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Tag: IEA

  • IEA welcomes return of oil surplus after OPEC output surge

    The International Energy Agency welcomed the oil market’s return to surplus as OPEC’s production surge swells global stockpiles and drives prices into a bear market.

    Inventories in industrialized nations have increased for four straight months and are set to jump by 2 million barrels a day next half if current output is maintained, the IEA said in its monthly report. The supply boom has seen prices tumble from a four-year high, offering respite to consumers in emerging markets worst affected by crude’s rally.

    “Rising stocks should be welcomed as a form of insurance, rather than a threat,” the agency said Wednesday. “The response to the call by the IEA and others to increase production is a reminder that the oil industry works best when it works together.”

    The IEA warned last month that high energy prices could present a risk to global economic growth. Benchmark crude futures soared in early October on fears that American sanctions against Iran would crimp supply. Yet a production push in Saudi Arabia, Russia and the U.S., as well as unexpected U.S. waivers for some buyers of Iranian crude, have provided the market with a buffer to potential supply shocks.

    “Global oil supplies are growing rapidly, as record output from Saudi Arabia, Russia and the U.S. more than offsets declines from Iran and Venezuela,” the IEA said. The report comes a day after the agency’s director, Fatih Birol, said key producers have behaved responsibly in boosting production, and that trying to raise prices now would be “not the right thing to do.”

    Stockpiles are now increasing against the seasonal norm, and are likely to exceed the five-year average for the first time since March once October’s figures are finalized, according to the report. The gain in inventories — seen at 700,000 barrels a day in the fourth quarter — provides a cushion of supply amid persistent volatility as output in Libya, Nigeria and Venezuela remains prone to instability, the IEA said.

    OPEC’s secretary-general, Mohammad Barkindo, doesn’t share the view that the renewed surplus isn’t a threat. Speaking in Abu Dhabi this week, he said the resurgence of non-OPEC output was beginning to look “alarming.” He also insisted that OPEC was committed to sustaining “this balance that we fought very hard in the last two years to restore.”

    The IEA reduced its forecast for growth in emerging-market demand next year — down 165,000 barrels a day from the previous month’s report — but said it will still increase by 1.1 million barrels a day. It kept its projection for global demand growth largely unchanged at 1.4 million barrels a day as a deteriorating economic outlook is offset by the decline in crude prices.

  • Nigeria, others to face long-term budgetary problems, says EIA

    The possibility of Nigeria, Algeria, Libya, Angola, and other oil producing nations facing budgetary hiccups is high, following the persistent fall in the international prices of crude oil, the International Energy Agency (IEA) has said.

    The United States -based energy watchdog, in its October report, said it was unlikely that prices of crude oil would rebound soon implying that Nigeria, which depends largely on oil revenues to service 85 per cent of its budget, has to contend with budgetary problems for some time.

    The agency, which typically refrains from predicting oil prices, said that prices could fall further in 2015, after declining to their lowest levels since 2010. “While there has been some speculations that the high cost of unconventional oil production might set a new equilibrium for Brent prices in the $80 to $90 range, supply/ demand  balances suggest that the price rout has yet to run its course,’’ the IEA said.

    The body said barring any new supply disruptions, downward price pressures could build further in the first half of 2015. “Oil prices have fallen 30 per cent since peaking in June, pressured by a strong US dollar and rising US light oil output while largely ignoring the impact of Libyan supply disruptions,” it added.

    According to the agency, its forecast of global oil demand growth remains unchanged at 1.13million from a five year annual low of 680,000 barrels per day (bpd) in the year in view of the happenings in the global oil market.

    Price of crude oil has fallen from $115 per barrel to below $80 per barrel in the past three months on account of crisis in the Middle East, surge in the production of U.S shale oil among other issues. The development made the Federal Government to try and introduce austerity measures to cushion the effect of the falling oil price on the economy.

    Also, the government is planning to withdraw $2 billion from excess crude account (ECA) for financing of capital projects and also benchmarked oil price at $73 per barrel in its 2015 budget.

