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Last Updated: December 26, 2018
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Headline crude prices for the week beginning 17 December 2018 – Brent: US$62/b; WTI: US$51/b

  • Crude prices remain sandwiched in their narrow range, as the market weighs the effectiveness of OPEC’s recent supply pledges against numbers indicating surging production from America’s shale basins
  • The International Energy Agency has already said it is too early to tell if OPEC’s cuts will balance the market, while OPEC itself has warned of a potential surplus in 2019 and that a ‘deeper cut’ may be necessary in the middle of next year
  • However, the market is also looking for signs that the OPEC cut might be deeper than expected as unplanned supply losses from Iran and Venezuela might remove even more supply than expected, with Libya declaring force majeure (again) at the Sharara field, its largest, after more armed conflict
  • Institutional investors, however, have focused on the macro-environment, cutting their bets to their lowest levels in over two years amid worries about global oil demand and China’s slowing economic growth
  • By Tuesday, WTI and Brent had fallen below their psychological support levels of US$50/b and US$60/b, hammered by worries over global growth, and dipped even further as the US Federal Reserve hiked its interest rates
  • The weakening of WTI prices and a pipeline infrastructure bottleneck led the overall US active rig count to fall by 4 oil rigs, with gas rigs remaining flat; despite the slide in oil prices, most producers are still optimistic about US shale output in 2019, with ConocoPhillips expecting output to grow by 25%
  • Crude price outlook: A hawkish interest rate hike by the US Fed and worries about global economic growth have more than outweighed OPEC’s attempt to steady crude prices. Brent should fall to US$55/b and WTI to fall to US$45/b going into the New Year

Headlines of the week


  • Qatar Petroleum, just days after quitting OPEC, has bought stakes in three offshore Mexican blocks from Eni, joining the latter in the Amoca, Mizton and Teocalli fields in the Gulf of Meixco with joint reserves of 2 billion barrels
  • Eni has announced a new oil discovery in Angola, with the Afoxe prospect in offshore Block 15/06 estimated to hold up to 200 million barrels of light oil
  • Also in Angola’s Block 15.06, Eni has started up oil production at the Vandumbu field, with output pegged at 170,000 b/d in Q119, through the West Hub N’Goma FPSO
  • A fast pace of investment has now lead ExxonMobil to become the most active driller in terms of rigs in the onshore Permian Basin, overtaking Concho Resources, which merged with RSP Permian earlier this year
  • Eni has created a new E&P company focused on Norwegian upstream, with Var Energi formed through the merger of Point Resources and Eni Norge
  • ExxonMobil and Angola’s Sonangol have signed an MoU to cooperate on the development of Block 30, 44 and 45 in the offshore Namibe Basin
  • Also in Angola, BP is aiming to make FID on the Platina deepwater offshore project in the first half of 2019


  • Despite hiccoughs from a change in government and the pledge of a referendum on the matter, Mexico is now planning to begin awarding contracts for its US$8 billion Dos Bocas refinery – the country’s seventh – as soon as March 2019
  • Indonesia has signed an agreement with South Korea’s SK and Hyundai for the US$4 billion upgrade of the Balikpapan refinery in 2019
  • Finland’s Neste Oil has invested US$1.6 billion into boosting its biofuel production capacity in Singapore, to meet increased Asian demand
  • India has delayed commissioning of its massive 1.2 mmb/d refinery in Maharashtra, which is a tie-up with Saudi Aramco and ADNOC, to 2025 as the state continues to face stiff opposition from surrounding farmers
  • After several months of test and first gasoline/jet fuel cargos, Vietnam’s second refinery – Nghi Son – has officially begun commercial production
  • Egypt’s Carbon Holding has announced plans for the US$10.9 billion Tahrir Petrochemical Complex, which would be the largest in the Middle East

