OPEC Must Extend Production Cuts to Balance Market
The World Drilling and Production Market Forecast is our key report on the two most-important leading indicators for the industry.
In context with OPEC’s decision to extend production cuts until the end of 2018, the report features a detailed outlook on the supply-demand balance influenced by this, covering the period of 2018-2024.
Based on detailed project data and proprietary models, each of the 70 covered countries are examined in turn and include a summary of hydrocarbon potential and sensitised production outlook for the onshore sector, in addition to shallow vs. deep water analysis for the offshore sector.
2015-2022 supply-demand balance: extended vs no extension OPEC cut
Source – Sectors
- OPEC exceeded on its output reduction targets in 2017, eroding excess crude oil stockpiles. With the extension of the cuts to the end of the year, Westwood estimates this will push the market into a deeper 0.9 mmbbl/d deficit.
- The glut is expected to clear before the end of the year, providing the agreement participants stick to their quotas in 2018 to offset gains from Brazil, Canada, the US and the UK.
- Gas production globally is expected to rise rapidly over the forecast period, with much of the gain coming from deepwater sources in India, the Mediterranean and Mozambique.
- Africa’s deepwater output will experience strong growth (24%) over the forecast period as large projects sanctioned during high oil prices are implemented, with a focus on gas.
- Brazilian hydrocarbon production is predicted to grow 21% by 2024, largely due to the continued development of the country’s huge pre-salt fields.
- US onshore drilling activity is expected to rise at a CAGR of 11% over 2018-2024, with onshore production growing 3% year-on-year over the same period.
The World Drilling and Production Market Forecast also features a summary of hydrocarbon potential and sensitised production outlook with associated development drilling requirements, as well as detailed country-by-country exploration and appraisal (E&A) drilling forecasts for both the onshore and offshore sectors. Also new this quarter – the addition of Cambodia and Papua New Guinea to the report coverage.