EIA forecasts non-OPEC countries other than the United States and Russia to add 0.9 million b/d of liquid fuels supply in 2022 and 0.8 million b/d in 2023

In our June 2022 Short-Term Energy Outlook (STEO), we forecast that total non-OPEC petroleum production will increase by 1.9 million barrels per day (b/d) in 2022 and 1.4 million b/d in 2023, compared with an increase of 0.8 million b/d in 2021. Although about 60% of growth in non-OPEC petroleum production will be driven by the United States (Figure 1), whose production increases by 1.3 million b/d in 2022 and by 1.4 million b/d in 2023, we expect that a number of other non-OPEC producers will also increase production. These producers include Canada, Brazil, Norway, and China. These increases will offset expected declines in Russia’s production of 0.4 million b/d in 2022 and 0.9 million b/d in 2023. We forecast that total non-OPEC petroleum production will average 65.8 million b/d in 2022 and 67.1 million b/d in 2023, compared with 63.9 million b/d in 2021.

Other than the United States, Brazil has the largest expected liquid fuels production increase of the other non-OPEC countries by the end of 2023 (Figure 2). Our forecast assumes that production from six new floating production storage and offloading (FPSO) units will ramp up through 2023 and continue to drive growth, notably at the Sepia, Mero, and Buzios fields. Once they reach full capacity, these FPSOs will each produce between 70,000 b/d and 180,000 b/d of liquid fuels. We expect Brazil’s production to increase from 3.7 million b/d in 2021 to 3.9 million b/d in 2022 and 4.1 million b/d in 2023.

We also forecast that liquid fuels production in Canada will increase by nearly 400,000 b/d, from 5.5 million b/d in 2021 to 5.9 million b/d by 2023. Canada’s growth is driven primarily by oil sands expansion and debottlenecking projects in 2022 and 2023 following the expansion of the Enbridge Line 3 crude oil pipeline (with a capacity of 760,000 b/d), which became operational in October 2021. The TransMountain pipeline expansion project (with a capacity of 890,000 b/d) is slated to enter service at the end of 2022. Additional Enbridge expansions and optimizations to its existing pipeline system, if completed, will add more than 400,000 b/d of export capacity over the forecast period. Due to this new pipeline capacity from Enbridge and other planned pipeline expansions, currently identifiable constraints on oil exports from Canada will be lessened by the end of 2023.

We forecast that liquid fuels production in Norway will remain mostly flat in 2022, but we expect it to increase by 0.3 million b/d in 2023 in large part because of the completion of phase 2 of the Johan Sverdrup expansion project. The first phase of production came online in October 2019, producing 511,000 b/d of crude oil on average in 2021, with maximum production rates at 538,000 b/d as of February 2022. The second phase is scheduled to come online in the fourth quarter of 2022, and the combined production of both phases is expected to reach 720,000 b/d at full capacity (60,000 b/d more than originally expected). As a result, we expect that liquid fuels production in Norway will increase from an average of just over 2.0 million b/d in 2021 to 2.3 million b/d by 2023. Since June 2020, tax stimulus programs for the oil and natural gas sector enacted by the Norwegian Parliament have accelerated activity for new plans for development and operation around existing oil infrastructure, which has the potential to further expand Norwegian oil production capacity after 2023.

The remaining key sources of forecast non-OPEC production growth come from China, Argentina, and Guyana. After increasing by 130,000 b/d in 2021, we forecast production in China to grow by an additional 170,000 b/d in 2022 and 80,000 b/d in 2023 in response to government calls for increased exploration and production. Production of liquid fuels in Argentina grew by nearly 50,000 b/d in 2021, and we expect further growth of 70,000 b/d in 2022 and 40,000 b/d in 2023, driven by increased deployment of hydraulic fracturing activity into the Vaca Muerta shale oil formation.

We expect that Guyana will be a source of liquid fuels production growth in 2022 and 2023, driven by new offshore oil resources such as the Liza oil field. Guyana began producing oil in December 2019. Crude oil production in Guyana increased to an average of 75,000 b/d in 2020 and 110,000 b/d in 2021 as operations ramped up at the Liza field, and expansions to the Liza project and the development of new offshore oil formations have gotten underway. We expect the second phase of expansions to oil production at the Liza field, begun in February 2022, to ramp up throughout the year and add 220,000 b/d of oil production by the end of 2022. As a result, we expect oil production in Guyana to increase from an average of 110,000 b/d in 2021 to 211,000 b/d in 2022 and 340,000 b/d in 2023.

For questions about This Week in Petroleum, contact the Petroleum and Liquid Fuels Markets Team at 202-586-5840.