Comments related to Oil and Natural Gas production in this thread.
Author: D C
Open Thread Non-Petroleum, Sept 7, 2019
Comments not related to Oil and Natural Gas production in this thread.
Permian Basin Scenarios
Seems we don’t know what future completion rates will be in the Permian basin or anywhere. There are many different opinions on whether the completion rate might increase, decrease or stay the same. In my view, the conservative assumption is to assume they will not go up or down, but that the completion rate will remain constant. I have created three different scenarios: in the first, the completion rate increases; in the second, the completion rate decreases; the third scenario has a constant completion rate.
Open Thread Non-Petroleum, August 26, 2019
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US Tight Oil Scenario based on BNP Paribas Study
An interesting analysis was recently published by BNP Paribas (one of the top 10 banks in the World by assets) entitled Wells, Wires, and Wheels… . In that analysis they argue that long term oil prices will fall to $20/b or less in order for oil used for personal land transport to compete with EVs powered by wind and solar at current cost levels.
I reworked my oil price assumptions, first with a simple scenario that follows the EIA’s AEO 2018 reference oil price scenario up to $70/b in 2017$ and then remains at that level long term. Second I noticed that a scenario with such an oil price assumption sees tight oil output fall in 2022 so the scenario was revised with oil prices rising from 70 to 80 per barrel from 2022 to 2024 and then remaining at that level until 2028. The BNP Paribus analysis suggests that EVs will have cut significantly into oil demand by 2022 to 2025 so I assume oil prices fall to $20/b over the next 10 years.
Scenarios below.
