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World Oil Supply

54

OPEC Monthly Oil Market Report – September 2017

According to Norwegian Petroleum Directorate (NPD) data, oil production in July is about 7.0% below that of

the same month last year and about 0.7% below the NPD’s prognosis for July 2017. Oil production is about

1.2% above the prognosis so far this year and is expected to fall back again in August and even September

as field maintenance rises, with work planned at the Gudrun, Skarv, Valhall and Vigdis fields, impacting an

average of 0.05 mb/d of output across the month. In September this will continue at the Goliat field,

impacting 0.1 mb/d. NGLs and condensate increased by 0.09 mb/d compared with June. Oil production in

1H17 grew by 0.06 mb/d compared with 1H16, but this is expected to decline in 2H17 by 0.04 mb/d vs 1H17.

The oil supply forecast for 2017 was revised up by 0.01 mb/d to 2.02 mb/d, indicating annual growth of

0.03 mb/d, y-o-y. For 2018, a contraction of 0.01 mb/d is expected, to reach an average of 2.01 mb/d.

Graph 5 - 17: Norway liquids supply quarterly

forecast, 2016-2018

Graph 5 - 18: UK liquids supply quarterly

forecast, 2016-2018

UK

UK’s oil output

in July remained unchanged for the third consecutive month at 1.05 mb/d, down by

0.03 mb/d y-o-y. Output fell y-o-y by 0.02 mb/d in 1H17, despite the start-up of projects, including Ithaca’s

30 tb/d, Greater Stella, Repsol-Sinopec’s 40 tb/d Montrose, BP’s 130 tb/d Schiehallion, and Enquest’s

50 tb/d Kraken projects. Beginning of July, key fields were offline for work, including Forties and Britania for

some time however production returned from maintenance from fields such as Alma, Galia, Forties, Beryl

and J-Area. Peak UK field maintenance occurred in August when around 0.2 mb/d of production was taken

offline.

UK’s overall oil production in 2017 is predicted to decline by 20 tb/d y-o-y to average 1.01 mb/d, despite new

volumes from the continued ramp up of previous projects such as Kraken, Monarb, Flyndre and Greater

Stella. However, growth of 0.08 mb/d for an average oil supply of 1.08 mb/d is expected in 2018.

Developing Countries

The total oil production of developing countries

(DCs) is estimated to grow by 0.09 mb/d y-o-y to

average 12 mb/d in 2017, revised down by 0.02 mb/d in September compared with the previous assessment,

owing to downward revisions in Africa and Other Asia, mainly due some upward and downward revisions to

historical data in Malaysia, Asia others and South Africa. Preliminary supply data for July of 11.92 mb/d

indicates a m-o-m decline of 0.09 mb/d, which is 0.03 mb/d lower than a year earlier, though higher output is

expected to be seen in August m-o-m at 12.04 mb/d. Oil production is expected to increase in Latin America

by 0.15 mb/d to average 5.26 mb/d in 2017, mainly in Brazil where it is expected to rise by 0.26 mb/d, while

other countries in the region are anticipated to witness declines. Colombian oil production stood at 0.86 mb/d

in July, unchanged from June and 13 tb/d higher than a year ago. Production in Colombia fell due to

spending cuts from the largest upstream players as well as a number of outages. In Africa, a production

increase of 0.04 mb/d – primarily from Ghana and Congo – is expected for 2017 to lead to an average of

1.85 mb/d. The oil supply from Other Asia and the Middle East declined by 0.05 mb/d and 0.05 mb/d in 2017

and 2018 respectively to average 3.67 mb/d and 1.23 mb/d, respectively.

47

70

25

-40

-4

-20

2

-2

-60

-40

-20

0

20

40

60

80

1,850

1,900

1,950

2,000

2,050

2,100

2,150

1Q 2Q 3Q 4Q

2017/16 (RHS)

2018/17 (RHS)

2016

2017*

2018*

Note: * 2017 and 2018 = Forecast.

Source: OPEC Secretariat.

Y-o-y change (tb/d)

Production (tb/d)

-29

-7

-41

5

-7

-1

119

192

-100

-50

0

50

100

150

200

250

800

850

900

950

1,000

1,050

1,100

1,150

1,200

1,250

1Q 2Q 3Q 4Q

2017/16 (RHS)

2018/17 (RHS)

2016

2017*

2018*

Note: * 2017 and 2018 = Forecast.

Source: OPEC Secretariat.

Y-o-y change (tb/d)

Production (tb/d)