31 May 2015
Integrated Oil
US Integrated Oils
Setting the stage for the next oil price spike?
While current reductions to budgets may have limited impact to near-term
production across much of the sector, it will certainly have a dramatic impact
on long-term crude supply, with a crunch likely later this decade (2018-2020)
as the impact of project deferrals takes a bite out of incremental crude supply.
A quick look at global project FIDs helps put the matter into perspective.
Between 2002 and 2013, the industry averaged 21 oil-targeted project
sanctions a year (>5 mbpd of peak production). However, this fell to only 6
such projects sanctioned in 2014, with 2015 likely to remain in single digits. In
terms of productive capacity, each year of "lost" FIDs represents an average
830Mb/d of new, annual productive capacity.
IFigure 30: Global project FIDs by year Figure 31: Total "peak" production of FIDs by year
(Mb/d)
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