Oil Supply from Independent Producers Rose in 2009.
Non-OPEC supply in 2009 is estimated to have averaged 50.96 mb/d, representing growth of 0.51 mb/d over the previous year. The current figure is broadly unchanged from the previous assessment, despite a number of adjustments which offset one another as well as minor historical revisions to 2008 figures. The revisions affected all quarters with downward adjustments introduced to the first three quarters, while the fourth quarter experienced an upward revision. On a country basis, supply estimates for the US, UK, Australia, Colombia, Chad and Azerbaijan were revised up, while estimates for Canada and Brazil were revised down. In terms of volume, the revision in the fourth quarter was the largest. On a quarterly basis, non-OPEC supply is estimated at 50.92 mb/d, 50.60 mb/d, 50.81 mb/d and 51.49 mb/d respectively.
The 2009 non-OPEC supply forecast has experienced numerous revisions since the initial projection in 2008. Market conditions were the main driver behind these adjustments due to factors such as the impact of the economical turmoil and the decline in oil prices among others. Forecasts have had to respond to a mix of general and specific issues to determine the extent to which these have impinged on actual conditions on the ground. Then again, the vast number of dynamic variables associated with production operations, as well as political, geological and economical distinctiveness of not only each country but the regions within the individual countries creates enormous challenges to which forecasters have to respond. The success of these efforts will only be known as actual data becomes available.
In 2009, the FSU contributed the most to supply growth based on the current estimate of 0.37 mb/d, while Developing Countries supply showed a healthy increase of 0.13 mb/d. In contrast, OECD supply indicated a minor decline of 40 tb/d, despite including the US oil supply which experienced the highest growth among all non-OPEC countries. On a regional basis, after the FSU, North- and Latin America regions experienced the highest growth of 0.22 mb/d each. In terms of decline, OECD Western Europe experienced the biggest decline, followed by Other Asia and Africa.
Forecast for 2010
Non-OPEC supply expected to grow by 0.35 mb/d in 2010
Non-OPEC supply in 2010 is forecast to grow by 0.35 mb/d over the previous year to average 51.31 mb/d, displaying an upward revision of 42 tb/d from a month earlier. The upward revision was due to various updates to countries" supply profiles in addition to carrying over some of the revisions introduced to 2009 supply estimates. On a quarterly basis, non-OPEC supply is expected to average 51.42 mb/d, 51.19 mb/d, 51.03 mb/d and 51.61 respectively.
US oil supply expected to average 8.16 mb/d in 2010 for growth of 0.15 mb/d
Total US oil supply is expected to increase by 0.15 mb/d over the previous year to average 8.16 mb/d in 2010, an upward revision of 0.10 mb/d from the previous month. The healthy level of production in the fourth quarter of 2009 supported the upward revision. Additionally, adjustments to various project startups and ramp-ups further supported the revision. US oil supply is anticipated to continue building up during 2010, after a strong level of growth in 2009. Among the projects supporting growth in the Gulf of Mexico is the Droshky field, which is expected to peak at 45 tb/d. Similarly, the Perdido Hub is seen to further support the forecast with a capacity of 100 tb/d as well as the Cascade-Chinook project with a capacity of 80 tb/d. Furthermore, biofuels are expected to enhance US supply coupled with expected improvements in NGL production on the back of the startup of various gas projects. US oil production stood at 8.09 mb/d in December, according to preliminary data ? lower than in the previous month.
Russia oil supply expected to grow by 50 tb/d in 2010
Russia oil supply is expected to increase by 50 tb/d in 2010 to average 9.98 mb/d, representing an upward revision of 34 tb/d from last month. The revision was experienced due to the continuing strong production figures in 4Q09. Additionally, the continuing ramp-up of the Vankor oil project is seen to offset the decline in mature producing areas. Furthermore, the startup of new projects will further support Russian output this year. A blend of factors such as the improvement in oil prices as well as the devaluation of the Russian rouble and decline of operational costs coupled with the proactive government policy regarding taxation and export duties are expected to set the stage for a stabilization in Russia oil supply in 2010. However, risks remain, especially during the second half of 2010 as the performance of mature areas is likely to determine the shape of the Russian oil supply in 2010. On a quarterly basis, Russian oil supply is foreseen to average 10.04 mb/d, 10.00 mb/d, 9.95 mb/d and 9.91 mb/d respectively. Preliminary figures indicate that Russia oil production stood at 10.06 mb/d in December, slightly lower than in the previous month.
Oil supply from Kazakhstan is forecast to increase by 90 tb/d over the previous year to average 1.63 mb/d in 2010, unchanged from the previous month. The healthy level ofproduction in 4Q09 in addition to indications from the steady export programme from various ports indicates that the expected increase in 2010 is on track. The growth in Kazakh"s supply is supported by continuing developments at the Tengiz field, with the completion of the sour gas project that will help maintain supply above 0.50 mb/d over the short term.
Azeri supply to grow by 0.12 mb/d in 2010
Azerbaijan oil production is estimated to increase by 0.12 mb/d over the previous year to average 1.16 mb/d in 2010, unchanged from previous month. Anticipated growth is supported by the development at the ACG field, such as the water injection project at the Guneshli field. Quarterly supply is seen to stand at 1.09 mb/d, 1.13 mb/d, 1.17 mb/d and 1.23 mb/d respectively.
Bohai Bay startup supports China oil supply in 2010
China oil supply is believed to increase by 50 tb/d over the previous year to average 3.91 mb/d in 2010, indicating an upward revision of around 10 tb/d from the previous month. The startup of four fields in the Bohai Bay area, some ahead of schedule, supported the annual forecast. On a quarterly basis, China oil supply is seen to average 3.91 mb/d, 3.888 mb/d, 3.94 mb/d and 3.93 mb/d respectively.