By OGJ editors
HOUSTON, Mar. 8 -- Last year's fourth-quarter momentum for oil supply from outside the Organization of Petroleum Exporting Countries is expected to be maintained during 2007, said Edinburgh consultant Wood Mackenzie Ltd.
WoodMac's forecast came in a report entitled "Outlook for Supply in 2007: Non-OPEC Increases to Continue," in which analysts present a global project-by-project oil supply picture for 2007.
Total non-OPEC oil and natural gas liquids production, including Angola, is forecast to average 50.2 million b/d in 2007, up 1.5 million b/d from 2006, WoodMac said. Although Angola recently joined OPEC, WoodMac included Angola in the non-OPEC countries for the purposes of comparison with 2006
Patrick Gibson, WoodMac principal oil supply analyst said, "Our analysis shows that there will be significant increases in the [Former Soviet Union] states, North America, and Africa. The main areas that will experience decline are the North Sea and the Asia-Pacific region."
Gibson said WoodMac identified seven projects, led by BP PLC's Azeri Chirag Guneshli development in Azerbaijan, that will add an average of over 100,000 b/d each. Six of those projects already are on stream.
"With the top 25 projects adding an aggregate 2.1 million b/d of capacity, there is a broad base to the production growth expected," Gibson said. "The bulk of the additional supply in 2007 will consist of light and medium grade crudes."
The forecast is based upon a risked approach that takes into account average levels of supply losses, Gibson said. Unexpected geopolitical events and technical failures could affect the forecast.
Ann-Louise Hittle, WoodMac head of oil market analysis, said there is little room in the market for OPEC member states to increase production.
"The non-OPEC supply serves to keep the pressure on OPEC to defend prices," Hittle said. "This points towards more OPEC 10 production restraint during 2007, which serves to increase the group's spare productive capacity. During 2007 this could be a source of downward price pressure, although the tension over Iran's nuclear enrichment program is an offsetting factor."