  • Shell’s global deepwater holds 675b bbls recoverable oil, says IEA

    Shell’s global deepwater holds 675b bbls recoverable oil, says IEA

    The Royal Dutch Shell’s global deepwater assets have been said to contain an estimated 675 billion barrels of recoverable oil.

    In its latest monthly publication, Shell World, published by Shell companies in Nigeria, the company quoted the International Energy Agency (IEA) as putting Shell’s global deepwater proven reserves at about 675 billion barrels. In the publication, Shell confirmed that it has enjoyed decades of successful projects and some landmark moments in 2014 in global deepwater.

    It stated that its Nigerian Bonga North West (BNW) Field, which achieved first oil in August, is part of Shell’s long-standing commitment to developing deepwater engineering skills in Nigeria, adding that the investments made by Shell Nigeria Exploration and Production Company (SNEPCo) and its other project partners in the Bonga North West project include upgrades of local contractors’ facilities and providing specialised training for Nigerians to work in the energy industry.

    Oil from the Bonga North West field, according to Shell, is transported by a new subsea flowline to the existing Bonga subsea infrastructure while additional equipment and control systems were installed and integrated with Bonga Main topsides.

    The publication noted that a significant part of the project was carried out by Nigerian companies including an indigenous contractor that fabricated and installed the BNW topsides equipment.

    Commenting on the BNW achievement, Shell’s Vice President Nigeria & Gabon, Markus Droll, said: “It is significant to note that the project leadership and majority of staff working on the BNW project are Nigerians – testament to the growth of deepwater engineering experience in SNEPCo. Above all, we are pleased that the project has so far been delivered without lost time injury (LTI) with SNEPCo and contractor staff working safely on various aspects of the project in about 10 different locations in the United States, Europe and Nigeria.

    “This programme – on top of the ongoing Phase 2 drilling and after the start-up of Bonga North-West barely two months ago – further underlines our commitment to Nigeria and leadership in deepwater production.”

    The Corporate Media Relations Manager, Precious Okolobo, also said that SNEPCo has announced plans to drill eight more wells in the Bonga field to help maximise deepwater production in Nigeria. This third phase of the Bonga Main development is expected to add about 40,000 barrels of oil equivalent per day through the existing Bonga floating production, storage and offloading (FPSO) facility.

    Okolobo stated that Phase 3 is an expansion of the existing Bonga Main development and will involve drilling four oil producing and four water injection wells. Drilling is expected to start in 2015. Output from the new wells will be transported through existing pipelines to the FPSO facility. The facility has the capacity to produce more than 200,000 barrels of oil and 150 million standard cubic feet of gas a day.

    The Phase 3 work will be executed by several contractors including Nigerian companies that have developed deepwater expertise through the provision of similar services for SNEPCo. The Bonga field, which began producing oil and gas in 2005, was Nigeria’s first deep-water development in depths of more than 1,000 metres. Bonga has produced over 500 million barrels of oil to date.

    The Bonga project is operated by SNEPCo as contractor under a production sharing contract with the Nigerian National Petroleum Company, which holds the lease for OML 118, in which the Bonga field is located. SNEPCo holds a 55 per cent, Esso Exploration & Production Nigeria Limited 20 per cent, Total E&P Nigeria Limited 12.5 per cent and Nigerian Agip Exploration Limited 2.5 per cent.

  • Global demand growth for fuel weakens, says IEA

    Global demand growth for fuel weakens, says IEA

    GLobal demand growth for fuel has weakened, the International Energy Agency (IEA) has  said.

    The agency warned that the rise in Middle East refining capacity would create huge glut of automotive gas oil or diesel.

    According to the global energy watch dog’s monthly report, IEA forecast that the Middle East’s net oil product exports will reach nearly one million barrels per day (bpd) next year from an average of less than 400,000 bpd last year.

    Newly built mega refineries are coming into production just as demand growth for their core product – diesel – is beginning to fade, which could leave them searching for outlets, the IEA said.