Natural Gas/LNG

  • Total has divested 4% of its interest in the Ichthys LNG project in Australia for US$1.6 billion to Inpex, reducing its stake in the delayed project to 26%
  • ExxonMobil and BHP have officially sanctioned FID on the West Barracouta gas field in the offshore Bass Strait area in Australia’s Gippsland Basin
  • Cheniere has completed the commissioning of its first commercial LNG cargo at the Corpus Christi terminal, the first ever LNG export from Texas
  • BP has sanctioned the start of two new gas projects in Trinidad and Tobago – the Cassia Compression and Matapal projects – with first gas expected in 2021
  • Operation of the giant Erawan and Bongkot natural gas fields will now be transferred from Chevron to Thailand’s PTTEP beginning 2022
  • Petronas has agreed to purchase 1.1 mtpa of LNG over 20 years from Cheniere’s Sabine Pass Train 6, supporting the upcoming FID of Train 6
  • Eni has made another gas discovery at the giant deepwater Merakes field in Kalimantan, after having won government approval for its fast-track plan

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EIA projects less than a quarter of the world’s electricity generated from coal by 2050

According to the U.S. Energy Information Administration’s (EIA) International Energy Outlook 2019 (IEO2019), global electric power generation from renewable sources will increase more than 20% throughout the projection period (2018–2050), providing almost half of the world’s electricity generation in 2050. In that same period, global coal-fired generation will decrease 13%, representing only 22% of the generation mix in 2050. EIA projects that worldwide electricity generation will grow by 1.8% per year through 2050.

EIA projects that total world electricity generation will reach nearly 45 trillion kilowatthours (kWh) by 2050, almost 20 trillion kWh more than the 2018 level. Although growth occurs in both OECD and non-OECD regions, the growth in electricity demand in non-OECD regions far outpaces those in OECD regions. Even though electricity demand growth contributes to a region’s fuel share of generation, the scale and scope of that region’s policies provide different incentives and play an important role as well.

Throughout the projection period, some regions have high electricity demand growth, some have aggressive emission reduction policies, and some have relatively little change in both. Varying demand growth and policies across regions lead to different distribution of fuel shares for electricity generation within each region. However, the power sector’s share of generation from renewables tends to increase and the share of coal tends to decrease.

High electricity demand growth

net electricity generation by fuel, India

Source: U.S. Energy Information Administration, International Energy Outlook 2019

India has the most rapid regional electricity demand growth (4.6% per year) in the IEO2019 Reference case. Although India has developed target levels for solar and wind capacity, it does not have an aggressive emissions reduction policy in place, so EIA projects coal-fired generation growth in addition to growth in solar and wind generation. Combined, solar, wind, and coal will account for 90% of India's electricity generation mix in 2050. Combined wind and solar generation increases from less than 10% of India's generation mix in 2018 to more than 50% of the generation mix in 2050. The level of coal-fired generation increases during that same time period, but coal’s share of India's electricity generation mix falls from about 75% of the mix in 2018 to less than 40% in 2050.

Aggressive emissions reductions policy

net electricity generation by fuel, OECD Europe

Source: U.S. Energy Information Administration, International Energy Outlook 2019
Note: OECD is the Organization for Economic Cooperation and Development. International Energy Outlook regional definitions.

New capacity additions for renewable technologies are economically competitive with fossil technologies worldwide. But without policy incentives, growth in generation from renewable sources is limited in regions with slow demand growth. OECD Europe electricity demand is projected to grow at about 1% per year through 2050; however, EIA expects that a regional carbon dioxide cap will contribute to a reduction in fossil-fired generation and an increase in renewables generation to meet demand. Throughout the projection period, EIA expects that the share of wind and solar generation in OECD Europe will increase from 20% to almost 50% by 2050. In that same period, EIA projects that fossil-fired generation will decrease from about 37% to 18% of the generation mix. By 2050, coal-fired generation comprises only 5% of the region’s generation mix.

Low electricity demand growth/No emissions reductions policies

net electricity generation by fuel, other non-OECD Europe and Eurasia

Source: U.S. Energy Information Administration, International Energy Outlook 2019
Note: International Energy Outlook regional definitions.

