E&P WILL UP BY 5%
OGJ wrote, oil and gas companies are poised to increase spending on exploration and production globally by 5% in 2017, while offshore spending may continue to fall next year, based on Barclays' midyear global spending survey of more than 200 companies.
This survey has been conducted over the last 5 weeks throughout the month of August with most oil companies basing full-year 2016 upstream spending on $50/bbl Brent and $45/bbl West Texas Intermediate.
This midyear update to the Barclay's Upstream Spending Survey shows global upstream spending declining 22% in 2016, an upward revision from their March estimate of a 27% decline. Spending for 2015 has been revised down slightly to a 26% decrease from 23% previously in January, now reflecting actual reported figures.
North America spending is forecast to decline 37% in 2016, slightly better than a drop of 40% estimated in March but could decline further if oil prices drop back down to $40/bbl. Based on Barclays' preliminary estimates, North America spending set to increase 17-23% in 2017. This assumes oil prices stabilize in the $55-60/bbl (WTI) range on average next year and E&P spending in line with cash flows.
More than 77% of survey respondents said they expect onshore well costs in North America to trend down during the next 12 months, despite more than 51% expecting pressure pumping pricing to increase over the same period.
International spending will decline 17% in 2016, the survey said. This compares with Barclays' 2016 estimated decline of 21% in March and 11% decline in January, as national oil companies are now budgeting a 13% decline, European international oil companies down 20%, US-based IOCs down 26%, and international exploration and production firms down 15%. Middle East is the only area of growth in 2016, while Latin America will fall 33% this year.
"International spending in 2017 to be flat to up single-digits based on our preliminary estimates as the IOCs' continued focus on dividends, capital preservation and balance sheet strength will outweigh any opportunities to increase spending. Our 2017 estimate assumes a 5-10% increase in spending from NOCs, offset by declines for all other customer types which are expected to see declines for a 3rd straight year," said Barclays.
After a 34% estimated decline in offshore spending in 2016, Barclays expects a further decline of 25% in 2017, driven by day rate reductions, contract cancellations and delayed deliveries for rigs.
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PLATTS - For full-year 2017, South Korea's crude imports from its biggest supplier Saudi Arabia fell 1.7% to 319.02 million barrels, compared with 324.45 million barrels in the previous year, customs data showed. On the contrary, South Korea has imported 1.77 million mt, or around 13 million barrels, of crude from the US in 2017, about four times higher than in 2016. Shipments from Russia grew to 140,000 b/d last year from 112,000 b/d in 2016.
AOG - ADNOC’s 2030 strategy, he said, aims to capitalise on predicted global economic growth and demand for oil and petrochemical products, particularly in non-OECD countries. As its business responds to changing market dynamics, the company will continue to broaden its partnership base, strengthen its profitability, adapt to new realities and expand market access.
WNN - Under the terms of the assignment and purchase agreement it has signed with Nucleus and Brookfield, Toshiba will sell its rights to assert claims against Westinghouse related to the parent guarantees in the amount of $5.788 billion, and on account of other claims Toshiba holds against Westinghouse in the amount of $2.284 billion to Nucleus, for the sale price of $2.160 billion.
REUTERS - Brent crude futures LCOc1 were at $69.23 a barrel at 0808 GMT, up 8 cents from their last close, but down from a high of $69.37 earlier in the day. Brent on Monday rose to $70.37 a barrel, its highest since December 2014, the start of a three-year oil price slump. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $63.84 a barrel, down from a high of $63.89 earlier, but up 11 cents from their last settlement. WTI hit $64.89 on Tuesday, also the highest since December 2014.