by Thom Payne, Head of Offshore, Rigs & Wells, Westwood Global Energy Group
For the oil markets, the first half of the year saw extraordinary swings in supply and demand, culminating in what is now thought to have been a staggering 22mbbpd of oversupply in April as OECD economies headed into lockdown and OPEC+ cuts dissolved. Demand fell to 78mmbpd and Saudi Arabia pumped an additional 1.6mmbpd, driving Brent down to under $10/bbl on April 21st and briefly pushing the WTI futures contract into negative territory.
The floating production systems (FPS) market will rebound to $13 billion annually from 2021-24 with an average oil price of $60 per barrel, analysts have said.
BP’s announcement that it is going to write down the value of its exploration assets by $8-10 billion (56-70%) shows the accounting impact of its energy transition strategy.
Confidence had returned to global exploration with improved performance and the emergence of several new multi-billion barrel plays. The confidence carried over into 2020 but has evaporated in the face of the Covid-19 crisis and the collapse in oil prices. Short term plans are in a state of flux and exploration strategy is being reset again.
The world has been transformed in the past month since the COVID-19 pandemic took hold. The dramatic impact of COVID-19 on global oil demand and has been compounded by Saudi Arabia and Russia failing to agree production cuts to stabilise oil prices. With Brent trading well below US$30/bbl the resilience of the sector is once again being pushed to its limit. What does this mean for the UK and Norway upstream sectors?
A price war between two of the world’s biggest oil producers has sparked one of the worst crude routs in decades, putting companies under “huge pressure” and threatening “brutal” cost cuts.
Exploration activity in the UK North Sea has picked up substantially since last year, but the success rate has “fallen off a cliff”, an analyst has said.
Drilling activity increased substancially for the first period of 2019 thanks to a resurgence in the gas market, according to energy research firm Westwood.
Energy industry analyst Andrew Reid said he was leaving consultancy Westwood Global Energy Group (WGEG) in “exceptionally good shape” after confirming his time as chief executive had ended.
by Dave Moseley, senior technical analyst, Westwood Global Energy
Westwood Global Energy reports that there were five active exploration wells and two active appraisal wells as of June 25. Since the last report, six wells have spudded and four have completed.
Troubled manufacturing firm Burntisland Fabrication (BiFab) needs to "actively look to attract" oil and gas decommissioning work after losing out on another multi-million wind farm contract, a leading energy analyst has said.
by Alyson Harding, Technical Manager for North West Europe E&P at Westwood Global Energy Group
Alyson Harding, Technical Manager for North West Europe E&P at Westwood Global Energy Group, responds to Oil and Gas UK's Business Outlook Report published this week.
