Offshore staff

LONDON – Westwood’s latest World Drilling and Production Market Forecast anticipates an increase of 1.8 MMb/d in liquids production globally next year to 93.3 MMb/d, due to ramp-up efforts by various Middle Eastern producers, including Saudi Arabia; further output rises in the US; and contributions from deepwater projects.

Thereafter, production will continue to climb although less quickly, the consultant claims, peaking at 96.8 MMb/d in 2023 before dipping slightly to 96.6 MMb/d, based on current project plans and reserves.

Previously Westwood had forecast a sharp return to the previous oversupply situation. However, political and economic developments have led it to downgrade its production outlooks for several producers, notably Venezuela, where output fell to 1.2 MMb/d in September.

Iran’s production has fallen by 0.3 MMb/d in two months and will likely decline further following the full imposition of US sanctions.

In Nigeria major deepwater projects continue to be pushed back due to political and budgetary concerns, with final investment decisions unlikely to go forward until the government has reached agreement on its long-discussed legislative framework.

Elsewhere, output has fallen in Angola and Mexico, with little signs of an uptick over the forecast period.

With Mexico’s new president promising to focus more attention on Pemex, an election next year in Nigeria and uncertainty over the duration of Iranian sanctions will last, the potential for large increases in production to fill the emerging global shortfalls remains strong, particularly further into the 2020s, Westwood believes.

11/07/2018