Home' Trinidad and Tobago Guardian : January 12th 2017 Contents BG8 | ENERGY
BUSINESS GUARDIAN guardian.co.tt JANUARY 12 • 2017
EIA: US production
growth among risks
Offshore Gulf of Mexico production largely drives
US crude oil production growth in 2017 and 2018,
according to US Energy Information Administration's
US crude oil production will grow modestly this
year and in 2018, keeping prices for the commodity
in the low US$50s per barrel, according to research
from the US Energy Information Administration.
The agency released its first Short-Term Energy
Outlook for the year on Tuesday and highlighted that
Brent pricing would average US$1 per barrel more than
West Texas Intermediate (WTI) prices for both 2017
and 2018. That renders the WTI average at US$52 per
barrel in 2017, followed by US$55 per barrel in 2018.
OPEC production cuts announced in November
kept December oil prices above US$50 per barrel for
the first time since mid-2015, and confidence in the
compliance with those cuts will likely support the
higher prices, EIA said.
However, countries not subject to the terms---such
as the United States---may increase production, which
could delay consistent global inventory withdrawals
until the second half of 2018.
"Uncertainty in the production response from
Libya, Nigeria, and the United States in the coming
months presents some of the largest risks to the time-
line of oil market rebalancing," EIA said in the report.
"The experience of 2016 has shown us that the
importance of cooperation and dialogue between
all oil industry stakeholders has never been greater.
We believe that our future will increasingly be one
of energy interdependence." Rigzone
Companies may boost E&P after
two years of declines---Barclays
Global oil and gas companies are expected to raise
exploration and production (E&P) spending in 2017 by
7 per cent, marking the first increase in three years,
Barclays said on Monday.
Oil prices have recovered after a more than two-year
slump caused by a glut due to US shale oil flooding the
market. Prices have risen about 21 per cent since the
OPEC, which accounts for a third of global oil output,
signed an agreement in November to curb supply.
"With OPEC putting a floor on oil prices, opera-
tors have greater confidence to drill and complete,
although the early stages of the recovery will be un-
even," Barclays analysts wrote in a report.
Barclays also said it expects North American oil
companies to lead the spending growth with a 27 per
cent jump. Production, however, is expected to fall
as higher service costs are likely to dilute the effect
of a larger budget, the brokerage said.
International spending is expected to increase 2
per cent, according to Barclays' survey of 215 global
oil and gas companies. Spending on offshore projects
is expected to fall 20-25 per cent in 2017, compared
with estimates of a 34 per cent fall in 2016.
Iraq cuts output by 160,000 bpd
Iraq has cut oil production by 160,000 bar-
rels per day (bpd) since the beginning of Jan-
uary in line with an OPEC decision to lower
output, the oil ministry said in a statement
Oil Minister Jabar Ali al-Luaibi said he hoped
that by the end of the month production would
be cut by 210,000 bpd, in line with the OPEC-
agreed cap for Iraq, according to the statement.
Iraq, the second-largest producer in the Or-
ganisation of the Petroleum Exporting Coun-
tries (OPEC), said on Monday exports from its
southern oil ports had reached a record 3.51
million bpd, but it was nonetheless lowering
OPEC agreed in November to cut output
by 1.2 million bpd from January 2017 to sup-
port prices. A separate ministry statement on
Tuesday said Luaibi had invited Angolan oil
company Sonangol to begin working at the
Qayyara and Najma oil fields in northern Iraq
by the end of February.
The ministry was "working to enable oil
companies in Iraq to operate by removing ob-
stacles" in areas recaptured in recent months
Sonangol had pulled out of an agreement
to increase output at the Qayyara fields in
2014, citing the mounting security risk. Iraqi
oil workers have capped a number of burning
wells set alight by Islamic State militants as
they retreated from Qayyara towards Mosul,
where US-backed Iraqi forces are pressing an
offensive against the group.
Qayyara and Najma used to produce up to
30,000 bpd of heavy crude before they fell
under control of the ultra-hardline jihadists.
Reliant on oil sales for most of its income,
Iraq had resisted production cuts, saying it
needed revenue to fund a war against Islamic
State militants who seized a third of the coun-
try's territory in 2014.
But it has accepted a lower production ref-
erence level as part of the OPEC deal that esti-
mated its output at 4.561 million bpd. Reuters
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