With annual demand growth slower than 1% and no firm policies aimed at reducing carbon dioxide emissions, the mix of generation resources in the non-OECD Europe and Eurasia region (which excludes Russia) will change only marginally. Through 2050, wind and solar generation increases marginally and accounts for less than 10% of the generation mix in 2050, leaving hydroelectric power as the main source of renewables generation for this region. Growth in natural gas generation will displace some coal-fired generation—which falls from 31% in 2018 to 15% in 2050—but the overall share of fossil generation will change relatively little throughout the projection period.

January, 23 2020
EIA expects U.S. energy-related CO2 emissions to decrease annually through 2021

In its latest Short-Term Energy Outlook (STEO), released on January 14, the U.S. Energy Information Administration (EIA) forecasts year-over-year decreases in energy-related carbon dioxide (CO2) emissions through 2021. After decreasing by 2.1% in 2019, energy-related CO2 emissions will decrease by 2.0% in 2020 and again by 1.5% in 2021 for a third consecutive year of declines.

These declines come after an increase in 2018 when weather-related factors caused energy-related CO2 emissions to rise by 2.9%. If this forecast holds, energy-related CO2 emissions will have declined in 7 of the 10 years from 2012 to 2021. With the forecast declines, the 2021 level of fewer than 5 billion metric tons would be the first time emissions have been at that level since 1991.

After a slight decline in 2019, EIA expects petroleum-related CO2 emissions to be flat in 2020 and decline slightly in 2021. The transportation sector uses more than two-thirds of total U.S. petroleum consumption. Vehicle miles traveled (VMT) grow nearly 1% annually during the forecast period. In the short term, increases in VMT are largely offset by increases in vehicle efficiency.

Winter temperatures in New England, which were colder than normal in 2019, led to increased petroleum consumption for heating. New England uses more petroleum as a heating fuel than other parts of the United States. EIA expects winter temperatures will revert to normal, contributing to a flattening in overall petroleum demand.

Natural gas-related CO2 increased by 4.2% in 2019, and EIA expects that it will rise by 1.4% in 2020. However, EIA expects a 1.7% decline in natural gas-related CO2 in 2021 because of warmer winter weather and less demand for natural gas for heating.

Changes in the relative prices of coal and natural gas can cause fuel switching in the electric power sector. Small price changes can yield relatively large shifts in generation shares between coal and natural gas. EIA expects coal-related CO2 will decline by 10.8% in 2020 after declining by 12.7% in 2019 because of low natural gas prices. EIA expects the rate of coal-related CO2 to decline to be less in 2021 at 2.7%.

The declines in CO2 emissions are driven by two factors that continue from recent historical trends. EIA expects that less carbon-intensive and more efficient natural gas-fired generation will replace coal-fired generation and that generation from renewable energy—especially wind and solar—will increase.

As total generation declines during the forecast period, increases in renewable generation decrease the share of fossil-fueled generation. EIA estimates that coal and natural gas electric generation combined, which had a 63% share of generation in 2018, fell to 62% in 2019 and will drop to 59% in 2020 and 58% in 2021.

Coal-fired generation alone has fallen from 28% in 2018 to 24% in 2019 and will fall further to 21% in 2020 and 2021. The natural gas-fired generation share rises from 37% in 2019 to 38% in 2020, but it declines to 37% in 2021. In general, when the share of natural gas increases relative to coal, the carbon intensity of the electricity supply decreases. Increasing the share of renewable generation further decreases the carbon intensity.

U.S. annual carbon emissions by source

Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 2020
Note: CO2 is carbon dioxide.

January, 21 2020
Latest issue of GEO ExPro magazine covers Europe and Frontier Exploration, Modelling and Mapping, and Geochemistry.

GEO ExPro Vol. 16, No. 6 was published on 9th December 2019 bringing light to the latest science and technology activity in the global geoscience community within the oil, gas and energy sector.

This issue focusses on oil and gas exploration in frontier regions within Europe, with stories and articles discussing new modelling and mapping technologies available to the industry. This issue also presents several articles discussing the discipline of geochemistry and how it can be used to further enhance hydrocarbon exploration.

You can download the PDF of GEO ExPro magazine for FREE and sign up to GEO ExPro’s weekly updates and online exclusives to receive the latest articles direct to your inbox.

Download GEO ExPro Vol. 16, No. 6

January, 20 2020