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Widening LLS Brent differential another uncertainty for deepwater GoM project economics


Widening LLS Brent differential another uncertainty for deepwater GoM project economics

Report summary

We estimate that a change in the future differential between LLS and Brent compared to the historical average will result in a US$15.5 billion decrease in value in deepwater GoM. As more US onshore crude is transported to the Gulf Coast, Wood Mackenzie expects the LLS-Brent differential to widen further. Despite this drop in value, we do not anticipate that any future projects will become uneconomic as a result of this change alone.

What's included?

This report includes 2 file(s)

  • Widening LLS Brent differential another uncertainty for deepwater GoM project economics PDF - 452.71 KB 5 Pages, 1 Tables, 2 Figures
  • Widening LLS Brent differential another uncertainty for GoM project economics June 2013.xls XLS - 96.50 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.

  • Influx of domestic crude to the Gulf Coast weighs on LLS
    • Crude qualities determine GoM price differentials
  • A cheaper LLS erodes value in the long-term
    • What is at risk?
      • Probable developments are still economic
      • Ultimate recovery matters more
      • Appendix
        • Modelling Assumptions
        • Economic Assumptions

In this report there are 3 tables or charts, including:

  • Influx of domestic crude to the Gulf Coast weighs on LLS
    • US crude benchmarks (nominal)
  • A cheaper LLS erodes value in the long-term
    • Impact on value for top 10 projects
    • Economic effects for top 10 probable developments
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