Consensus estimates indicate that the full extent of the Covid-19 pandemic will wipe out at least 18.5 mmb/d of oil demand in 2020 alone. Some analysts have gone even further, suggesting that the number could go as high as 30 mmb/d. As supply reacts to demand, there is no doubt that producers must throttle back production to avoid a destructive oversupply that has already decimated crude oil prices. OPEC+’s new two-year supply deal promises to take 9.7 mmb/d off the market through June 2020, then declining gently. At its best, this will only account for half of the demand shortfall, leaving an excess of at least another 9 mmb/d. In the extraordinary OPEC+ and G20 meetings that surrounded the coordinated deal, it was stated that the free market producers – mainly the US, Canada, Brazil and Norway – would make up a further cut of 5 mmb/d through natural ‘market adjustments’. The question, then, is how?
For the OPEC nations, this is relatively easy. Most are oligarchies, controlled environments where difficult decisions can be implemented swiftly. In many cases, there is only a single firm controlling its vast oil wealth. Thus, Saudi Arabia, though it may have joint ventures with foreign firms, has full control over the entire Saudi crude oil production mechanism. The dictate to reduce production by 2.5 mmb/d is a (relatively) straight forward matter of recalibrating the Kingdom’s integrated production infrastructure. This applies to OPEC states as well, such as Kuwait, the UAE and Angola, where Kuwait Petroleum, ADNOC or Sonangol have tightly integrated crude production infrastructure where control of national output levels is centralised.
Even in countries within OPEC or OPEC+ where the industry is more competitive, this holds true. In Russia, Rosneft, Gazprom and Lukoil may all compete with each other, but they will not ignore an order from the Kremlin to reduce output proportionately in accordance to the supply deal. In OPEC countries such as Iran and Iraq, the small number of national producers makes collusion easier. This even applies in countries within OPEC+ where free market ideals hold more strongly. Petronas may not be able to dictate the output levels of PTTEP, Shell or ConocoPhillips’ Malaysian assets, but it owns enough control in key assets to influence the national output level. Ditto for Azerbaijan, Kazakhstan and Oman, even if the state oil firms there have extensive partnerships with supermajors such as BP, Chevron and Shell.
Adherence aside, it should be relatively easy for the OPEC+ club to meet their target of 9.7 mmb/d if the temptation to cheat doesn’t take hold. But what about the large free market producers? The pact between these countries and OPEC+ calls for the former to reduce production ‘naturally’ according to market pressure. That, again, is relatively easier for Norway and Brazil, where the reins of production are concentrated in the hands of Equinor and Petrobras. But what about the thorn in the oil industry’s side, the USA? There is no American state oil firm, and neither is there a federal body tasked to coordinate national output levels. It can happen on a state-level, like the Alberta state government in Canada or the Texas Railroad Commission – but players in these markets still cannot be compelled to follow through. The US oil industry is a matrix of many, many private players large, medium and small, each driven by a capitalist drive for profit, which is counter intuitive to controlling output.
So, in the absence of top-level control, each player in the US is left to their own devices to control their own output, in hope that each of its rivals will do the same to allow an optimal level of national output. A true expression of game theory. So what is going to happen?
Well, the first – and quickest – way to reduce output is to target onshore wells, particularly in the shale patch. This can happen voluntarily, or enforced through the growing number of bankruptcies. In North Dakota, where the shale revolution took root early, some 6200 wells have been shut, almost a third of all wells. Stopping wells temporarily is easy, but halting them forever is considerably tougher. So the question facing these producers is: which wells to shut, and for how long? For most, the target will be painted on newer wells, where the marginal cost to extract abundant oil is lower, essentially saving the crude for a better price. And running older, less productive wells, with the idea of closing those fully once the resources expire, rather than going through the expensive stop-and-restart process in newer wells. It is a strategy that supermajors ExxonMobil and Chevron have taken in the US shale patch, who announced that they would be slashing rigs in the prolific Permian Basin by 75% (to 15 sites) and 71% (to 5 sites) over 2020. Closures will be on the newer, more prolific wells – a testament to shale’s steep production drop-off curve and, as ExxonMobil put it, ‘better off deferring higher production rates into a period with better pricing.’ This strategy seems to be replicated across the American club of producers, from the giants to regional players such as Continental Resources. And once again, the American shale patch’s flexibility can run both ways, as easy as it is to close down an onshore shale rig (compared to a vast offshore rig), it is equally easy to restart them once market conditions change.
In April alone, estimates from the IEA show that the US, Canada and Brazil accounted for most of the month’s 2.2 mmb/d decline in production. That’s nearly half of what was requested of the free market oil producers. With the OPEC+ deal entering force in May and US oil prices in the doldrums, it would seem that there is enough political will and market pressure to enforce nearly 15 mmb/d of output cuts across the industry. That will go a long way to supporting prices in their current weak state. The hope is that this bitter pill won’t have to last long, and once demand improves and economies re-open, oil producers from across the spectrum will be able to return to business as usual. Or, at least, business as usual in the new normal.
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Funko Action Figuresare a popular collectible toy that is now being incorporated into the workplace to motivate employees. The action figures have been used as an alternative to the traditional desk calendar or as a prize for top performers. With this type of incentive, employers can expect their employees to feel more motivated and productive.
Many employers have found that Funko Action Figures are a great way to motivate their employees and provide incentives for high performance at work. Funko Action Figures are a popular collectible toy that is now incorporated into the workplace. These small collectibles are given to employees to motivate them. Funko figures were once only available at comic book stores, but now they are being used in offices for this purpose.
The company is called Zappos and they first introduced this idea back in 2009. They gave these figurines to their employees as a way of motivating and rewarding them for their hard work and dedication. Although it’s not very clear why the action figures themselves motivate people, we can see that it has been working well for Zappos as they have continued to use it since 2009. These soft-bodied vinyl figures, often called "Pop!" Figures were originally conceived by Mike Becker and founded by Alan Becker.
The Funko Pop! Action Figure is a line of collectible toys produced by the company Funko LLC. They are typically stylized vinyl figures depicting characters from various media and entertainment. First introduced to the public in 2005, the company was originally founded as a bobblehead company in 1998 and became popular through distribution at chain retailers such as Walmart and Target. The first wave of Funko Pops was based on Disney properties like Mickey Mouse as well as other popular culture icons such as Conan O’Brien and Catwoman.
Funko Action Figures are collectible figurines that often depict pop culture characters. They are often used in the office to motivate employees and provide a sense of community. Funko has established itself as a major player in the toy industry with its trademarked Pop! vinyl figures. This company is taking on new ventures like collecting by introducing Funko Action Figures, for example, Boba Fett from the Star Wars movies. This type of product is sometimes called a 'blind box' because you don't know which figure you're getting until you open it. The Boston-based company, BuzzFeed, has introduced this type of toy into their office to help with team building and morale. The employees at this company seem to have a lot of fun with them.
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It is important to know where to gun parts from. There are many places you can buy them from, but it is important to choose the right place so that you get the best quality and service. There are many places where you can buy gun parts from. You can buy them from gun stores, online retailers, and even at a flea market.
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