Net Oil Exports - October Update

FSU Exports July (September IEA report)

Former Soviet Union (FSU)

Russia – July actual, August provisional: Russian projections are also held steady, with total oil production in 2007 of 9.92 mb/d and 10.10 mb/d in 2008 representing growth of 2.5% and 1.8% respectively. Growth this year has slowed from 1Q levels near 400 kb/d, although inflated early-2007 growth levels need to be seen in the context of weak 1Q06 production due to weather. That said, August growth stood at a more modest 125 kb/d year-on-year. Recent months have seen production drift lower from Lukoil, Gazpromneft (formerly Sibneft), TNK-BP and Gazprom, partly offset by Rosneft increases.

Yearly growth by Rosneft currently stands close to 600 kb/d, with total production of 2.2 mb/d representing a five-fold increase on 2004 levels. Some commentators have suggested that organic production growth has been sacrificed to a programme of acquisitions that has reportedly pushed Rosneft debt to around $30 billion. This is seen as potentially undermining Rosneft’s ability to finance future development at fields such as Vankor, Sakhalin and Verknechonskoye, which helped underpin MTOMR projections for Russian output reaching 10.6 mb/d by end-decade. A further twist in the tale emerged from press reports in August suggesting that the government is planning to establish a new state producer incorporating the oil assets of Rosneft, Gazprom and Surgutneftegaz. Surgutneftegaz’s inclusion may in part reflect its cash-rich status, which in turn might help alleviate Rosneft debts.




Azerbaijan – July actual: Azeri oil production remains on track for growth of around 200 kb/d both this year and next. Prevailing output of some 950 kb/d could dip to 650 kb/d in September owing to construction work on the Central Azeri platform, part of the 700 kb/d offshore ACG complex. Work should largely be completed by October however, based on higher expected shipments via the Baku- Tbilisi- Ceyhan (BTC) pipeline. Total Azerbaijan production attains 1.1 mb/d in the second half of 2008, with increased contributions from the Azeri field and from start-up at the deep Guneshli complex. Growth will be dependent however, on maintaining the integrity of the BTC pipeline, after a Kurdish rebel group said BTC would be attacked unless Turkey desists from attacks on Kurdish rebel forces.

According to preliminary data, FSU net oil exports totalled 8.89 mb/d in July, up 70 kb/d from June and 520 kb/d higher than July 2006. A 150 kb/d month-on-month increase in seaborne crude exports, including an extra 90 kb/d leaving Baltic ports, was tempered by another drop in Druzhba transits, this time by 50 kb/d (see Refining section, page 44). There are reports of Lukoil having curbed June-July deliveries to German refineries, in part due to pricing issues. However, latest information suggests reinstatedvolumes for September. Average monthly FSU product exports fell by 20 kb/d in July.




August loading schedules suggest that exports via Transneft may have been 100 kb/d below July volumes, coinciding with an increase in Russian export duties from 1 August. However, higher BTC flows may have restricted any drop in aggregate FSU supplies to around 50 kb/d. Further declines in FSU exports are anticipated later this year. The threat from late-August of a strike by Turkish ship pilots, if realised, may hinder traffic through the Turkish straits which could restrict trade flows from FSU ports in the Black Sea. Maintenance is due to reduce Caspian output by up to 300 kb/d in September, which should overshadow extra Russian barrels exported before the next rise in crude and product export duties, effective 1 October.


FSU Exports July (September IEA report)

Azerbaijan, crude oil, crude oil exports, FSU, Kazakhstan, net oil exports, net petroleum exports, oil, oil exports, Russia

Cantarell (in progress)

Cantarell Monthly Oil Production 2002-2007

Data from Pemex 2007 Statistical Yearbook covering through December 2006, page 18.
Monthly data from 2004-2007 derived from yearly data, monthly Pemex hydrocarbon spreadsheets, and periodic news reports.



[add yearly chart 1 - Cantarell]
[add yearly chart 2 - Mexico and Cantarell]
[add monthly chart with Mexico and Cantarell separated]
[add Pemex monthly with exports]
[add monthly exports vs. Cantarell]

[add table with yearly Cantarell and projected decline losses]

[discuss worst case scenario projections and production vs. reserve estimates]

Net Oil Exports - September Update

Norway's Oil Output Fell 7.3% in August

Norway's Oil Output Fell 7.3% in August From a Month Earlier
By Bunny Nooryani
Sept. 14 (Bloomberg)

Norway, the world's fifth-largest oil exporter, said crude production in August decreased 7.3 percent from a month earlier.

Output averaged 2.111 million barrels a day, compared with 2.277 million barrels a day in July, according to a statement posted today on the Web site of the Norwegian Petroleum Directorate, which oversees the nation's oil industry. The figures for August are preliminary.

