Non-OPEC Oil Supply Plagued by Uncertainty and High Costs
Xinhua Financial News High costs and the uncertainty of the oil market have prompted the Centre for Global Energy Studies (CGES) to revise downward its forecast for supply growth from non-OPEC producers.
3/6/2007
The CGES calculated that actual growth in non-OPEC supplies had been over-estimated by an average of more than 400,000 bpd in recent years, said the report entitled "Non-OPEC production: Rising costs slow output growth."
Increases in total non-OPEC production will reach 1.07 million bpd in 2007 compared with 456,000 bpd last year, said the CGES in its latest forecast.
"The problem is that new projects must first compensate for output declines at existing fields before they can add to overall capacity," explained the report. Unforeseen technical problems, unexpected project delays, bad weather, accidents and geopolitical risks forced the downward revision by the CGES. But, the London-based research center said, compared to 2006, 2007 will be a banner year for non-OPEC output.
"If you add up all projects which should come upstream this year the figure is even more than the 1.2 million bpd which the International Energy is forecasting, but you have to assume they don't come upstream as planned," said Dr Leo Drollas, head of the CGES oil analysis.
He added with the uncertainty of the oil market, "even we could be wrong. If the figure is reduced to 500,000 bpd, that could push prices higher."
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