Global Heavy Crude Oil production Overview
Global heavy crude oil production in 1Q19 was 11.6 million b/d, down 254,000 b/d due to production disruptions in Venezuela as well as mandatory production curtailment in Alberta, Canada.
Looking forward, global heavy oil production decline will slow down as Alberta government scales back the curtailment requirement and Venezuela recovers from the power outages in March. Iraq is expected to ramp up heavy oil production in 2019 and 2020, offsetting the output drop in Iran due to US sanctions. Global heavy oil supply is expected to average 11.4 million b/d in 2019. Starting from 1Q20, the new IMO sulfur cap will drag down heavy oil production in Russia, which has the highest refinery high sulfur fuel oil (HSFO) yield in the world. Other major heavy oil producing regions—Latin America and Middle East—will experience minimal impact from the new IMO regulation because supply has already tightened in these regions due to production disruptions.
Table 1. List of World Top 10 heavy oil producers
|Country||2019 Q2 Production (Mb/d)||2018 Q2 Production (Mb/d)||YoY Change (Mb/d)||EUR through 2035 (Million bbls)||Proved Heavy Oil Reserve (Billion bbls)|
Global Heavy Crude Oil Quality Overview
No major heavy oil projects came online during 1Q19. We expect that new heavy oil fields in Iraq such as Sheike Adi, Najmah, and Qayara will be brought on stream by the end of 2020. Meanwhile, several oil sands projects in Canada such as the Sepiko Kesik and Jackfish East Expansion projects that were scheduled to start up between 2018 and 2020 are now postponed to post 2023.
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