MD of Douglas-Westwood Stephen Kopits, Presentation to Center for Strategic and International Studies, Washington DC (no url): Conclusions: “US shale gas remains an important source of supply, but heady days of growth are probably over. Growth has fallen dramatically (all lower 48) from 12% in July 2012 to 3%. Coal to gas switching has reversed since Q3 2102.” “Natural gas prices are likely to increase—furthering gas headwinds for the economy.
Shale oil has performed spectacularly, but expectations are probably over- blown. We forecast another 1.4-1.7 mbpd increase, mostly through 2016. Crude oil + NGL production up 4.1 mbpd in last seven years (0.7% per annum). Conventional production down 2 mbpd, net about zero with Iraq and Oil Sands offsets • Only sources of growth are NGL: 2 mbpd—not oil; and US shale / tight oil: 2 mbpd—which is oil—and the only real source of net oil supply growth.
Current Bakken production around 750 kbpd. But growth rates are falling precipitously. Technical analysis suggests a 900 kbpd peak in 2016/17 • +0.2 mbpd to peak. Current Eagle Ford 840 kpbd, fantastic growth to date. Bu rapidly declining growth rate suggests plateau at 1.2 mbpd • +0.4 mbpd to peak.
Shale oil has performed spectacularly, but expectations are probably over- blown. We forecast another 1.4-1.7 mbpd increase, mostly through 2016. Crude oil + NGL production up 4.1 mbpd in last seven years (0.7% per annum). Conventional production down 2 mbpd, net about zero with Iraq and Oil Sands offsets • Only sources of growth are NGL: 2 mbpd—not oil; and US shale / tight oil: 2 mbpd—which is oil—and the only real source of net oil supply growth.
Current Bakken production around 750 kbpd. But growth rates are falling precipitously. Technical analysis suggests a 900 kbpd peak in 2016/17 • +0.2 mbpd to peak. Current Eagle Ford 840 kpbd, fantastic growth to date. Bu rapidly declining growth rate suggests plateau at 1.2 mbpd • +0.4 mbpd to peak.
Net growth in the global oil supply is entirely leveraged to US shale production increases.
US GoM is 600 kbpd off its pre-Macondo peak. The basin is unlikely to ever reach previous highs, although an expansion by up to 300 kbpd is possible.
Alaskan oil production continues to erode. Government policy is uninformed and endangers the Alaskan economy.
The oil majors have reached the Rubicon. Future capital intensive developments will be assessed more critically. Expect material revisions to high capex project deck. Houston will see increasing stress and decreasing visibility over the next twelve months.”
US GoM is 600 kbpd off its pre-Macondo peak. The basin is unlikely to ever reach previous highs, although an expansion by up to 300 kbpd is possible.
Alaskan oil production continues to erode. Government policy is uninformed and endangers the Alaskan economy.
The oil majors have reached the Rubicon. Future capital intensive developments will be assessed more critically. Expect material revisions to high capex project deck. Houston will see increasing stress and decreasing visibility over the next twelve months.”
