Shale oil could slash crude price by 40%

Updated 14 February 2013
0

Shale oil could slash crude price by 40%

LONDON: Worldwide shale oil production could add $ 2.7 trillion to the global economy annually by 2035 by slashing the price of crude by as much as $ 50 a barrel, PricewaterhouseCoopers said.
The extra supply could push global oil prices down by up to 40 percent, it said.
Shale oil production could surge to 14 million barrels per day, or as much as 12 percent of total oil output from around 1 percent now, as it expands from its US base over the next two decades, the world’s largest accounting firm said in a report.
That could lift global gross domestic product by between 2.3 percent and 3.7 percent per year by 2035, according to the report, “Shale oil: the next energy revolution”.
“Lower global oil prices due to increased shale oil supply could have a major impact on the future evolution of the world economy by allowing more output to be produced at the same cost,” John Hawksworth, chief economist at PwC and co-author of the report, said.
Bigger flows of shale oil will not increase overall consumption substantially, because demand is not heavily dependent on price, but it will cut the cost of fuel, Adam Lyons, director of PwC’s oil and gas strategy team, said.
“One effect will be to cut the need for expensive, environmentally destructive extraction techniques like the Arctic and tar sands,” he added.
The rapid growth in shale oil has not been factored into price projections by the two major international oil agencies — the US Energy Information Administration (EIA) and Paris-based International Energy Agency, the report said.
Current global oil demand amounts to 80-90 million barrels per day (bpd), and the agencies estimate it will increase to around 110 million bpd by 2035.
“Their projections ... are arguably conservative as they are based only on resources about which there is already a high degree of certainty,” the report said.
“Past experience of shale oil and shale gas suggests that these resource estimates are likely to be revised upwards significantly over time.”
If the Organization of Petroleum Exporting Countries cuts production in response to the extra supply, oil prices will fall to around $100 per barrel in today’s money by 2035, the report said.
If OPEC does not cut production, oil could fall to around $ 83 per barrel in today’s money by 2035, PwC estimated, or $ 50 less than the EIA’s 2035 real-terms forecast price of $133.
Brent crude oil is currently trading around $119 per barrel.
Lower oil prices will feed into stronger GDP growth, adding $1.7-$2.7 trillion per year, or $230-$370 per person, PwC said.
The level of support will vary greatly, however, from country to country, it said.
“Large net oil importers such as India and Japan may see their GDP boosted by around 4 to7 percent by 2035 in our alternative scenarios, while the US, China, Germany and the UK might gain by around 2 to 5 percent of GDP,” Hawksworth said.


Toyota captures data goldmine in $1 billion Grab bet

Updated 6 min 11 sec ago
0

Toyota captures data goldmine in $1 billion Grab bet

  • Grab already monitors driving behavior through its app to increase ride safety, sending emails about speed and braking, for instance, to its drivers
  • Toyota and Grab will be able to use the data for possible collaboration on data-driven services such as vehicle diagnostics and customized insurance plans based on driver usage
TOKYO/SINGAPORE: By pumping $1 billion into ride-hailing firm Grab, Toyota Motor stands to gain a passenger-side view of tens of thousands of cars across Southeast Asia, tracking how fast they drive, how far they travel and the time they spend stuck in traffic.
The Japanese automaker said it aims to install its TransLog driving recorder devices into Grab’s fleet of lease cars to access the data on driving patterns that will be crucial to its push into the nascent mobility-as-a-service industry.
“Only ride-hailing companies have good, extensive data on usage, so automakers want to be connected with that,” said Egil Juliussen, director of research for automotive infotainment and advanced driver assistance systems at IHS Markit.
Grab already monitors driving behavior through its app to increase ride safety, sending emails about speed and braking, for instance, to its drivers, such as Singapore’s Rennu MaHajjan.
“With this system, it keeps me in check,” said MaHajjan, 57.
It will get even more vehicle data with Toyota, which has been harvesting data through TransLog since 2016 in sales and trials with taxi firms and car-hailing operators including Grab. The data gives Toyota insight into fleet management as it develops services including futuristic concepts such as pay-per-use mobile restaurants.
The latest deal, announced last week, gives Toyota access to a single pool of vehicles which potentially eclipses all others. That will allow it to capture a volume of data that would be difficult to collect from private cars which are only used for under 5 percent of any given day, often on routine commutes.
In return, Grab will be able to expand services such as food delivery and digital payments using Toyota’s $1 billion investment — the biggest by a traditional automaker in a ride-sharing app maker.
The deal reflects how automakers are clamoring for access to ride-hailing firms’ extensive user bases through a spate of partnerships, as they compete with technology companies to develop autonomous cars and next-generation transport services.
Toyota’s vision of such services includes convoys of shuttle bus-sized, self-driving multi-purpose vehicles used, for instance, as pay-per-use mobile restaurants and hotels, which the automaker plans to develop and customize for retail customers.
“There’s data about the car, and then there’s also data about the service — how many customers drivers have, what’s the average mileage, where the rides are concentrated,” said Juliussen. “Having that picture in all the major (Southeast Asian) cities, that becomes very valuable.”
Toyota and Grab will be able to use the data for possible collaboration on data-driven services such as vehicle diagnostics and customized insurance plans based on driver usage.
The data will also help Grab maintain efficiency in fleet maintenance as it expands deeper into Southeast Asia where it operates in over 200 cities. It has said it wants build the region’s largest car rental fleet by the fourth quarter of 2018.
“Vehicle maintenance costs, insurance costs, these are bread-and-butter issues for ride-hailing drivers,” said Chua Kee Lock, chief executive of Vertex Venture Holdings in Singapore, an early Grab investor.
Industry experts said Toyota could expand its data service to more mobility firms such as Didi Chuxing, Uber Technologies Inc. and Amazon.com Inc, with which it has separate partnerships.
“This partnership with Toyota will keep Grab’s platform ‘sticky’ and give drivers less incentive to switch to competitors,” said Chua. “This is Grab’s edge over the long-run.”