    “The configuration of the plants, designed to maximise diesel production, seems somewhat at odds with market trends that in recent months have shown stronger demand growth for gasoline and jet fuel than for middle distillates,” the agency said in its Oil Market Report.

    The IEA expects ultra low-sulphur diesel and jet fuel production from two newly built Saudi refineries and one in the UAE alone to reach 800,000 bpd, against regional distillate demand growth of less than 100,000 bpd per year in 2014 and 2015.

    “The current economic and oil demand picture is quite different from what was envisaged at the time when they got underway in the mid-2000s,” the report said.

    “Since the financial crisis of 2008 and 2009, the economic slowdown has had a more marked impact on distillate demand than on that for other products, such as gasoline.”

    The 400,000 bpd Jubail  refinery, a  joint venture between Saudi Aramco and France’s Total, reached full production in August and the 400,000 bpd Yanbu refinery, run with China’s Sinopec, is set to start in early 2015. The 420,000 bpd Ruwais refinery in the UAE is targeting an end-of-year startnup.

    But sputtering growth in key growing markets, such as India, Brazil and other Latin American countries, is limiting outlets for diesel, while subsidy cuts in those countries also threatens consumption.

    After India phased in gradual subsidy cuts, demand reversed annual growth that had characterized its distillates markets from the 1970s, and demand shrank from June last year until April this year.

    Even Europe, which is net short of ultra low-sulphur diesel now, and set to become more reliant on imports as regional refineries shut down and cut production, is not the boom market that the refineries hoped for when they were commissioned.

  • IEA, IEF, OPEC hold talks on energy markets

    The International Energy Agency (IEA), International Energy Forum (IEF) and the Organisation of the Petroleum Exporting Countries (OPEC) held the third joint workshop on “Interactions between physical and financial energy markets” in Vienna, Austria.

    The high-level technical event, according to a statement by OPEC, brought together variuous experts from industry, governments, and the financial and regulatory sectors of the developed and emerging economies to discuss the interactions between physical and financial energy markets.

    The statement noted that the workshop built on insights gained from the previous two meetings held in London in 2010 and Vienna the following year, and discussions were held under the Chatham House Rule.

    The workshop is part of a wider joint programme of work agreed by the three organisations and endorsed by Energy Ministers at the 12th International Energy Forum (Cancun, Mexico, March 2010) as part of the Cancun Declaration.

    The discussions considered the following issues: the evolving interactions between energy derivatives and the broader financial markets over the last 10 years; an update on the implementation of regulation in the energy derivatives markets; expected future developments in energy derivatives trading; and a focus on Asia.

    The IEA, IEF and OPEC will produce a summary report of the workshop for their member countries, which will also be made available on their respective websites, the statement added.

  • US to overtake Saudi as top oil producer, says IEA

    The United States will overtake Saudi Arabia and Russia as the world’s top oil producer by 2017, the West’s energy agency said yesterday, predicting Washington will come very close to achieving a previously unthinkable energy self-sufficiency.

    The International Energy Agency (IEA), according to Reuters, said it saw a continued fall in US oil imports with North America becoming a net oil exporter by around 2030, and the United States becoming almost self-sufficient in energy by 2035.

    “US, which currently imports around 20 percent of its total energy needs, becomes all but self-sufficient in net terms – a dramatic reversal of the trend seen in most other energy importing countries,” it said.

    The forecasts by the IEA, which advises large industrialized nations on energy policy, were in sharp contrast to its previous reports, which saw Saudi Arabia remaining the top producer until 2035.

    “Energy developments in the United States are profound and their effect will be felt well beyond North America – and the energy sector,” the IEA said in the annual long-term report, giving one of the most optimistic forecasts for U.S. energy production growth to date.

    “The recent rebound in U.S. oil and gas production, driven by upstream technologies that are unlocking light tight oil and shale gas resources, is spurring economic activity – with less expensive gas and electricity prices giving industry a competitive edge,” it added.

    IEA Chief Economist Fatih Birol told a news conference in London he believed the United States would overtake Russia as the biggest gas producer by a significant margin by 2015. By 2017, it would become the world’s largest oil producer, he said.