Friday March 16, 2018
In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.
Let’s take a look.
1. Decline rates shrink
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- In a very surprisingly development, the IEA reported that the decline rates at existing mature oil fields have actually shrunk quite a bit over the last few years.
- The average decline rate dipped to just 5.7% in 2017, after averaging 7% for the period of 2010-2014.
- The improvement was unanticipated because many analysts expected that the oil market downturn that began in 2014 would lead to spending cuts, resulting in less maintenance and investment, and a corresponding spike in decline rates.
- But instead, the opposite has occurred. The oil industry has focused its resources on maintaining existing output (at the expense of developing new projects), helping to slow the rate of decline.
- The IEA singled out the North Sea and Russia, two places that have posted significant improvement.
2. Refiners might not want all that shale
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- U.S. shale production is growing rapidly, but the light sweet oil coming from Texas is not exactly what Gulf Coast refiners want. Many facilities are equipped to handle medium and heavy oil and won’t simply buy…
