Archives for category: offshore oil production

Covid-19 has been a tough blow to the offshore sector. The sector has had a difficult last half decade, with the boom-times of >$100/bbl oil receding into the rear-view mirror. Although utilisation and dayrate levels began to tick up in 2019, the outlook was significantly weakened by Covid-19. Tracking the key indicators on how offshore markets are developing will be important as the downturn plays out.

For the full version of this article, please go to Offshore Intelligence Network.

Last week’s Analysis took a long-term view of seaborne trade. This week, we look at the history of global oil demand, a key driver of seaborne trade (crude and products trade totalled 62m bpd last year, 25% of the total in tonnes), offshore oil production (25m bpd), and oil prices. In 2020, the now global spread of Covid-19 is leading to major disruption to oil demand, and the ‘long’ view provides an interesting context.
Shipping Intelligence Network.

The Middle East is a significant yet mature area of offshore oil production, accounting for some 28% of global offshore supply from a range of fields, some of which have been producing since as early as the 1950s. A smaller part of the global offshore investment story historically, the region has come to the fore in 2019 as a number of large projects have reached FID in a still challenging global offshore market.

For the full version of this article, please go to Offshore Intelligence Network.

 

Following the recent oil price plunge, US shale oil production growth has been in the headlines once again, this time as one of the main factors behind the latest slide in oil prices. However, it can still be tricky to appreciate just how significant US shale oil output has now become to global oil markets. Comparing this year’s surge in output against some offshore benchmarks can be helpful.

For the full version of this article, please go to Offshore Intelligence Network.

Offshore is quite a project driven sector in the sense that work at offshore fields drives much of the demand for offshore vessels. But offshore is also project driven in the sense that offshore output growth is linked to field project start-ups. And since 28% of global oil production is offshore, the aggregate of individual offshore start-ups can potentially have significant implications for wider energy market trends…

For the full version of this article, please go to Offshore Intelligence Network.

The Middle East Gulf, which laps the shores of several major OPEC countries, holds 32% of the world’s 60 largest offshore oil fields, some of which have been active for 60 years. But though it is a mature area, in 2018 it is still projected to account for 28% and 34% of global offshore oil and gas production, with output having been supported by a large number of expansion, EOR and redevelopment projects.

For the full version of this article, please go to Offshore Intelligence Network.

The Middle East is a key component of global oil production. In total, it accounts for just under 25m bpd of oil output (or 30m bpd including NGLs), of which nearly a quarter is produced offshore. The Middle East also produces 63.5bn cfd of gas (64% offshore). The majority of Middle Eastern producers are OPEC members, so the group’s decisions have a large impact on production volumes in the region.

For the full version of this article, please go to Shipping Intelligence Network.

As recent history demonstrates, if the global oil supply-demand balance moves from a deficit of supply to a surplus, or vice versa, the effect on oil prices and hence the offshore sector can be far reaching. At present, as 2019 draws nearer, oil demand and supply look to be increasingly finely balanced. However, there are still a range of uncertainties that could significantly shift the current oil supply-demand outlook.

For the full version of this article, please go to Offshore Intelligence Network.

Since 1.73m bpd of oil output cuts were orchestrated by OPEC in November 2016, oil prices have risen from under $50/bbl to $70-$80/bbl, stimulating the upstream sector but making for a gloomy backdrop to challenged tanker markets in the last 18 months. With this context in mind and following the latest OPEC meeting, it is worth looking in detail at some of the ways OPEC policy has been influencing oil markets…

For the full version of this article, please go to Shipping Intelligence Network.

 

West Africa, which accounts for 16% of global offshore oil production, has been perhaps the most challenged region in the offshore downturn. Rig utilisation, for example, fell to a lower level (48%) than in any other region. But with oil prices currently back in the $70-$80/bbl range, there are some signs that things could be picking up, not least Total’s recent FID at the $1.2bn Zinia Ph.2 deepwater project off Angola.

For the full version of this article, please go to Offshore Intelligence Network.