Non-OPEC liquids growth potential of 5.5 million barrels per day (bpd) over the next five years has been reduced by over 2 million bpd to 3.3 million bpd, according to Rystad Energy’s most recent forecasts.
Latest oil field research shows investments in oil and gas production are estimated to drop 20% in 2015 compared to 2014. Outside OPEC, 200 BUSD in yearly capex is considered to be axed over a two-year period. Ultimately, for every billion dollars being cut in development capex on marginal projects, the production shortfall would amount to 10 thousand bpd. Only US production has been visibly impacted with the trend turning from 20% annual growth during the first quarter of the year to a flat trend in the second quarter. The shortfall of global offshore production may be steeper if oil prices stay low throughout the year.
“In the longer run, anything below 90 USD/bbl is not sustainable due to this steep but delayed supply response and increasing global base declines, while the cost of new production will remain high,” says Rystad Energy’s oil trade analyst Nadia A. Martin, formerly Phibro and Morgan Stanley.
*Rystad Energy’s analyses of US and global supply forecasts are now available via Bloomberg Professional Services.
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About Rystad Energy
Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products.
Rystad Energy’s headquarters are located in Oslo, Norway, with additional research teams in India. Further presence has been established in the UK (London), USA (New York & Houston), Russia (Moscow), Africa as well as South East Asia.