Company Newsletter Subscription: If you are not yet a subscriber to this email, please fill out the subscription form.
"Implications of OPEC’s announcement of new production targets on oil market balances", a commentary by Bjørnar Tonhaugen, VP Oil Markets On 28 September, OPEC issued a statement following the Extraordinary Meeting on the sidelines of the International Energy Forum, stating, “The Conference opted for an OPEC-14 production target ranging between 32.5 and 33.0 mb/d, in order to accelerate the ongoing drawdown of the stock overhang and bring the rebalancing forward.” Contrary to news flow leading up to the meeting, OPEC essentially reached a consensus in order to reintroduce a “target” for their collective crude production, which was abandoned at the Dec-15 OPEC meeting. Based on our understanding, the deal includes exemptions for certain countries which have experienced production disruptions, including Nigeria and Libya. The OPEC committee will likely propose country-specific targets/caps on the remaining members’ production at the Ordinary OPEC meeting on 30 November. Read more
"Permian Midland" by Sona Mlada, Senior Analyst (Published by Oil & Gas Financial Journal, September Edition) Since the beginning of June 2016, Permian Midland has surpassed Permian Delaware in terms of activity and has become the play with the highest number of active horizontal rigs. As of August 5, 2016, there were 81 horizontal rigs running in the play, which represents over 22% of the total active rig fleet in the US shale. For comparison, there are 29, 31 and 78 active rigs in the Bakken, Eagle Ford and Permian Delaware, respectively. Permian Midland has been the play with the fastest recovery of the number of running rigs among all US shale plays; since the bottom of 53 horizontal rigs in April 2016, it grew its fleet by over 52% until now. Read more
"Exploration activity is becoming more diversified in South America" by Espen Erlingsen, VP Analysis (Published by GeoExpro, September Edition) Historical offshore exploration activity in South America had been dominated by Brazil. Over the last two years, this picture changed, as drilling activity in Brazil declined and activity grew in other parts of the region. At the beginning of this decade, Brazilian exploration activity peaked at more than 120 exploration wells drilled per year. Petrobras and OGX led the charge by exploring the Campos and Santos basins. Since then, the exploration activity has declined in Brazil. In 2015 35 exploration wells were drilled and the number will continue to fall to ~20 wells this year. Read more
"What will it take to keep Russia’s oil production stable?" by Olga Kerimova, Senior Analyst, and Veronika Akulinitseva, Analyst (Published by PESGB Newsletter, September Edition) Russia’s oil production is expected to remain at almost 11 million bbl/d for the next three years, thanks to the contributions from projects currently under development, while unsanctioned fields are needed to further offset the production decline after 2020. While Russia’s discovered oil resources yet to be sanctioned are significant, these will take time and substantial investments to develop. This article assesses the status and outlook for Russia’s E&P, illustrated by the three key drivers: production, exploration success and spending. Read more
"Offshore vs. Shale - shale positioned for a strong recovery" Investments in the E&P industry peaked in 2014 at 900 BUSD globally. In response to the changing oil price, operators decreased activity unanimously across all supply segments by an average of 40% in 2016 since 2014. Operators have however differentiated between the segments, decreasing shale investments by 66%, and offshore investments by a milder 34% since 2014. As the oil price is expected to increase over the next few years, the question is: which source of new production will have the greatest growth? Read more
"Oil Service Margins - Down but not out" Two years down the road of the downturn in the oil and gas industry, service companies have faced significant pricing pressure from E&P companies. In the search of price cuts, oil and gas operators have turned over every stone of the service industry, but offshore suppliers are more “heavy” than shale and have not given away too much of their margins yet. Read more
"South America’s Offshore Boom: Exxon discovery in Guyana" by Kjetil Solbrække, SVP South America (Published by Offshore Engineer, September) The South American offshore market is back on the heat map. Exxon has confirmed the giant Liza discovery and is expected to fast track the project towards sanctioning in 2017. Together with recent news that Petrobras’ divestment process has finally commenced on the Carcara discovery, a divestment to Statoil for 2.5 billion USD, increases the expectations towards the offshore market in South America. Read more
New times calls for new actions. Now is the time to revise strategies for oil and gas exploration.
The Economics of the E&P industry has gone through fundamental changes, both in terms of revenue but also in terms of cost reductions and efficiency gains. Furthermore, the conventional oil and gas industry is threatened by other sources of energy, such as unconventional oil and gas production and renewable energy, and by the growing concerns related to climate change. On top of this, exploration results over the last two years have been very disappointing both globally and on the NCS in particular.
This calls for a rethinking of exploration strategies. The goal of this conference is to provide valuable insights and input into the strategy update processes that are currently taking place, both on the industry, national and company level.
NCS Prospects – The Exploration Strategy Conference – organized jointly by GeoPublishing and Rystad Energy, brings together the larger exploration North Sea community to exchange expert insight and discuss how to go about exploration in a short and long term perspective.
During the two-day conference and exhibition, we gather a multitude of players on the Norwegian Continental Shelf – governmental organizations, oil companies, oil service companies, the financial industry and consultants – in an attempt to investigate the future of exploration in mature and frontier basins.
Do we need a new licence policy?
Is it necessary to increase the APA-areas?
Should we drill more wildcats?
How do we go about new technology?
Can the workflow be more efficient?
We open up the exhibition floor for oil- and service companies to showcase their licenses, prospects and strengths in order to fuel the conversation on where your business goes next.