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World Oil Supply

OPEC Monthly Oil Market Report – August 2017

49

production in 2016 is estimated to be 5%, while it was 6.7% in 2015. It is expected that the production ramp

up of the offshore Ku-Maloob-Zaap Project (K.M.Z) field will continue in 2017 and 2018, increasing by 43 tb/d

and 37 mb/d, respectively. Nevertheless, according to the current crude oil production trend, an output of

less than 2 mb/d in July and deeper output in August following maintenance works in K.M.Z, is anticipated.

Minor increases are also expected in 2017 from smaller fields such as Ayatsil-Tekel-Utsil, Roza Rica,

Chicontepec, Veracruz and Apertura. In terms of annual decline rate, according to the average crude oil

production in 1H17 at 2.02 mb/d, it shows a of 187 tb/d compared to 1H16 which indicates a decline of 8.5%

pa. Consequently, oil production in Mexico is likely to fall by 0.17 mb/d to average 2.30 mb/d in 2017. If this

is the case, a decline of at least 170 tb/d is anticipated for 2018. It is expected the Mexican oil production will

recover through several upstream projects over the coming years. For example, shallow-water Block 6 in the

Gulf of Mexico’s Salina basin has been awarded to a 50-50 partnership with Colombia’s Ecopetrol and

Malaysia’s Petronas. Block 6 did not receive bids in Mexico’s oil and gas bid round last December.

OECD Europe

Total

OECD Europe oil supply

is expected to decline by 10 tb/d to total around 3.80 mb/d in 2017, an

expectation unchanged from the previous

MOMR

. While growth is expected for Norway and other European

producers in 2017, a decline of 30 tb/d is anticipated for the UK. For 2018, a growth of 0.08 mb/d is expected

y-o-y, mainly from the UK, with an average annual supply level of 3.88 mb/d.

Norway

Norway’s oil supply

is expected to grow by 0.02 mb/d y-o-y, to average 2.01 mb/d in 2017. Preliminary

Norwegian liquids production figures for June 2017 show an average daily production of 1.88 mb/d of oil,

NGL and condensate, which is a decrease of 116 tb/d compared to May. The breakdown of average daily

liquids production in June was: 1.55 mb/d of oil, 0.31 mb/d of NGL and 24 tb/d of condensate. Oil production

is about 8.0 % above the figure from June last year. Oil production is about 1.3 % above the Norwegian

Petroleum Directorate (NPD)’s prognosis so far this year. According to the NPD, final production figures from

May 2017 show an average daily production of about 1.635 mb/d of oil, and 0.365 mb/d of NGL and

condensate. The Gina Krog field on the Utsira High in the North Sea, which is operated by Statoil and

produces 60 tb/d, started producing on 30 June. The recoverable reserves in Gina Krog total about 106 mb

of oil, 11.8 billion standard m3 of gas and 3.2 million tons of NGLs. This means that three out of the four

fields on Utsira High are producing.

At the end of July, Statoil and its partners have started production on the Byrding field as planned.

Recoverable volumes in Byrding which is an oil and gas field north of the Troll field in the North Sea are

estimated to be 11 million barrels of oil equivalent. The field is expected to produce nearly 8 tboe/d at its

peak in 2017-18. For 2018, Norway’s oil supply is forecasted to see a decline of 10 tb/d. Total production is

expected to be around the same level as 2017 at 2.01 mb/d. The decline rate in 2018 is anticipated to offset

the new volume added from production ramp ups.

Graph 5 - 18: Norway quarterly oil supply,

2016-2018

Graph 5 - 19: UK quarterly oil supply,

2016-2018

1.8

1.8

1.9

1.9

2.0

2.0

2.1

2.1

2.2

1Q

2Q

3Q

4Q

mb/d

2016 2017 (Forecast)

2018 (Forecast)

Source: OPEC Secretariat.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1Q

2Q

3Q

4Q

mb/d

2016 2017 (Forecast)

2018 (Forecast)

Source: OPEC Secretariat.