August 2017 UPDATE

UPCOMING EVENTS

Rystad Energy Annual Summit
October 4-5th, 2017
London, United Kingdom

"Market Intelligence Future Outlook: Exploring New Markets for FPSOs and the Challenges in Setting Up Operations in Untested Markets"
Jon Fredrik Muller, Partner
FPSO World Congress 2017
September 27, 2017
Singapore, Singapore

"FPSO 101: Integrating FPSOs Effectively into a Field Development"
Jon Fredrik Muller, Partner
FPSO World Congress 2017
September 25, 2017
Singapore, Singapore

Rystad Energy Annual Summit
September 19-20th, 2017
Houston, Texas, United States

Rystad Energy Exhibition Stand at Offshore Europe
Stand 2B34
September 5-8th, 2017
Aberdeen, United Kingdom

Rystad Energy Information Session - Offshore Europe
September 6th, 2017
Aberdeen, United Kingdom


WEBINAR RECORDINGS

NAS Solutions - Product Webinar

Speaker: Artem Abramov, VP of Analysis 

Request Recording


OFS Solutions - Product Webinar

Speaker: Jo Friedmann, Analyst 

Request Recording


E&P Solutions - Product Webinar

Speaker: Thomas Liles, Analyst

Request Recording

 


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INDUSTRY VIEW

"The evolving player landscape in the offshore drilling market"
During the first half of 2017, the industry witnessed the first moves towards consolidation in the offshore drilling sector. In early August, Transocean announced plans to acquire Songa Offshore making them the second driller to step up and make an acquisition this year. This is also the second major move on a strategic level for Transocean after the announcement of the divestiture of their jackup fleet to Borr Drilling, which took place during Q2 2017.

"Northwest Europe offshore wind market set for a boom" by Marius Kluge Foss, Project Manager, Rystad Energy
(Published by Offshore Magazine)
Europe has been the cradle for offshore wind. Historically, Germany and the UK have been the largest installers, with the UK having the largest installed base of offshore wind capacity in the world. However, 2016 saw a low, partly due to Germany struggling with intermittency in its power grid, but this is expected to turn and the outlook for German offshore wind looks promising.

"US Shale - recovery amid low oil prices"
Tight oil production in the United States has been growing steadily over the last years, with negative additions only experienced for the first time last year. Production growth is expected to recover this year, and is projected to increase by over one million bbl/d year-over-year on average in 2018-2020. This article examines the fundamental drivers behind this growth: drilling efficiency, well performance improvements and reduction in breakeven prices, focusing on the top US oil plays.

"BHP’s shale portfolio is valued at 7.5 BUSD at 60 USD/bbl WTI" by Oleksii Shulzhuk, Senior Analyst, Rystad Energy
BHP Billiton, the world’s top mining company and one of the leading US shale producers, has confirmed plans to sell its US shale assets. The decision was partly triggered in response to pressure from investors, including the hedge fund Elliot Management, who called for a divestment of a shale portfolio it saw as poorly timed and expensive, preferring the company to concentrate on its core business.

"Fracking activity on the rise in 1H 2017, but proppant intensity is slowing down"
Although rig counts are an important predictor of short-term supply that is widely used in the industry, it is rather completion activity that has the most predictive power when it comes to short-term production forecasting. For instance, shale recovery in rig counts has persisted since mid-2016, but completions were flat in 2H 2016, resulting in accumulation of inventory of drilled but uncompleted (DUC) wells rather than new wells turned-in-line straight away. Therefore, completion activity plays a primary role when it comes to short-term production trends.

"The effect of oil price cycles on investorsby Nadia Martin Wiggen, VP Oil Markets
(Published by Oil & Gas Financial Journal)
During the summer months, what is normally peak seasonal demand for oil in the US, we see the oil market struggling to break out to higher prices, instead maintaining a trading range lower than the 2017 peak. While activity levels by North American shale producers have risen since the start of 2017, we see share prices for oil companies have retreated from Q1 2017 highs. Since May 2017, we again see share prices in the oilfield service sector have collapsed faster than the index of exploration and production (E&P) companies like we saw in 2008.

"Shale producers on track to deliver all-time high Q3 volumes, while defending cash flow balance" by Espen Erlingsen, Partner, Rystad Energy
At the beginning of 2017, shale producers were aggressive in their spending and production guidance, with investments expected to be up more than 50% this year. Since then, the shale producers have been squeezed on several fronts. Lower oil price has reduced revenue, costs have increased for many operators as activity started to pick up again, efficiency gains have started to diminish, and well performances have entered into a stagnation mode.

"Transocean’s Acquisition of Songa Offshore strengthens position in floater market" by Oddmund Føre, Senior Analyst, Rystad Energy
Activity in the offshore drilling sector is picking up. However, it is not contracting activity but merger activity that is starting to gain traction. Transocean is the second driller to step up and make an acquisition this year. This move follows the divestiture of their jackup fleet to Borr Drilling, which took place during the second quarter. Prior to Ensco’s announcement to acquire Atwood Oceanics, there had only been a handful of second-hand rig transactions. 

RYSTAD ENERGY ANNUAL OIL & GAS SUMMITS 2017

Rystad Energy has the great pleasure of inviting you to our Annual Oil & Gas Summits 2017. This year our key events will take place in Houston and London. Join us to hear about our up-to-date market analyses and overview, industry perspectives and data analysis discussions.

September 19-20, 2017
Houston, United States
October 4-5, 2017
London, United Kingdom

The Annual Oil & Gas Summit is free to attend for client companies. To request more information, please vist our dedicated website here. For queries about non-client pricing, please contact Rystad Energy.