RIO DE JANEIRO—The impact of political unrest in key petroleum-producing nations and the growth in light, tight shale oil production in the U.S. on global petroleum supplies were two of the primary talking points of a presentation delivered Sept. 16 at Rio Oil & Gas 2014. Another would be that deepwater developments are key to growth in global capacity.

Antoine Halff, head of the International Energy Agency (IEA) oil and industry markets group, delivered the talk as a part of the agency’s Global Dialogue on Pre-Salt Innovation workshop held at the Rio conference. He provided his group’s short-term outlook or “best guess” on the direction it sees the market taking over the next five years.

According to Halff, global oil supply capacity growth in the next five years will be about 5 MMbbl/d and that non-OPEC countries will be key contributors. “Most of this growth in our forecast is led by one country which is the United States,” he said, adding that the continued production of the U.S. light, tight shale oil will drive the increased supply and will contribute about one-third of the forecast.

Production from OPEC countries accounts for about 20% of the growth but it is a high-risk growth, Halff cautioned.

Production will reach 37 MMbbl/d by 2019 with Iraq contributing to approximately 60% of the growth, with the forecast showing most of the growth coming from the southern region of the country. Worsening political stability and security issues, however, add a significant downside risk in both Iraq and Libya, he said.

The development of natural gas—particularly NGLs — are forecasted to lift supply growth, with a majority of the lift being provided by Iran, he continued.

In non-OPEC countries, supply is forecasted to grow from 6.2 MMbbl/d in 2014 to 60.9 MMbbl/d in 2019, he said.

North America will continue to lead in supply growth before diversifying later in the period as the surge in U.S. production is forecasted to decline near the end of the decade. Canadian growth is attributed to its oil sands and Mexican production numbers are forecasted to increase by 2018. “Mexico is the story for the next decade,” he said. “The reform will not immediately have an impact on production.”

For Brazil, a “significant turnaround is in sight” as his group sees significant growth with an approximate 160,000 bbl/d increase on average expected, due mostly to Santos Basin projects coming online. This forecast echoes the one made by ANP director general Magda Chambriard during the opening session of Rio Oil & Gas 2014 on Sept. 15 when she declared that Brazil will be an oil exporter by 2018.

Deepwater developments are seen as a key to overall growth in global capacity, Halff said. The greatest growth in output is expected to occur in water depths between the 1,500 m to 2,250 m (4,921 ft to 7,381 ft). Primary contributors to this growth include Brazil, the U.S. Gulf of Mexico, Angola and Nigeria. Mexico is seen as a primary contributor after 2019.

The Global Dialogue on Pre-Salt Innovation workshop was held under the IEA’s Gas and Oil Technologies Implementing Agreement (GOT IA). Created in 2013, the goal of the GOT IA is to create a global dialogue encouraging the development of advanced technology and the policy and regulatory drivers that allow for its use and that through the dialogue, the major challenges facing the oil and gas industry will be addressed and resolved, according to the organization’s website. More information on October workshops on offshore and unconventional markets is available at www.gotia.org.

Contact the author, Jennifer Presley, at jpresley@hartenergy.com.