OPEC oil production fell by 420,000 bpd from January to May 2018 as the continued political disruption in Venezuela and decline in Angolan oilfields resulted in significant output losses
The result of this disruption led to months of uncertainty for global supply, and subsequently oil prices. This uncertainty has been exacerbated by the expected re-introduction of the US sanctions on Iran from November 2018. In response, OPEC, at the June 2018 meeting, pledged to return to group-wide compliance of 100 per cent by ramping up output in Saudi Arabia and several other member nations.
As a result of OPEC’s production increase, Venezuelan, Angolan and Iranian losses will be partially offset. However, OPEC’s 2018 production will still decline by 481,000 bpd from 2017.
The US drilling activity increased sharply in H1 2018, leading to record oil production in June 2018. However, pipeline capacity bottlenecks in the Permian basin are expected to limit growth for the remainder of 2018 and 2019, causing operators to exploit other US basins.
The Q3 edition of Westwood’s ‘World Drilling & Production Market Forecast’ has highlighted the impact that geopolitical problems have had on global oil supply.
These losses, however, will be more than offset by significant growth in production elsewhere. Onshore activity in the US has increased markedly through the first half of 2018, with the majority of the expected 1.3 mmbbl per day 2018 liquids production additions having already been seen. However, bottlenecks in the Permian basin will result in a slowing of growth through the next 18 months. Several OPEC nations, including Iraq, Saudi Arabia and Kuwait, will also see significant additions of nearly two mmbbl per day in 2019.
In the longer-term, further gains will come from new deepwater plays away from the traditional ‘Golden-Triangle,’ such as ExxonMobil’s Stabroek block offshore Guyana. As a result, Westwood expects oil production to rally to 97.6 mmbbl per day in 2023.
According to the report, gas-targeted drilling will grow significantly, causing global gas production to reach 79.5mn boepd in 2024. This is driven by shifts in operator focus and large recent gas discoveries being developed, with particularly strong growth forecast in Australia, East Africa and the Mediterranean.
This report includes data and analysis for more than 70 of the most important energy producing countries, including detailed drilling and production data for each country covering the period 2008-2024.
