the research consultancy for energy technologies
What is the best way for investors to drive decarbonisation? We argue a new ‘venturing’ model is needed, to incubate better technologies. CO2 budgets can also be stretched furthest by re-allocating to gas, lower-carbon oil and lower-carbon industry. But divestment is a grave mistake.
This data-file screens 15 companies at the cutting edge of nuclear technology, to assess whether fission or fusion breakthroughs can realistically be factored into long-run forecasts of energy markets or the energy transition.
Our conclusion is “not yet”. Despite many signs of exciting progress, the average technical readiness in our sample is TRL 4 (testing components). Four companies are working to lab-scale prototypes. Energy gains and system stability remain key challenges.
The database summarises each company, including its technology, location, employee count, notable backers and technical technical readiness. Our notes also cover expected costs or timings, where disclosed.
This data-file summarises 120 patents into Enhanced Oil Recovery, filed by the leading Oil Majors in 2018. Based on the data, we identify the “top five companies” and what they are doing at the cutting edge of EOR.
We find clear leaders for water-flooding both carbonate and sandstone reservoirs. At mature fields, we think these operators may be able to derive >10pp higher recovery factors; and by extension, lower decline rates, higher cash flows and higher margins.
As more of the world’s oilfields age, having an “edge” in EOR technology will make particular Oil Majors more desirable operators and partners, to avoid the higher costs and CO2 intensities of developing new fields to replace them.
This data-file presents our “top five” conclusions on the lubricants industry, after reviewing 240 patents, filed by the Oil Majors in 2018. The underlying data on each of the 240 patents is also shown in the ‘LubricantPatents’ tab.
We are most impressed by the intense pace of activity to improve engine efficiencies (chart above), across over 20 different categories. As usual, we think technology leadership will drive margins and market shares. ‘Major 1’ stands out, striving hardest to gain an edge, by a factor of 2x. ‘ Major 2 has the ‘greenest’ lubricant patents, across EVs and bio-additives. Major 4 has the single most intriguing new technology in the space.
The relative number of patents into Electric Vehicle Lubricants is also revealing. It shows the Majors’ true attitudes on electrification, in a context where they are incentivised to sell new products into the EV sector. Our lubricant demand forecasts to 2050 are also noted.
This data-file is a screen of 25 companies, which are turning CO2 into valuable products, such as next-generation plastics, foams, concretes, specialty chemicals and agricultural products.
For each company, we have assessed the commercial potential, technical readiness, partners, size, geography and other key parameters. 10 companies have very strong commercial potential. 8 concepts are technically ready, 5 are near-commercial, while 12 are earlier-stage.
The featured companies include c20 start-ups. But leading listed companies include BP (as a venture partner), Chevron Phillips, Covestro, Repsol, Shell (as a venture partner) and Saudi Aramco.
This data-file tabulates over 20 next-generation subsea robots, being pioneered around the industry. Each one is described and categorized, including by technical readiness.
These electric solutions could be very material for offshore economics, improving oilfield decline rates and maintenance costs. Innovations include:
8 of the concepts in our database have all three of these capabilities above. They are at TRLs 5-6, and should be commercially ready in the early 2020s.
The leading companies are tabulated in the data-file, by Major and Service firm (chart below).
These solutions can save c$0.5-1/boe for a typical offshore oilfield, we estimate: performing inspection tasks 2-6x faster than incumbents, as well as halving costs and eliminating the weather-dependency associated with launching-recovering traditional ROVs. For full details, please download the data-file.
Our LNG supply model looks project-by-project, across 115 LNG facilites: including c40 mature plants, c15 under development, c20 in design and c30 under discussion.
Our base case supply estimates come from “risking” the supply associated with each of these projects (chart below).
The outlook depends on the path. The 2030 supply outlook can vary by 250MTpa, when comparing all reasonably possible supply (top chart) against the firm supply-growth that looks all but locked (bottom chart).
The greatest opportunities in LNG are therefore to create new demand and to advance competitive projects when others are cannot. To see which projects we think will progress, please download the data-file.
This database tabulates c200 venture investments made by 8 of the leading Oil Majors, as the energy industry advances and transitions.
The largest portion of activity is still aimed at incubating Upstream technologies (c40% of the investments), as might be expected.
But leading Majors are also building rapid capabilities in new energies (38%) and digital (36%), as the energy system evolves. We are impressed by the opportunities. Venturing is likely the right model to create most value.
The full database shows which topic areas are most actively targeted by venturing; including by company. We also chart which companies have gained stakes in the most interesting start-ups.
This data-file reviews 300 technical papers from 2018 and 350 technical papers from 2019. Hence, we can identify the cutting edge of shale technology. Each paper is summarised, categorized by topic, by country, by basin, by company and by ‘impact’.
The YoY trends in 2019 show an incredible uptick in EOR, machine learning and well spacing studies, which are fully reviewed in the file.
On our assessment, one third of the papers support material improvements in well-productivity. c98% are data-driven, including c39% using advanced computational modelling and another c20% using data to optimise operations.
The Permian hosted the most research, pulling further ahead of other basins. You may be surprised by the identities of the companies publishing the most technical papers in shale.
Our oil price outlook is informed by a 45-line supply-demand model, running month-by-month out to 2025. This download contains both the model, and a 3-page summary of our outlook.
Since 2Q19, our estimates of oil market over-supply have effectively halved. But we still think an oil rout may be needed in 2020, to alleviate an overhang that otherwise stretches out to 2025 (chart below).
After ten years forecasting oil markets, our humble conclusion is that all oil models are wrong. Some are nevertheless useful. To be most useful, our model takes a Monte Carlo approach to the key uncertainties, to quantify the “risk” of positive and negative surprises…
Please download the full model to see, and to flex all our input assumptions Included with the download is a summary of our oil price thesis, plus country-by-country notes, which inform our longer-term forecasts.