Wood Mac: 2016 Promises Upstream Opportunities despite Tough Times

Wood Mac: 2016 Promises Upstream Opportunities despite Tough Environment
A new report from oil and gas consultancy Wood Group shows that 2016 promises many opportunities around the world for the upstream sector in spite of challenging times.

A new report released by Wood Mackenzie shows that, in spite of a challenging year ahead for the oil and gas industry, 2016 promises many opportunities around the world for the upstream sector.

One of the leading research and consulting firms following the oil and gas sector, Wood Mackenzie asked its teams around the world to highlight the main events in their regions for its Global Upstream report. These analysts point to several positive developments for the upstream industry in 2016 ranging from Canada to Australia and from Mexico to Siberia.

Smaller GOM Players Expected to Surprise in 2016

In the Americas, Wood Mac predicts that, despite lower oil prices and deferred development, an additional 250,000 barrels of oil equivalent per day of new Gulf of Mexico production will hit the market in 2016, pushing GOM production to a new peak of 1.9 million boepd. As production grows, the research firm expects many large and mid-sized companies will curtail development plans, but it also believes that smaller, private equity-backed players will surprise and press forward with development work and exploration activities. These latter companies favour the low-risk, low-cost Miocene plays, which are ideal in a low-oil price environment, Wood Mac's analysts said.

In addition, the GOM industry is expected to experience a pickup in the M&A market after years of showing a faint pulse.

"With oil prices continuing their downward spiral, sellers are more motivated than ever to offload positions. Look for private money to pick up bargains, especially in the less intensive capex projects," Wood Mac said.

"Meanwhile, we are looking for some large players with limited exposure to deepwater GOM to increase their exposure in the form of significant asset deals or outright takeovers of mid-sized players."

In Canada, Wood Mac believes that LNG "is a go". It said that Canada will forego any oil sands project final investment decisions this year, but will instead welcome construction start-up at Petronas's Pacific North West LNG project in British Columbia. The LNG project is now advantaged by the depreciated Canadian dollar and lower wage costs brought on by low oil prices.

Offshore Canada, Wood Mac said that exploration projects have impressed.

"Both the Nova Scotia and Newfoundland & Labrador provinces of Canada stood out in 2015 for active offshore exploration campaigns. In 2016, we expect both regions to continue to buck the global trend of declining exploration activity. More companies will join the exploration efforts and a development timeline for the Bay du Nord discovery in the Flemish Pass will be established," it said.

South of the border, Wood Mac believes that Mexico's deepwater licensing round will be a success.

"The deepwater phase of Round One will close in late 2016. It will be highly contested and a success. This phase offers 10 blocks in the Sabinas-Rio Grande (primarily Perdido Foldbelt) and Salinas Sureste basins. Given the long lead time of deepwater projects, high prospectivity of acreage and favourable contracts, Mexico's deepwater will be attractive even at today's oil prices," Wood Mac said, stating that it estimates yet-to-find resources range between 15 and 20 billion barrels of oil equivalent in the Sabinas-Rio Grande basin.

In Brazil, Wood Mac does not expect Petrobras to hit its $15.1-billion divestment target by the end of 2016. "Petrobras will be competing against over $320 billion of upstream assets on the market, making it harder to hit its target," it said, pointing out that the Brazilian firm will focus on divesting its downstream assets.


12

View Full Article

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Kartikey Mevada | Jan. 31, 2016
Food for thought


Related Companies
 Company: Petrobrasmore info


 - Brazil Court Suspends $5.2B Sale Of Petrobras Unit To Brookfield (Feb 10)
 - Brazil's Petrobras Breaks Drought In LatAm Market (Jan 9)
 - Brazil's Petrobras, Joint Venture Hand Back Piracuca Oil Concession (Jan 3)
 Company: Total S.A.more info
 - Total CEO Says OPEC Needs to Prolong Cuts to Eliminate Glut (Feb 22)
 - Iran Will Finalize Contract With Total Within Two Months (Feb 21)
 - Abu Dhabi Awards China's CEFC 4% Of Oil Concession For $900MM (Feb 20)
 Company: ConocoPhillipsmore info


 - Origin To Take A$1.9B Charge On LNG, Exploration Assets (Feb 15)
 - ConocoPhillips Loss Smaller Than Expected On Higher Oil Price (Feb 2)
 - Australia, East Timor Aim To Agree Maritime Border By Sept (Jan 24)
 Company: Chevron Corporationmore info
 - Chevron Suspends Production At Gorgon Train Two LNG Project (Feb 24)
 - Cargo Loadings At Australia's North West Shelf Project Halted (Feb 8)
 - US Transparency Reversal Stings Canadian, European Oil Firms (Feb 3)
 Company: PetroChinamore info
 - Petrochina Aims To Meet A Third Of China's Shale Gas Target By 2020 (Jan 26)
 - China's Oil Majors Set To Lift CAPEX For First Time In Years (Jan 26)
 - China's Top Oilfield to Cut CAPEX by 20% in 2017 (Dec 29)
 Company: ENImore info


 - Eni Completes Sale of 10% Shorouk Concession Interest (Feb 14)
 - Eni Starts Production from East Hub Development Project (Feb 8)
 - Egypt Said to Seek LNG as BP to Eni Gas Flow to Restore Exports (Feb 6)
 Company: PETRONASmore info


 - Malaysia's Petronas Says RAPID Project Remains On Track (Jan 27)
 - Sources: Saudi Aramco Shelves Plan For Venture With Malaysia's PETRONAS (Jan 25)
 - Total, Shell, Eni Eligible to Bid for New Iran Oil, Gas Projects (Jan 3)
 Company: Repsol more info
 - Spain's Repsol Aims To Cut Debt By A Further 16% In 2017 (Feb 23)
 - Poll: US, Foreign Oil Companies to Prosper in Trump's USA (Nov 10)
 - European Industry Says Trump Must Define Energy Policy (Nov 9)
 Company: Sinopecmore info
 - China To Tender More Xinjiang Oil, Gas Blocks To Non-State Firms (Jan 23)
 - China's Sinopec Weighs Takeover Of Gulf Keystone (Dec 13)
 - Sao Tome To Terminate Oil Block With Sinopec-Sonangol Joint Venture (Dec 7)
 Company: Wood Mackenziemore info
 - Oil Exploration Spending May Drop Further Next Year (Dec 9)
 - WoodMac: 50% of Oil Majors' Production could be Hit with Carbon Costs (Nov 18)
 - European Industry Says Trump Must Define Energy Policy (Nov 9)
 Company: Royal Dutch Shell plcmore info
 - Shell Shakes Up Oil Trading World With Brash Buying Sprees (Feb 20)
 - Global LNG Demand Set to Rise to 2030 (Feb 20)
 - NPD Grants Consent for the Expansion of Nyhamna Gas Plant (Feb 10)
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
Regional Manager - Saybolt
Expertise: Business Development|Operations Management|Surveying
Location: Linden, NJ
 
Business Development Representative - Saybolt
Expertise: Business Development|Sales
Location: New Orleans, LA
 
Associate Security Analyst Job
Expertise: HR - General|PR / Corporate Communications|Security
Location: Denver, CO
 
search for more jobs

Brent Crude Oil : $56.58/BBL 1.32%
Light Crude Oil : $54.45/BBL 1.60%
Natural Gas : $2.62/MMBtu 1.15%
Updated in last 24 hours