Insight
Non-OPEC decline rates: lower for longer
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Decline rates are a critical factor influencing the oil market and price recovery. Investment cuts at producing fields and a reduced pipeline of new projects since the price crash should have caused non-OPEC decline rates to increase. From historical lows in 2014, decline rates jumped to 5% in 2015. But our analysis suggests they will stay at this level until 2020. In the short term, operators have implemented self-help measures aimed at maximising cash flow. Longer term, projects launched during the period of high investment will mitigate declines over the 2018 to 2020 period. But these drivers will wane beyond 2020 as the effects of the lack of investment are felt. Higher prices will be needed to stimulate investment in new conventional production. We analyse the potential effect on a widening supply gap from different decline rate trends. Stable decline rates are a disappointing story for those looking for significant price support coming from declining conventional production.
Table of contents
- Executive summary
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Introduction
- After reaching record highs, investment in producing fields has now halved
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Why global declines will remain stable until 2020
- Two short-term factors have stabilised declines at 5%
- Longer-term factors will hold decline rates below historical norms
- Differences in regional decline rate trends reflect the wide range of drivers at play
- Onshore declines are far less severe
- Without increasing investment, non-OPEC declines will accelerate after 2020
- Changing global decline rates: potential impact on the oil market
- Conclusion
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Appendix
- Methodology
- OPEC decline rates
Tables and charts
This report includes the following images and tables:
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Annual average non-OPEC decline rate (excluding North America tight oil)Supply gap by 2021, minus 1% change in non-OPEC declines......And plus 1% increase in declines
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New sources of supply that close the 2021 supply gap under our base case forecastNon-OPEC capex on producing oil fields (excluding North America tight oil) and Brent oil priceCanada oil sands production profileOil sands effect on the global decline rateProportion of production by asset vintageAsset vintage decline ratesProduction from European projects onstream since 2011Effect on European decline ratesAverage non-OPEC decline rates: the biggest producing regions have the lowest declines
- 3 more item(s)...
What's included
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