WoodMac: NorAm oil output increases to outpace Middle East 4:1 by 2020

By 2020, increases in North American oil production will outpace that of the Middle East by 4:1 on a per barrel basis, and by 2030, North American output will increase by 390 million tonnes of oil equivalent (mtoe) from 650 mtoe in 2009, according to long-term analysis of global energy trends by Wood Mackenzie.

The growth rivals an increase of 430 mtoe in the Middle East, where oil production will accelerate primarily due to increases in Iraq. North American tight-oil supply expansion is expected to plateau after 2020.

“The growth in North American supply has introduced a new dynamic to global oil prices, with US tight oil providing a price floor for global oil prices,” commented Ann-Louise Hittle, head of macro oils research for WoodMac. “Increasing US tight oil supplies and Canada’s growth in oil sands production are expected to continue to add stability to the international oil market, rather than remove it.”

WoodMac in March declared the North American tight-oil market “too strong to breakdown (OGJ Online, Mar. 25, 2014).”

WoodMac also forecasts that North American gas production will continue its rapid expansion, doubling to 1,000 mtoe in 2030 from the beginning of the energy boom in 2005.

The growth in oil and gas production is occurring in an environment of locally weakening demand, and by 2018 North America’s energy exports will exceed imports, WoodMac says. By 2018 North America will also have overtaken the gas output of Russia and the Caspian Sea, and will grow to be the world’s largest gas producing region by 2030.

Redefined world energy markets

WoodMac predicts that North America’s enormous supply growth will redefine global energy markets. Markets are increasingly interconnected and supplier-consumer relationships are increasingly dependent, as reflected by Russia’s gas trade links with Europe.

“Global energy markets are reaching a new equilibrium,” said Paul McConnell, principal analyst for WoodMac’s global trends service. “As demand shifts East, it will expand to extraordinary proportions, but this era is also one of robust energy supply. As a result, we see few, if any, strong upside signals for oil, gas, and coal prices.

“This shift from volume to value means a rebalancing towards a supply outlook more appropriate to a world in which demand growth, while still remarkable in the context of history, is somewhat softer than was expected only a few years ago,” McConnell said. “As the energy industry adjusts and settles into this new equilibrium, cost pressures will remain at the forefront of executive concerns.”

He added that China’s energy consumption will be unrivalled by 2030, making it “the center of gravity for global energy demand.” McConnell sees energy demand growth in the Asia-Pacific region during 2014-30 outpacing that of North America by five times.

Europe’s import dependence

WoodMac predicts that Europe’s outlook over the next several years will differ greatly than that of North America’s, as Europe will become increasingly import dependent, exposed to high fuel costs, and energy insecure.

A growing reliance on imported natural gas will result in an increase in imports to Europe to 320 mtoe from 215 mtoe during 2014-30.

“Russian gas remains competitive against other alternatives and will continue to be the cornerstone of European gas supply,” said Massimo Di-Odoardo, principal analyst, European gas and power for WoodMac. “It also represents a major market for Russian gas, even in light of the recent signing of a gas pipeline deal to export Russian gas to China. Therefore, our long-term view is that the Europe-Russia gas relationship will continue out of necessity.”

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

BHI: US oil rig count rises for first time in 30 weeks

07/02/2015 A sudden 12-unit jump in oil-directed rigs during the abbreviated week ended July 2 represented their first rise since Dec. 5, 2014, and helped lif...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

Shell makes FID on Appomattox deepwater development in Gulf of Mexico

07/01/2015 Royal Dutch Shell PLC has taken a final investment decision (FID) on the Appomattox deepwater development, authorizing construction and installatio...
White Papers

Definitive Guide to Cybersecurity for the Oil & Gas Industry

In the Oil and Gas industry, there is no single adversary and no single threat to the information tech...

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by
Available Webcasts

Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected