The rebounded prices for crude oil help the production of shale oil and gas to recover, after the all-time low in 2016. Manufacturing costs for shale oil and gas, specifically in the United States, have also fallen by almost 25-30% in the last few years, resulting in increased production from these sources. The United States and Canada are the leading suppliers of oil and gas from shale and tight resources, together accounting for more than 90% of the global market. In the long term, U.S. production of shale oil and shale gas is expected to double by 2035 and 2040, respectively. Canada will also double the production of shale gas by 2040. As a result, the consumption of chemical additives used in the development of these fields is set to grow.Continue reading
Kline’s July 2017 edition of the Base Stock Production and Re-refining Cash Margins Index, which characterizes recent cash margin contributions in the U.S. base oil market, indicates market turbulence since 3rd Quarter 2016.
The Index estimates cash margin contributions associated with U.S. Group II base stock production. It simulates EBITDA before the deduction of corporate SG&A expenses for typical VGO-based virgin base stock plants and RFO-based re-refineries.
In January 2014, Kline & Company, a worldwide consulting and research firm serving needs of organizations in the lubricants and base stocks industry, introduced its monthly Base Stock Margin Index, a characterization of recent cash margin contributions in the U.S. base oil market over the past 24 months.
The Index estimates cash margin contributions associated with U.S. Group II base stock production. It simulates EBITDA before the deduction of corporate SG&A expenses for typical VGO-based virgin base stock plants and RFO-based re-refineries. Continue reading
Kline projects that global crude oil demand to be about 89 MMbbls/d (million barrels per day) by 2030. Of this, the share of heavy oil resources is expected to be about 15 MMbbls/d. Current global utilization of heavy crude oil stands at about 11.5 MMbbls/day. Considering the decline in production in the coming years, an additional 7 MMbbls/d of capacity will have to be added by 2030 to meet the global demand. Heavy oil, if effectively exploited with partial upgrading, could emerge as one of the major factors in meeting the world’s energy requirements.
Heavy oil has been traditionally processed at the refinery by full upgrading technologies. The major issue is transporting the heavy oil to the refinery. This is resolved by either utilizing capital intensive full upgrading technologies at the wellhead or using diluents to get the crude to pipeline specs; thereby, adding costs for diluent losses and shipping to the wellhead. Partial upgrading technologies tackle these problems by converting only a portion of the vacuum residue in heavy oil, thus enabling it to meet pipeline specifications, at reduced capital investment levels and ideally without the need for diluents. Partial upgrading technologies provide a cost-effective solution for transporting heavy oil from remote locations to refineries.Continue reading