The latest data from the International Energy Agency (IEA) shows global oil demand remains strong, providing further impetus for the development of Carnarvon’s Bedout Sub-basin assets offshore Western Australia.
According to the IEA’s May Oil Market Report, world oil demand is forecast to rise by 2.2 million barrels per day (bpd) year-on-year in 2023, to an average of 102 million bpd.
Driving demand is a better-than-expected recovery in Chinese oil demand, which reached a record of 16 million bpd in March.
While demand is on the rise, supply continues to be constrained, with significant outages in Iraq, Nigeria and Brazil seeing global oil supply slip 230,000 bpd in April, to 101.1 million bpd.
While prices have fallen in recent months, on muted industrial activity and higher interest rates contributing to concern of a downward shift in oil demand growth, the IEA warns of tighter market balances in the second half of 2023.
The IEA expects demand to eclipse supply by nearly 2 million bpd in the back half of the year, which could see prices regain momentum.
This scenario highlights the need for new supply, with Carnarvon’s Dorado and Pavo discoveries, along with the Company’s wider Bedout Sub-basin acreage, able to provide material supply and increase fuel security in the region in the future.
Dorado is a large field containing an estimated 160 million barrels of liquids and this expands to over 200 million barrels when taking into account the estimated 43-million-barrel resource at the nearby Pavo discovery.
Pavo could be tied back to the Dorado facilities at a relatively low cost, sustaining the production plateau at the Dorado facilities and thus continuing to achieve lowest quartile operating costs per barrel.
There’s also plenty of additional running room in the Bedout Sub-basin, with the top 20 exploration prospects, of the more than 100 Carnarvon Energy has identified across the Company’s four permits, estimated to hold a gross 1.5 billion barrels of oil equivalent.
Carnarvon continues to work with Dorado operator Santos to progress towards a final investment decision to help bolster supply to provide further energy security for the region amid tightening global supply and ongoing geopolitical tensions.