Summary of Q4 2017
Global crude oil and condensate production in Q4 2017 was about 76.6 MMb/d, a 370 Mb/d drop compared to Q3 (Figure 1). Four of the seven regions experienced certain levels of production drops, led by the Middle East with a decline of about 140 Mb/d. North America produced nearly 360 Mb/d more oil in Q4 2017 than Q3, mainly due to the shale production recovery in the US. Europe increased by around 240 Mb/d in Q4 2017, driven by UK and Norway.
Several oil projects came on stream in Q4 2017, including one oil sands projects ─ CNRL’s Horizon Phase 3 (80 Mb/d) project. Other oil projects that started up in Q4 include ExxonMobil’s heavy crude Hebron (150 Mb/d) offshore east coast of Canada; Dana Petroleum’s Western Isles project (50 Mb/d); and Premier’s Catcher project (50 Mb/d) offshore UK.
Here is an oil production summary by region for Q4 2017 compared to Q3 2017. In North America, production in Q4 reached 14 MMb/d, a 357 Mb/d increase compared to Q3. US contributed the majority of the increase (333 Mb/d) as shale industry started to recover. Canada only saw a slight increase of 24 Mb/d. In Latin America, production in Q4 was about 8.6 MMb/d, a slight decrease of 39 Mb/d compared to Q3 due to the decreases from Venezuela, Brazil and Ecuador. In Europe, production in Q4 increased by 240 Mb/d to 3.3 MMb/d. Both UK and Norway contributed to the increase. Africa slightly increased production in Q4 by about 36 Mb/d, to 8.2 MMb/d compared to Q3. In Asia Pacific, production dropped by 63 Mb/d in Q4 compared to Q3, mostly due to production decline in China (43 Mb/d drop). The Middle East’s production dropped by about 145 Mb/d in Q4 to 28 MMb/d, driven by Iraq and Iran as those two countries dropped about 115 Mb/d. In Russia & CIS, production was at 13.7 MMb/d in Q4, about a 10 Mb/d decrease compared to Q3. Russia, participating in the production-cut deal with OPEC, reduced about 50 Mb/d of crude output in Q4.
Outlook for Q1 2018
Looking forward, global oil and condensate production in Q1 2018 will continue to increase by about 310 Mb/d contributed from four regions led by North America, driven by US Shale as WTI oil price remaining above $60/bbl.
Suncor’s Fort Hills Phase 1 (180 Mb/d) just came on online in Jan. 2018. Looking forward, a few new oil projects are expected to come online in Q1 2018, including the Satah Al-Razboot project in UAE with capacity of 100 Mb/d, the Clair Ridge project in UK with capacity of 120 Mb/d, Chevron's long delayed Big Foot project in deepwater GOM (75 Mb/d), and the Buzios 3 project in Brazil with capacity of 150 Mb/d.
In North America, production in Q1 2018 is expected to increase by 250 Mb/d in the region. The US will see a growth of 200 Mb/d, mainly from its shale operations. Canada is expecting a production increase of 27 Mb/d as new oil sand project Fort Hills cranks up. In Latin America, production in 2018 Q1 is expected to further drop by 240 Mb/d in the region as crude production continue to decline in Venezuela and Mexico. In Europe, production in Q1 2018 is expected to slightly drop, losing about 20 Mb/d in the region. UK and Norway production will remain stable through this quarter. Africa’s production in Q1 2018 Q1 is expected to remain flat. In Asia Pacific, production in Q1 2018 is expected to increase by 106 Mb/d, as China and Malaysia are projected to raise production by 54 Mb/d and 44 Mb/d, respectively. In the Middle East, Q1 2018 Q1 will see the region increase output by about 130 Mb/d, driven by a production ramp-up in Iraq, which lost production in Q4 2017. Oil production in Russia & CIS in Q1 2018 is expected to increase by about 130 Mb/d as Russia and Kazakhstan projected to ramp up crude output.
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