IEA cuts oil demand outlook; Ineos enters North Sea; Firms miss supply chain gains
Upstream oil and gas news you need to know.
IEA cuts 2016 oil demand forecast
Global oil demand growth will fall from 1.8 million barrels per day in 2015 to 1.2 mb/d in 2016, a larger drop than previously thought, the International Energy Agency (IEA) said in its monthly oil market report.
A month ago, IEA predicted demand growth in 2016 at 1.4 mb/d.
Demand growth is at a five-year high this year and next year it will move closer towards its long-term trend as "previous price support is likely to wane" and recent downgrades to the macro-economic outlook filter through, the IEA said October 13.
On the supply side, OPEC crude supply rose by 90 000 barrels per day (90 kb/d) in September to 31.72 mb/d as record Iraqi output more than offset a dip in Saudi supply.
"A slowdown in forecast demand growth and slightly higher non-OPEC supply lowers the 2016 “call” on OPEC by 0.2 mb/d from last month’s Oil Market Report to 31.1 mb/d," IEA said.
In the same report a month ago, the agency said the recent' oil price slump had prompted IEA to cut forecasts for non-OPEC supply in 2016 by nearly 0.5 million barrels per day, most of which will be felt in US.
"US light tight oil, the driver of US growth, is forecast to shrink by 0.4 mb/d next year," IEA said in its monthly report September 11.
OPEC Crude Oil Supply
Ineos enters North Sea upstream market
Swiss-based chemicals group Ineos has agreed to buy a portfolio of North Sea gas assets from Germany-based DEA Group, marking Ineos' entrance into the North Sea exploration and production market.
The fields, the largest of which are Breagh and Clipper South in the Southern North Sea, provide up to 8% of the UK’s gas.
"Once the deal closes, the platforms, infrastructure and the highly skilled team that runs them will form part of the new Ineos Upstream business division based in London," Ineos said in a statement October 11.
Ineos operates the Grangemouth refinery and petrochemical complex, the largest manufacturing complex in Scotland and the UK's only refining and petrochemicals complex directly connected to North Sea assets.
Ineos has been a leading proponent of UK onshore shale gas development in UK and is now evaluating additional opportunities offshore.
Statoil starts world's first wet gas compression
Statoil and its partners on the Norwegian Gullfaks field have started the world's first wet gas compression.
The unique technology will increase recovery by 22 million barrels of oil equivalent (oe) and extend plateau production by around two years from the Gullfaks South Brent reservoir, Statoil said in a statement October 12.
“This is one of several important projects on Gullfaks for improved recovery and field life extension. The recovery rate from the Gullfaks South Brent reservoir may be increased from 62% to 74% by applying this solution in combination with other measures,” said Kjetil Hove, Statoil senior vice president for the operations west cluster.
The wet gas compressor does not require gas and liquid separation before compression, requiring smaller modules and a simpler structure on the seabed.
The Gullfaks licence is 51% held by operator Statoil, while Petoro and OMV hold shares of 30% and 19%, respectively.
The owners have prepared to tie in other subsea wells to the wet gas compressor via existing pipelines. The firms are currently looking for potential tie-in candidates, Statoil said.
In mid-September Statoil also became the first company to start subsea gas compression, on the Asgard field in the Norwegian North Sea.
Firms are missing gains from UKCS collaboration
Companies are missing out on value gains on the UK continental shelf due to a lack of effective supply chain collaboration, according to a survey conducted by the Deloitte consultancy.
"74% of respondents said collaboration was an integral part of their day-to-day business but only 27% reported that the majority of their efforts resulted in a successful outcome," Deloitte said in a statement October 2.
Cost reduction was found to be the main driver for collaboration, with nearly a third (31%) of company respondents in agreement.
90% said that supply chain collaboration would also play a greater role in their company’s success.
The oil and gas industry needs to address a number of practical issues, such as a lack of effective financial incentives, a lack of clear communication and misalignment of expectations between operators and service companies in execution, Nick Clark, a director in Deloitte’s consulting team and contributor to the research, said.
Less than 10% of respondents said that leadership regularly emphasised the importance of successful collaboration, or included it in their business strategy.
Baker Hughes launches production-boosting fracture service
Baker Hughes launched September 30 its Ascent high-side fracturing service which increases the conductive fracture area to improve non-conventional recovery.
The Ascent fracturing service keeps the proppant in place above the lateral wellbore even after pumping has concluded and the formation begins to close, propping open those hydrocarbon pathways and ensuring access to more potential production.
In a 19-well production study, the Ascent high-side fracturing service helped operators in a Texas shale play more than double hydrocarbon recovery—by an average of 117%—compared to other, conventionally stimulated wells of a similar depth and length located within a two-mile radius, the company said in a statement.
Specialised pumping techniques also reduce water usage and proppant volumes, lowering associated costs, it said.
The Ascent-serviced wells lowered the operators’ water usage 20%, from an average of 1,543 gallons per foot in the offsets to 1,223 gal/ft in the wells using the Ascent service, according to the production study.