Norway pumped about 319,000 barrels a day of condensate and natural-gas liquids in August, the directorate estimated. That compares with 329,000 barrels a day the month before.

FSU Exports June (August IEA report)

Former Soviet Union (FSU)

Russia – June actual, July provisional: Production data for June and July continued to show Russianoutput running around 2% ahead of 2006, averaging 9.9 mb/d. For July, Rosneft production, and thatfrom the seasonal Sakhalin 2 project, came in ahead of this report’s earlier expectations. However, thiswas offset by weaker than anticipated output from Lukoil, TNK-BP and Tatneft, leading to a 20 kb/ddownward reduction in the Russian production forecast for 3Q07 onwards. Moreover, stronger Rosneftperformance results in part from its now almost-complete takeover of former Yukos production assets.Either Rosneft or Gazprom are seen by most commentators as eventual owners of producer Russneft’sassets (300 kb/d) after owner Mikhail Gutseriyev’s end-July decision to sell up.

Russian growth in 2007 now comes in at 2.3% (+225 kb/d), followed by 1.8% (+175 kb/d) in 2008. Recentreports suggest that year-round Sakhalin 2 crude production could be attained earlier than this report’sassumption of end-2008. Also, Gazpromneft (formerly Sibneft) announced it will boost spending by 66%in 2007 in order to raise output. In both instances, this report retains a more cautious outlook until signsemerge that the higher targets are close to being reached. The economy ministry’s latest long-termproduction forecast sees output stable at 10.6 mb/d in 2015-2020. Our own MTOMR last month projected Russian output of 10.6 mb/d for 2010/2011 and 10.5 mb/d in 2012, potentially rising further by mid-decade.

Kazakhstan – June actual: June production (crude and condensate) came in 110 kb/d below earlier estimates, largely due to maintenance at the Tengiz field. This report had earlier assumed 3Q maintenance, so a 30 kb/d downward revision for 2Q07 is offset by a similar upward revision for 3Q, leaving the 2007 forecast largely unchanged at 1.36 mb/d. Production rises further in 2008 to 1.45 mb/d.

Further gains from Kazakhstan longer-term centre on the triumvirate of fields consisting of the existing Tengiz and Karachaganak and the currently underdevelopment Kashagan. Early August is due to see the government opening talks with Kashagan partners to renegotiate the field’s production sharing agreement, after delays have successively pushed back start-up from an original 2005 to a latest estimate of late 2010 (see MTOMR, July 2007, p38). Meanwhile, in early July, Karachaganak Petroleum Operating (KPO) BV awarded a front-end engineering and design (FEED) contract for phase three of the Karachaganak processing complex. This will substantially add to liquids production of 290 kb/d by 2012.

FSU net oil exports in June averaged 8.8 mb/d, some 270 kb/d lower than May levels. Crude exports fell by 450 kb/d following a 28% increase in Russian crude export duties, from 1 June, to $200/tonne. This was partially offset by a 190 kb/d increase in product exports, including an extra 160 kb/d of gasoil.

June crude exports of 5.98 mb/d were at a six-month low. On top of higher Russian export duties, maintenance at Novorossiysk contributed to a 220 kb/d drop in Black Sea volumes. Moreover, 110 kb/d less crude was exported via the Baltic in June. A 100 kb/d month-on-month decrease in Druzhba volumes, and lower CPC transits after Tengiz field maintenance, saw total crude volumes via the Transneft pipeline system falling by 350 kb/d. BTC pipeline exports from Azerbaijan in June were unchanged from May.

FSU exports in July could be up to 100 kb/d higher than in June, with loading schedules showing 50 kb/d more oil coming through the Transneft system and an extra 20 kb/d via BTC. However, a further hike of 12% in Russian export duties was due on 1 August. While this is set to reduce volumes exported through Transneft by up to 100 kb/d, a partial offset will come from higher Caspian volumes via BTC.

Pemex Expects Chicontepec Output of 470,000 bpd

Pemex Expects Peak Chicontepec Output of 470,000 bpd
BNamericas 8/22/2007
URL: http://www.rigzone.com/news/article.asp?a_id=49291

Mexican state oil company Pemex expects its Chicontepec oilfield in Veracruz and Puebla states to reach peak production of 470,000 bpd in 2014, newspaper El Norte reported, citing Pemex sources.

The field produced 23,000 bpd in the first six months of 2007, but Pemex is hoping the field will ultimately help offset the natural decline of the Cantarell field, which produces roughly half Pemex's crude output.

With this goal in mind, Pemex aims to invest 164bn pesos (US$14.7bn) in Chicontepec in 2008-17, with annual investment hitting a peak of 26.2bn pesos in 2011.

The first five years of investment are expected to total 114bn pesos, with the second five years reaching 48.8bn pesos.

