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Pre-FID oil projects: global breakeven analysis and cost curves


Pre-FID oil projects: global breakeven analysis and cost curves

Report summary

The marginal cost of new supply is one of the critical factors which will determine the future price of oil.

We have updated our comprehensive breakeven analysis of future oil developments. These projects are critical for future oil supply and comprise conventional pre-FID projects and future drilling in US onshore Lower 48. Since our January 2016 report, we have seen significant changes to the cost curve.

Key findings include:

70% of production from future developments is now commercial at $60/bbl in 2025

Deep/ultra-deepwater projects are hit hardest although cost deflation is evident

Since 2009 the advent of tight oil has had the biggest impact on the pre-FID cost curve

If prices remain around $50/bbl then most major projects are at risk of deferral or cancellation

What's included?

This report includes 1 file(s)

  • PreFID oil projects global breakeven analysis and cost curves June 2016.pdf PDF - 885.96 KB

Description

This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

This report helps participants, suppliers and advisors understand trends, risks and issues within the upstream oil and gas industry. It gives you an expert point of view to support informed decision making.

Wood Mackenzie's 500 dedicated analysts are located in the markets they cover. They produce forward-looking analysis at both country and asset level across the globe, backed by our robust proprietary database of trusted research.

Proprietary data means a superior level of analysis that is simply not available anywhere else. Wood Mackenzie is the recognised gold standard in upstream commercial data and analysis.

  • Breakeven analysis: an update
    • 70% of production from future developments is now commercial at US$60/bbl in 2025
    • Deep/ultra-deepwater projects are hit hardest, although cost deflation is evident
    • Since 2009 the advent of tight oil has had the biggest impact on the cost curve
    • If prices remain around $50/bbl then most major conventional projects are at risk of deferral or cancellation

In this report there is 1 table or chart, including:

  • Breakeven analysis: an update
    • Cost curve: cumulative production by breakeven in 2025 – by resource theme
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