Oil Dodges Bears, Nears $52 Again
U.S. crude inventories up 1.8 mln barrels at 488.8 mln; OPEC output at 2017 high of 33 mln bpd. Oil shook off a raft of bearish headlines on Wednesday, as investors and traders took advantage of earlier losses and pushed the price back towards $52 and this week's eight-week highs. Brent crude futures were up 14 cents at $51.92 a barrel by 1125 GMT, up from a session low of $51.18.
Douglas-Westwood: The Great Global Gas Surplus
The production of LNG in recent years has increased dramatically. According to Westwood Global Energy data, LNG liquefaction capacity increased from 121 million tons per annum (mmtpa) in 2000 to nearly 270 mmtpa in 2010, and will reach just over 400 mmtpa by the end of 2017. A wave of ‘mega-projects’, each costing tens of billions of dollars…
Consolidation – A Path to Subsea Vessel Sustainability
In recent years, the speed with which newbuild vessels have entered the market has amplified the subsea vessel demand/supply imbalance, says a report by Douglas-Westwood London. This has been further exacerbated by sustained low oil prices, as operators defer the sanctioning of new offshore projects which could have supported vessel utilisation.
Offshore Vessel Contractors Re-shaping for a Rebound
The announcement on the February 28 of EMAS Chiyoda’s bankruptcy is the latest in a long line of vessel contractors to fall victim to the downturn since January 2015. Multiple companies such as Cal Dive, Ceona, Cecon, Hercules Offshore, Harkand and Swiber have entered into administration, taking a significant number of vessels out of the active fleet. In other cases, internal restructuring measures (e.g.
Douglas Westwood: Obama’s Legacy
As President Obama leaves the Oval Office on Friday, he leaves a legacy of mixed fortunes for the energy industry. While many in the business have been vocal critics of the 44th President and some of his more controversial legislations, there have been a number of positive aspects that occurred under the current administration.
Douglas-Westwood: Nowhere Fast
E&P deepwater exploration and appraisal activity has dramatically declined. In line with falling E&A activity, Reserve Replacement Ratios (RRRs) have been declining for the majority of major E&P companies. Douglas-Westwood highlights some of the positive newsflow from offshore E&A activity in recent times. Myanmar, once impeded by political and economic trade embargoes…
GE, Baker Hughes: Fullstream Ahead -Douglas-Westwood
Historically, the oil and gas industry has witnessed merger and acquisition (M&A) activity through cycles, as companies try to create value in volatile oil price environments. The current downturn has resulted in a number of M&A opportunities for suitably placed players, as illustrated below by Douglas-Westwood. However, last Monday’s…
Fracking’s Future Uncertain -Douglas Westwood
Hydraulic fracturing has been a hugely controversial subject in many countries and has increasingly become the focus of legislation in the U.S., as highlighted by industry analyst and consultant Douglas Westwood. The state of Colorado has seen the most recent push for new restrictions – activists have obtained over 200,000 signatures to introduce two new initiatives on Colorado’s November 8 ballot.
Steep Declines to Precede Land Rig Recovery
The global land rig market is predicted to see further compression in 2016, with the recovery forecast for the next four years. The international rig fleet is a critical enabler of global energy production but the quantity and quality of available information on both the international rig fleet and demand has historically been limited, particularly in core markets such as the Middle East, Asia and Russia.
AUVs: A Bright Spot in Uncertain Times
There are technologies that are finding success – despite the struggles seen elsewhere especially in a difficult time for companies operating in the oil and gas market, finding sectors that are performing well can be a challenge, says Douglas-Westwood London. Autonomous Underwater Vehicles (AUVs) have evolved in the last few years from an emerging technology with niche uses…
Douglas Westwood: Keep on Drillin’?
This year has seen US land drilling activities fall to the lowest levels on record. Globally we are seeing a very nuanced and regional reaction to the current oil price downturn. Examination of the global land rig fleet (which Douglas-Westwood tracks on a rig-by-rig basis) reveals some key themes. Having dominated the global land drilling market for living memory…
Offshore Opex Under Pressure
Reducing drilling and development spend has largely been the focus of services and equipment providers in the Gulf of Mexico – with the aim of lowering costs at the most capital intensive period of asset lifecycles. Often overlooked, Opex costs have grown in line with other upstream costs – 7 percent CAGR from 2010 to 2014 in the Gulf of Mexico.
Brexit is Now a Reality… Or is it? -Douglas Westwood
The decision by 52 percent of the voters in the EU referendum last week to vote to leave the EU has had far-reaching impact across the globe. The oil and gas sector, bruised from nearly two years of low oil prices, is bracing itself for the fall out. The immediate impact of the referendum outcome was a plunge in the value of the pound to a 30-year low of $1.34…
Douglas Westwood: A Bridge From Black to Green?
In recent years, liquefied natural gas (LNG) has become integral to meeting global energy demand. However, as the oil and gas industry continues to navigate the prolonged downturn, capital intensive export LNG projects have been in the spot light due to questionable economic viability. A key driver is oversupply in the global LNG…
Douglas Westwood: Brexit and Potential Threats to the Energy Industry
With the referendum rapidly approaching, the question of what Brexit could mean for the UK oil & gas industry has become increasingly intriguing. As a market broadly regulated in London, many argue that an exit vote would lead to no significant changes – at least in the short term. However, new uncertainties for the energy industry may emerge, should the UK decide to part ways with Europe.
Douglas Westwood: Has the Shale Oil Rig Count Finally Hit Bottom?
As an indicator of the turmoil that has hit the US oil & gas services sector the Baker Hughes rig count is hard to beat. From 1,931 rigs drilling in September 2014 the count has declined to a total of 408, dramatically reducing activity and jobs for drillers, service companies and suppliers alike. Unconventional activity has been hit hard.
Solar: Powering a Bright Future -DW
Solar PV – deployed in Europe for over two decades – can hardly be called a new technology. However, in recent years we have seen the rapid adoption of solar PV throughout America and Asia – particularly in India, China and SEA. According to Douglas Westwood (DW), solar is currently seen as a complementary source of power when compared to other renewable energy sources such as wind or thermal.
Middle East Bucking Market Trends -Douglas-Westwood
The Middle East has been a relative bright spot for upstream activity during the oil price downturn. International land rig contractors, such as Saipem, are actively focusing their strategy and drilling campaigns on the region in the attempt to limit the negative impact of low oil prices. Looking at drilling activity, it is clear…
Breaking Even in an Uneven Oil Market -Douglas Westwood
The Johan Castberg development has faced numerous challenges since inception. If production in the Barents Sea wasn’t difficult enough, Statoil has had to contend with changes to Norwegian Tax laws as well as disappointing drilling results. In May 2014, it was confirmed that of five exploration wells drilled in the area, only two yielded oil reserves: the Skavl and Drivis fields.
Douglas Westwood: What Should We Expect in 2017?
Scanning the newspapers, social media and analyst coverage this year, there is consensus that a recovery in oil prices is coming, as a function of a reduction in over-supply, and that we should expect upward movement in prices later this year. The extent to which this view is built upon analysis of data or gut feel is unknown (and…
