“This will be the second year in a row in which global oil production fails to grow”, says Espen Erlingsen, Vice President Analysis at Rystad Energy. “Shale is the least vulnerable, while offshore continues to be the victim since OPEC’s decision in November 2014,” he suggests.
Rystad Energy’s analysis shows that shale production is expected to grow significantly from 2018, with a yearly addition of 1 million bbl/d, whilst offshore will see a production decline from 2018.
“Whilst shale has proven to be resilient with only marginal reduction in produced volumes, only 1.3 billon bbls of new offshore oil volumes are sanctioned in 2016, compared to a yearly average around 10 billion bbls in the period 2010 - 2013,” Espen Erlingsen comments.
Both shale and OPEC production will play an important role in making sure that enough oil will flow to the market over the next year. Offshore sanctioning activity is at its lowest since the '70s, and the effect of this will become increasingly visible, with a long term decline in the non-OPEC non-shale production expected.
