The global oil cost curve: can US tight oil fill the supply gap? Report

Insight 22 February 2017

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Report summary

Wood Mackenzie's Oil Supply Tool now has a granular breakdown of the global cost curve. Breakeven costs have been assigned to every element of our global liquids supply view providing a comprehensive view of the global cost of supply. In this insight we highlight a portion of the valuable analysis that this dataset can provide. Key findings include: Higher cost projects required to fill a supply gap of 22 million b/d by 2026 Pre-FID projects are crucial part of the future supply mix making up half of the new supply required by 2026 Wolfcamp and Eagle Ford plays dominate the pre-FID cost curve in 2026 But as interest in the Permian inflates so too will costs

Breakeven analysis
- The global cost curve incorporates over 4,000 assets from onstream to yet-to-find (YTF)
- Over time more expensive non-OPEC sources drive up the cost of supply
- Higher cost projects required to fill a supply gap of 22 million b/d by 2026
- Pre-FID projects are crucial part of the future supply mix making up half of the new supply required by 2026
- Wolfcamp and Eagle Ford plays dominate the pre-FID cost curve in 2026
- But as interest in the Permian inflates so too will costs