Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
We recently released our latest research in the wake of ongoing
OPEC discussions and the effects of coronavirus (COVID-19) on the
global economy, which have combined to leave the oil market in an
historic state of turmoil.
To help our clients gain further insights from our findings we
organized a webinar held on Tuesday, April 21st where several
experts delivered additional views on their respective coverage
areas.
The key takeaway for each topic we covered is as follows:
Global industry trends: The IHS Markit Brent
crude price base case assumes a low of about 10 USD/bbl in Q2 2020,
reaching nearly 40 USD/bbl at the end of 2021. As a result of such
sustained, low Brent prices we expect global upstream E&P capex
to decrease 25% by 2021.
US production: We expect total US oil
production to drop from 12MM bbl/day at the end of 2019 to 8.7MM
bbl/day at the end of 2022.
Upstream activity: Our latest analysis shows
spud count and frac count decreasing 76% and 42% respectively
compared with our numbers published in February 2020
(Figure 1).
Upstream cement: We expect US oilfield cement
demand to reach volumes 40% lower than those seen during the 2016
downturn; this has never happened since the beginning of the shale
revolution.
Upstream water: The drastic decrease in
drilling & completions (D&C) activity will drive water
demand down by 46% in 2020, the biggest drop in the market since
the shale revolution started; the significant decrease in D&C
activity will only affect produced water volumes towards the second
part of 2020.
Proppant: We project a 47% decrease in
proppant demand from the end of 2019 to the end of 2020.
Pressure pumping: Total North American
hydraulic horsepower (HHP) capacity dropped from about 24.6MM HHP
at the end of 2019 to our current assessment of 23.4MM HHP.
These figures are for total capacity, as we are expecting a
dramatic increase in Q2 2020 of warm stacking and cold stacking of
equipment, with Q2 2020 to Q4 2020 seeing dramatic cuts in overall
capacity.
Figure 1:Comparison of rig and frac count from our
last update in February 2020
Upstream services clients are welcome to contact us with
questions and anyone else can schedule a time as short as one hour
via our new ExpertConnect
platform to discuss our insights. Book in a
consultation with David Vaucher.
