Connect with us

Oil

OPEC sees less demand for its oil to 2018 amid shale boom

Published

on

LONDON – OPEC acknowledged it underestimated the significance of the North American energy boom as it tripled estimates for shale oil produced there and predicted a decline in demand for its own crude through to 2018.

The need for crude from the Organization of Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world’s oil, will fall by 1.1 million barrels a day to 29.2 million barrels a day between 2013 and 2018, the Vienna-based group said Friday in its annual World Oil Outlook. Oil production from shale formations in the U.S. and Canada is seen climbing to 4.9 million barrels a day in 2018, compared with an estimate of 1.7 million barrels a day in last year’s report.

“The big picture is obviously surging shale production,” Mike Wittner, head of oil market research at Societe Generale SA, said in a interview before the release of the report.

OPEC’s analysis shows how growing oil output in North Dakota and Texas will prevent the 53-year-old group of 12 oil producers, mostly situated in the Middle East, from capitalizing on the 4.8 million barrel-a-day increase in oil demand it expects over the next five years.

OPECThe supply surge has also contributed to a decline this year in the price of oil grades on the U.S. Gulf Coast that influence the price of exports from Saudi Arabia, Kuwait and Iraq. The Gulf crude Mars Blend has fallen 12 percent this year to $93.05 a barrel yesterday, according to data compiled by Bloomberg.

Development of shale deposits will push combined U.S. and Canadian oil output to 16.9 million barrels a day by 2018, from 14.8 million this year, according to OPEC’s outlook report. It assumes there’ll be no development of such resources outside North America over the next two decades.

“Until three years ago, oil and NGLs production from the U.S. was considered to be on a long-term trend of slow, but steady decline, after having peaked in 1970,” OPEC said.

“Surging production from tight oil plays and NGLs from shale gas plays has transformed the U.S. supply outlook,” it said in its latest report.

Total oil output from countries outside OPEC, including non-crude sources such as natural gas liquids, will increase to 59.3 million barrels a day by 2020, from 52.9 million last year. This will reduce OPEC’s share of the global oil market to 39 percent at the end of the decade, from 41 percent last year.

Shale oil production in the U.S. and Canada will hit a plateau from about 2017 because of the steep decline in output from wells, a transition away from the most productive “sweet spots” in rock formations, environmental concerns and rising costs tied to the availability of equipment and skilled labor, OPEC said.

“The rapid acceleration of tight oil supply in the U.S., and, to a degree, in Canada, is not thought to be sustainable over the long term,” the report said. Demand for OPEC crude will rebound after 2018 as shale production begins to falter, it said.

OPEC kept estimates for global oil demand growth through to 2018 in line with those it published last year. World oil consumption will increase by an average of 900,000 barrels a day each year to reach 94.4 million a day in 2018, driven by growth in emerging economies.

Consumption in those nations will increase to 44.4 million barrels a day in 2018, from 38.9 million barrels a day this year, overtaking demand in developed nations in the second half of 2014, according to the report.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Oil

FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry

Published

on

In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.

The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.

The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.

Read Also: Atiku Calls For Rotational Presidency Across Nigeria’s Geopolitical Zones

These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.

The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.

This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.

These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.

The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.

 

Continue Reading

Business

Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative

Published

on

By Yemie Adeoye

NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.

The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.

“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”

The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.

“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.

Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.

Continue Reading

Oil

ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations

Published

on

As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.

Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”

Read Also: Offset Accuses Cardi B Of Cheating During Pregnancy

This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.

Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.

We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.

“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.

On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.

 

Continue Reading

Copyright © 2022. Biztellers, powered by Alphaxristi.