A consortium led by US oilfield services company Schlumberger (NYSE: SLB) won the first Chicontepec service contract in 2003, which initially featured a 200-well drilling program. Schlumberger recently signed a US$1.4bn contract for the drilling of 500 wells on the field.

Pemex estimates Chicontepec has probable reserves of 8.70 Bboe, the paper reported.

Method - Draft

What I term Net Exports is as follows. Production minus domestic consumption. So I will tackle each in turn after a brief summary of both together. I’m using somewhat of a hybrid of what is considered “all liquids.”

I use “all liquids” because it is what I consider the better “consumption” data-set, which is BP’s. So to keep things as uniform as possible, I need an all-liquids production data-set. Unfortunately one does not exist that provides monthly numbers for the relevant countries. The IEA would be my choice, except that they break out straight crude for the OPEC countries and only provide a “total” other-liquids figure for each month. I decided to use the EIA’s monthly numbers for production and to construct my own all-liquids hybrid from the available data.

This is a monthly “attempt” – so I have to make do with the fact that all consumption numbers are yearly. I will describe that process specifically when I start to talk about how I got my monthly consumption numbers.

Let’s start with production. The EIA publishes its numbers usually in the first week of every month. They cover everything up to and including the month three months previous. This first attempt at a timely report uses the EIA’s t11 series Crude+Condensate numbers as well as the EIA’s STEO(Short Term Energy Outlook). Both were released on August 10th. The t11 series covers through May. The STEO covers June and July, but only for OPEC and only for OPEC straight crude(excluding lease condensate).

The categories. Total oil supply and hence what is consumed (implied demand or “product supplied”) is wrapped into the category “all-liquids.”

All-liquids consists of four categories, one of which is divided into two sub-categories. First, there are C+C(Crude and Condensate), NGLs (or NGPLs), “Other Liquids,” and Refinery Processing Gains(RPG).

“Other liquids” include mainly ethanol. RPG typically occurs in highly technology advanced countries, where the refineries are actually able to generate carbon-based liquids is such large volume from the process of refining that they can be fed back into the system as if they were fresh barrels of something or other. See book: “Oil on the Brain.”

The main category is of course what is considered straight crude oil. This is C+C(crude plus condensate). domestic consumption is measured in all-liquids, however.

There is another issue. Condensate while tracked together with crude for the EIA does not count for OPEC quotas. Both the EIA and IEA break it apart from the OPEC crude numbers. The best way to look at this specifically is in the case of Algeria. Outside of OPEC the reporting agencies don’t split condensate from crude.

Production – The Sixteen Countries

On the production side, the OPEC countries are by far the easiest to deal with. Of the twelve countries, all except Indonesia are represented here. Indonesia is not a net exporter, and is in decline. Whether this is geologic or due to above-ground “investment” factors is a subject for another day.

The individual production of the OPEC countries is given in the EIA STEO for June and July. Using previous months’ data from the t11 series and table12(excluding condensate) we can figure what is probable for the monthly condensate production(I calculate this separately from my spreadsheet). Adding this to the STEO figures I get C+C production for these 11 OPEC countries through July. These figures will of course be revised next month when revisions are made to the underlying data.

Next, I add NGL figures for certain countries. Of the 16 countries, NGL is tracked monthly for Saudi, Algeria, Mexico. Russia, Canada, and I think one other. For the others, it is too small to be relevant, with one exception. For Norway, I discovered this time around that they have about 270kbpd of NGL production each month and I will account for this next time.

I do not include RPG or “other liquids.” For the countries involved the volumes are too small to be significant and add too much complexity. This is one reason I call this an all-liquids hybrid.

Now for an explanation of the other 5, Non-OPEC countries.


Russia
Norway
Mexico
Kazakhstan
Canada


Consumption – The Sixteen Countries

Saudi Arabia
Russia
Norway
Iran
UAE
Venezuela
Kuwait
Nigeria (EIA)
Algeria
Mexico
Libya (EIA)
Iraq (EIA)
Angola (EIA)
Kazakhstan
Canada
Qatar

Energy Market Consultants December 2006 Report on FSU exports

http://www.fgenergymc.com/?page=document_type&action=read&id=21

Former Soviet Union (FSU) Demand and Net Exports

From June 2007 IEA Oil Market Report

FSU apparent demand – defined as domestic crude production minus net exports of crude and oil products – has been marginally revised upwards by 16 kb/d in 1Q07 and downwards by 19 kb/d in 2Q07. Overall, the region’s apparent demand in 2007 is virtually unchanged from last month’s report, and isexpected to average 4.0 mb/d (0.1% lower than in 2006).The region’s net exports are expected to continue to peak at close to 9.0 mb/d during 2Q07. This would be the second quarter in a row of post-Soviet highs. It should also be noted that Russian duties fell from 1 April, further boosting net exports. Duties, however, are poised to increase again on 1 June.

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