January 18, 2023


Upstream Tracker: Americas Leads World in New Oil Capacity

  • New global crude oil capacity will average 2.7 million b/d over the next five years, an updated study by Energy Intelligence shows.
  • Some 68% of the new oil production capacity in 2023-27 will come from countries not aligned with the Opec-plus alliance.
  • North and South America are poised to be the leaders in terms of new oil, with the two continents accounting for 54% of new capacity coming online over the period.

Updates to Energy Intelligence’s Upstream Tracker database over the past half-year have resulted in a slightly rosier outlook for new oil additions. New capacity over the five-year horizon has increased by 200,000 b/d to 2.7 million b/d.

As with the previous assessment, we see nearly 70% of new oil production during this period originating in non-Opec-plus, which last year accounted for 44% of the 76.25 million b/d of crude produced globally.

On a regional basis, South America will be the star performer, accounting for 30% of new oil in 2023-27, or 800,000 b/d, followed by North America with nearly 25%, or 650,000 b/d.

Unimpressive Opec-Plus

This year new oil capacity will amount to 2.6 million b/d — with 80% of that originating with non-Opec-plus producers — and new oil over the five years will peak in 2024 at 3.5 million b/d.

Importantly, Opec-plus will see its peak of new capacity roll-outs, assessed at 1.6 million b/d, in 2024, but producers outside the alliance are still expected to surpass this by bringing on line 2 million b/d the same year.

After welcoming 1.1 million b/d of new capacity in 2025, Opec-plus will experience a sharp decline in 2026, when only 350,000 b/d of fresh capacity are expected.

By contrast, non-Opec-plus countries will launch 1.9 million b/d of new oil in 2026, or more than five-fold what Opec-plus will manage the same year.

Crucially, this survey only looks at crude oil. Production of natural gas liquids (NGLs) is expected to grow considerably over the next five years as well. This is especially the case in the US, where NGL output is seen growing at 525,000 b/d in 2023 and 425,000 b/d in 2024 alone. These liquids will be predominantly used as heating and cooking fuel, as well as feedstock for the petrochemical industry, while crude oil remains the traditional feedstock for refineries.

Created with Highcharts 9.0.0('000 b/d)PROJECTED OIL CAPACITY ADDITIONS — OPEC-PLUS VS. NON-OPEC-PLUSOpec-PlusNon-Opec-Plus2023202420252026202701,0002,0003,0004,000Upstream Oil Projects Tracker. Source: Company reports, Energy Intelligence estimates

New World Shines

Together North and South America will bring an average 1.35 million b/d of new crude oil production capacity online over the next five years — or 55% of all new oil additions, according to Energy Intelligence’s database.

South America, led by Brazil, is on the cusp of becoming the global leader in new oil. The continent will account for 30% of all new production capacity in 2023-27, or 800,000 b/d over the period, with the peak occurring in 2026 when it is expected to launch an approximate 1.1 million b/d in new capacity.

Excluding NGLs, North America will not trail by much. Over the five years, the US and Canada will roll out nearly 650 million b/d of new capacity, peaking at 1 million b/d in 2024. New oil additions will slowly decline afterward, sinking to a mere 140,000 b/d in 2027.

Mexico will bring an average 10,000 b/d of new oil on line from now until 2027, our assessment shows.

The Middle East comes in third regionally and will boost new capacity by 600,000 b/d over the five years under review. The peak will be in 2024, at 1 million b/d. However, compared to North America, the region is forecast to sustain a more balanced rollout of new oil additions and in 2027 will manage to ratchet up capacity by 700,000 b/d, or five times more than in North America.

Created with Highcharts 9.0.0('000 b/d)PROJECTED OIL CAPACITY ADDITIONS — BY REGIONAfricaAsiaEuropeFSULatin AmericaMiddle EastNorth AmericaOceania2023202420252026202701,0002,0003,0004,000Upstream Oil Projects Tracker. Source: Company reports, Energy Intelligence estimates

Busy Brazil

The US and Brazil are virtually tied in terms of new oil capacity over the next five years.

Our assessment of new oilfield projects shows that the US will boost production capacity by 604,000 b/d in 2023-27, while Brazil is poised to average 594,000 b/d of new oil during the period.

In the US, we see 325,000 b/d, or 54%, of new capacity will originate in the prolific Permian basin, following by 210,000 b/d in the Gulf of Mexico.

Canada will only manage to boost new oil by an average 35,000 b/d and Mexico 10,000 b/d, according to Energy Intelligence’s current estimates.

Created with Highcharts 9.0.0('000 b/d)PROJECTED OIL CAPACITY ADDITIONS — NORTH AMERICACanadaMexicoUS GOMUS BakkenUS Eagle FordUS NiobraraUS Permian2023202420252026202702505007501,0001,250Upsream Oil Projects Tracker. Source: Company reports, Energy Intelligence estimates

Brazil’s oil perspectives, naturally, are anchored in pre-salt fields. The ultra-rich Buzios field alone will yield an average 260,000 b/d of new oil over the next five years, while other pre-salt plays such as Mero, Itapu and Bacalhau will give another 200,000 b/d.

Brazil’s peak year for new oil additions will be in 2025, when the country is set to launch 925,000 b/d.

Created with Highcharts 9.0.0('000 b/d)PROJECTED OIL CAPACITY ADDITIONS — BRAZILBuzios 6Buzios 10Buzios 9Bacalhau Phase 1Mero 2Mero 3Buzios 7Buzios 8Libra-Mero 4Buzios 5Itapu P-71Libra-Mero 1SEAP 1IPB Maria QuiteriaBuzios 11Others2023202420252026202702505007501,000Upstream Oil Projects Tracker. Source: Company reports, Energy Intelligence estimates

In Norway, new oil will peak this year at 225,000 b/d, thanks in large part to Johan Sverdrup Phase II, which is ramping up now, while in two years, the country should reach full capacity at the 200,000 b/d Johan Castberg. Interestingly, the country will not see any new oil additions in 2026, our assessment shows.

As a result, over the five years, Norway’s new capacity will average 112,000 b/d.

Guyana, for its part, is poised to outperform Norway. According to our updated study, the South American newcomer will boast an average 160,000 b/d of new oil over the five years. 2023 will be relatively quiet after the boom in new barrels last year, but starting next year the country will roll out 190,000 b/d in new capacity, and in 2026, growth of Guyana’s new capacity will peak at 260,000 b/d.

Created with Highcharts 9.0.0('000 b/d)PROJECT OIL CAPACITY ADDITIONS — NORWAYJohan Sverdrup Phase 2 recently went onstream in Dec 2022. Click hereJohan Sverdrup Phase 2Johan CastbergYggdrasilBreidablikk FieldMartin LingeAsgard B low-pressure projectYMEDuvaSolveigNjord FutureFenjaBalder X202220232024202520262027*0100200300Upstream Oil Projects Tracker. Source: Company reports, Energy Intelligence estimates; *Data in 2027 are through September

Gary Peach, New York