Weekly Post: BP Energy Outlook 2040- oil

Weekly Updated

stocks
Source:eia
oil price
Source:eia
rig
Source: Baker Hughes

BP Energy Outlook 2040- oil

Energy Transition through three different lenses: sector, region and fuels

  • In the ET scenario:global energy demand grows significantly slower than in the previous 25 years. The industrial sector accounting for around half of the overall increase. Growth in transport demand is much slower than in the past, reflecting faster gains in vehicle efficiency.
  • By region, all of the growth in energy demand comes from fast-growing developing economies, driven by increasing prosperity. China, India and other emerging Asia account for around two-thirds of the growth in energy consumption
  • Natural gas grows much faster than either oil or coal. The energy mix by 2040 is the most diversified ever seen

China’s Energy needs are changing: slower demand growth and a shift towards lower carbon fuels

  • China’s energy mix changes significantly, driven by its shifting economic structure and its commitment to move to cleaner, lower carbon fuels.
  • In the ET scenario, slowing demand growth and the shift towards lower carbon fuels causes China’s carbon emissions from energy use to peak in the mid-2020s.

 

2010-2040

  • China’s coal intensity declines sharply, with its overall coal consumption falling, more than offset by a large rise in renewable energy. Indeed, the largest growth of any energy source at a regional level is the increase in renewables in China.

The US extends its lead in oil and gas production but share of global trade remains small

IMBANLANCE

  • US remains the world’s largest consumer of gas and second-largest consumer of oil. As such, in the ET scenario, its net exports account for only a relatively small share of overall world trade. In 2040, the US exports 360 Mtoe of oil and gas combined, equivalent to only around 9% of global trade in oil and gas in 2016, and less than half that of Russia (780 Mtoe in 2040) – the world’s largest exporter of oil and gas.

 

 

 

Source from BP Energy Outlook 2018

 

 

Weekly Post: LNG

Weekly Updated:

oil price
Source:eia
stock
Source:eia
RIG COUNT.emf
Source: Baker Hughes

 


LNG

What is LNG?

Liquefied natural gas (LNG) is natural gas (predominantly methane, CH4, with some mixture of ethane C2H6) that has been converted to liquid form for ease and safety of non-pressurized storage or transport.

1.1/600th the volume of natural gas in the gaseous state

2. It is odorless, colorless, non-toxic and non-corrosive

LNG Process

process

LNG Export and Import by Country (2016&2017)

 

 

  • Two Figures above shown the LNG Export and Market share from 2016-2017 by countries. Most countries maintain a stable market share, with the exception of US. At 2016, US only shares 1.1% of the market, while at 2017, US takes up 4.5% market, ranking 6th among all LNG export Countries.

 

  • Japan, S.Korea and China are major LNG importer. Especially for Japan, it takes almost 1/3 of the total import market.
  • China’s LNG imports rose 47% from 2016 to 2017.

Existing North American LNG Import/Export Terminals

existing

  • There are 12 existing Import Terminals and 3 existing Export Terminals at US.

approved

  • 4 new import terminals are approved and one of them is already under construction.
  • There are 9 new Export Terminals are approved. 5 of them are under construction. Most of the new Export Terminals are located at Texas and Louisiana.

Liquefaction plants at US.liquefaction

 

  • US now has 5 Liquefaction Plants, and 12 Plants will be completed in the future.

LNG Condition in China

  • China’s First LNG Receiving Terminal (2006) located at Guangdong. The Nameplate Capacity is 6.8MTPA.
  • Up to now, there are 13 complete Receiving Terminals at China. 7 new receiving LNG Terminals are under construction.
  • The figure below shows China’s Liquefaction Plants Location.

china lng

Reference:
  1. http://www.mrmodern.com/love/26873.html
  2. IGU 2018 World LNG Report
  3. IGU 2017 World LNG Report

 

Weekly Report: What is DUC? Why is important?

Weekly update:

price
Source:eia
stock
Source:eia
rig
Source: Baker Hughes

What is DUC? Why is important?

  • What is a DUC? It is a well that has been drilled but is awaiting completion services.
  • Why DUC?why DUC
  • How many DUCs are there in the United States?
    DUC
    Source:eia

    Until May 2018, the DPR (drilling productivity region) had 7772 DUCs. The region includes Bakken, Niobrara, Permian, Eagle Ford, Haynesville, Appalachia and Anadarko.

    2018-06-30 上午11.34.30
    Source:eia

 

  1. The UDC count in Crude oil region keeps increasing until April 2016. From October 2016, there is an obvious DUC count increase of Permian basin which is different compared with other region. Completion crews, water handling, and other infrastructure constraints mean that the Permian’s DUC well inventory is likely to continue to grow and take time to work off.
  2. The DUC count in gas region has generally been in decrease except count in Anadarko. There are 400 counts increase within 8 month from December 2016 to August 2017.
  • Why DUC is important?
  1. As an operator you need to understand where all competitor DUCs are located to make tactical decisions about what assets to buy or sell, which company owned DUCs make sense to bring online, and how much leverage to use with vendors.
  2. For oilfield service companies looking to complete DUCs you need to get there before the competition by identifying which DUCs will most likely be completed based on assumed breakeven oil prices.
  3. For equity and debt analysts, you need to know the most accurate value for E&Ps DUCs inventory to make well informed equity and debt investments.
  4. Like potential energy, the DUCs are there and can be released when the right switches — around prices, capital and available infrastructure and labor — get thrown.
Reference:
1. https://www.bloomberg.com/gadfly/articles/2017-07-19/opec-oil-price-hopes-must-face-u-s-shale-ducs

2. https://energylawtoday.foxrothschild.com/2016/06/articles/fracking/get-your-ducs-in-a-row/

3. https://info.drillinginfo.com/drilled-but-uncompleted-wells-ducs-in-a-row 4.https://seekingalpha.com/article/4132811-permian-basin-duc-wells-112-percent-y-y-backlog-grows-2613-duc-wells

Weekly Report: What is OPEC?

Weekly Update:

oil price
Source:eia
Rig
Source: Baker Hughes
Stock
Source:eia

What is OPEC?

The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

OPEC’s objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry. OPEC had its headquarters in Geneva, Switzerland, in the first five years of its existence. This was moved to Vienna, Austria, on September 1, 1965.

The consist of OPEC

2018-06-23 下午5.45.02

OPEC Proved Oil Reserve and Production

  • OPEC takes up more than 60% of world oil reserve.
  • Over 40% of oil production of the world is from OPEC.

OPEC Oil Production and Consumption

productionVSconsumption

Production Between OPEC Member

percentage

  • The top four OPEC producers are Saudi Arabia, Iraq, Iran and Kuwait, which account for 70 percent of OPEC’s output.

Imported Crude Oil of China from OPECchina

 

  • OPEC supplies 55% of China’s crude oil imports.

 

Source: 
1.eia
2.http://www.opec.org
3.General Administration of Customs/ people's Republic of China
4.Bp Statistical Report

Weekly Report: The History of Oil Price

Weekly Updated

price
Source: eia
rig
Source: Baker Hughes

The rig activity is positively correlated with oil prices.

stock
Source: eia

 

The History of Oil Price

oil history

  • During 2011-2014, Brent Oil Price is higher than WTI Oil Price which is not as usual. This is because the lack of Libyan crude has pushed up the premium buyers are willing to pay for grades such as Brent and WTI began to sell at a discount to Brent due to a strong increase in midcontinental production after 2010.

 

Source by: eia