Gazprom also confirmed that its two wells (Dinkov and Nyarmeyskoye) drilled on the Kara Sea shelf held estimated combined reserves of 1.5 billion boe.
Latham adds: “The Orca-1 well in the north of Block C8 adds to the recent successful drilling in the region and supports BP’s plans for the area to become a regional LNG hub. The company has already sanctioned Phase 1 of the cross-border Greater Tortue Ahmeyim development in the south of the block, and this latest discovery in the north of the block will help underpin any expansion plans in the Bir Allah area.”
Other significant drilling activity of 2019 includes the Glaucus discovery in Cyprus, the Namavaran discovery in Iran, and the Brulpadda discovery in South Africa.
Following the news that Pemex has rejected Talos’ claim to the Zama field, Adrian Lara, Oil and Gas Analyst at GlobalData, a leading data and analytics company, offers his view:
“There are no indications on when Pemex will start drilling its adjacent block to also assess the discovery and without this appraisal the unitization negotiation cannot formally begin. Without an agreement between Pemex and Talos Energy on the unitization and operatorship of Zama, the project’s first production date will be delayed and the field will not contribute towards reversing Mexico’s domestic oil decline. In addition the Mexican Government has now hinted its interest in having operatorship of the field.
“Talos has actually moved quite fast in every step, from exploration to appraisal. This is contrary to critiques of the current Mexican administration with respect to new operators not investing enough in awarded areas.
“More importantly this situation will be a benchmark on the manner in which Pemex can lead future negotiations in joint developments and to how the government values the role of international operators.
“During 2019 Pemex has been focusing on 22 priority fields but only two of these have started development. The fields with approved development plans are already behind on awarding contracts to begin drilling and will most certainly suffer delays in their start date as a result. Moreover, their aggregated peak will be later than expected and less than the indicated 700,000 barrels per day (bd) of oil.
“Given the current objective for the Mexican Government in rapidly reverting Mexico’s oil production decline, Zama should in principle be a priority field for development.”
Russia is expected to lead the Former Soviet Union’s (FSU’s) oil and gas new-build trunk/transmission pipeline length additions, contributing around 84% of the region’s planned and announced pipeline length additions between 2020 and 2023, says GlobalData, a leading data, and analytics company.
The company’s report, ‘Global Planned Oil and Gas Pipelines Industry Outlook to 2023 – Capacity and Capital Expenditure Outlook with Details of All Planned Pipelines’, reveals that Russia is expected to have new-build pipeline length of 10,497 km by 2023.
Adithya Rekha, Oil and Gas Analyst at GlobalData, comments: “In Russia, a total of 24 new-build pipelines are expected to start operations by 2023. Nord Stream 2 is the longest upcoming pipeline in the country with a length of 2,400 km. It is a shallow water natural gas pipeline expected to start operations in 2020. Gazprom owns a 100% equity stake in the project, while Nord Stream 2 AG is the operator.”
GlobalData expects Turkmenistan to be the second-highest contributor to the region’s new-build pipeline length additions by 2023 with a length of 1,000 km. The entire length is expected to be contributed by a planned pipeline – Central Asia–China Line D. It is an onshore natural gas pipeline that is expected to start operations in 2022. Trans-Asia Gas Pipeline Co Ltd owns a 100% equity stake in the pipeline project and is also its operator.
Rekha concludes: “Ukraine ranks third with a length of 396 km from an announced pipeline – Brody–Adamowo. It is an onshore crude oil pipeline planned to start operations in 2023.”
Saudi Aramco is continuing to focus significant efforts on crude oil expansion, according to GlobalData, a leading data and analytics company.
The company’s report, ‘Saudi Aramco After IPO – Company Overview and Development Outlook’, reveals that five major expansion projects – four crude and one natural gas – are being planned to boost output in the country.
One eighth of the world’s crude oil from 2016 to 2018 was produced by Saudi Aramco. As well as being the world’s largest oil producing company, it is also the most reliant on oil production, with 88% of its total 2018 upstream production coming from crude.
Somayeh Davodi, Oil and Gas Analyst at GlobalData, comments: “The major expansions at Saudi Aramco’s offshore oil fields of Marjan, Zuluf, Safaniyah and Berri are expected to comprise the majority of the company’s upstream investment over the next three years. Although these developments will also add gas and NGL capacity, the main addition will be oil.”
In 2018, the company’s MSC capacity (maximum barrels of crude oil that can be produced during a year) was 12 million barrels per day (bd) with 10.5 million bd oil produced plus the remaining 1.5 million bd available as spare capacity. This capacity allows flexibility to respond to market supply and demand fluctuations. The new expansions will add 1.45 million bd additional oil capacity.
Davodi adds: “Future production, including the ability to realize output gains from new capacity additions, is likely to be highly dependent on OPEC quotas. Production cuts are set to continue into 2020, but could be extended further.”