Canadian oil production in 2016 is expected to increase by 90 tb/d y-o-y to average 4.50 mb/d, revised up by 20 tb/d from the previous MOMR. An upward revision in 4Q15 by national sources carried over to 2016, leading to a higher base for this year.
On this basis, 1Q16 figures were revised up to 4.58 mb/d and higher-than-expected growth in 1Q16 supported predicted growth. Oil sands output in December increased to 2.56 mb/d, a record high. Nevertheless, liquids production in January declined by 40 tb/d to 4.56 mb/d, mostly due to declines in conventional oil output. It is expected that only 0.22 mb/d of new production will gradually come on stream this year, 0.2 mb/d less than new projects brought online last year.
Canada’s 2015 oil supply growth was lower than expected at 100 tb/d, down from 0.27 mb/d of growth in 2014. Despite remarkable growth in oil sands output of 200 tb/d, half of that was offset by a greater decline from conventional oil production over the year. Canadian oil supply growth was revised up by 10 tb/d to 0.1 mb/d in 2015, based on updated national source historical data in 4Q15.
The rotary rig count was 49 rigs (11 oil rigs and 38 gas rigs) on 1 April, down by 51 rigs (-51%), y-o-y. Of these 49 rigs, 34 are active in Alberta, 11 in British Colombia and one in Saskatchewan. Moreover, three offshore rigs are active in the Province of Newfoundland.
Mexico’s oil supply is estimated to have declined by 0.2 mb/d to average 2.60 mb/d in 2015, unchanged from the previous month. Annual oil production for 2016 is expected to decline at a slower pace of 0.13 mb/d, with average supply anticipated to be 2.47 mb/d. Mexican liquids production in February declined by 70 tb/d m-o-m to average 2.52 mb/d. In February, both crude oil and NGLs declined compared with a month earlier.
According to Energy Aspects, output from the Mexico’s Ku-Maloob-Zaap (KMZ), Cantarell and Ligero Marino fields was lower y-o-y by 14 tb/d, 73 tb/d and 18 tb/d, respectively. A fire at the Abkatun permanente platform in early February resulted in steeper declines at the Chuc, Homol and Ixtal fields. In the second quarter one year ago, a fire had led to a 70% reduction in output from the platform.
OECD Europe’s oil supply is forecast to decline by 0.09 mb/d to average 3.66 mb/d in 2016, revised down by 10 tb/d compared with the previous MOMR, following a greaterthan- expected decline in UK oil production in 1Q16. The expected decline will mainly come from the UK and other European countries, except Norway. Supply difficulties are being encountered in the North Sea due to deep cuts in capex, following the sharp decline in oil prices. Despite this, OECD Europe’s oil supply grew by 0.14 mb/d to average 3.75 mb/d in 2015, registering remarkable growth of 90 tb/d and 60 tb/d in the UK and Norway, respectively.
Preliminary February total liquids output figures for Norway indicate an increase of 13 tb/d m-o-m according to the Norwegian Petroleum Directorate (NPD), to average 2.05 mb/d. Of this, 1.62 mb/d was crude oil and the remainder consisted of 0.40 mb/d of NGLs and 0.04 mb/d of condensate, according to the NPD. Oil production is about 9% above that of February in the previous year. Norway decreased investments in oil and gas development and production for 2016 by 9.3% y-o-y.
The UK’s average crude oil production for January–February 2016 declined by 80 tb/d compared with December to stand at around 0.83 mb/d. NGLs output in 1Q16 is expected to increase by 10 tb/d, compared with 4Q15. Hence, it is expected that total liquids supply will decline by 70 tb/d to average 0.89 mb/d in 2016, considering a downward revision by 20 tb/d over the previous month’s forecast, following robust growth of 90 tb/d despite low oil price conditions in 2015. National updating of historical production data led to a downward revision by 10 tb/d in 2015 supply growth compared with the previous month’s estimation.
The ongoing shutdown of the Brae Alpha platform due to gas leakage since December will cause an outage of more than 20 tb/d up to 2Q16. More than 0.19 mb/d is also expected to be offline from the Buzzard and Harding fields starting in July for 4–5 weeks. Additionally, 10 tb/d of production from the Erskine field will be lost as it undergoes planned work in June, according to Energy Aspects. Traditionally, oil and gas fields in the UK undertake seasonal maintenance, thus 2Q16 and 3Q16 output is expected to decline. Declines due to maintenance outages and annual natural declines of 12% will be partially offset by new production startups of 0.17 mb/d this year. One of these new projects is the Laggan Tormore gas field, which started up in February; it will produce 20 tb/d of condensate at peak capacity.