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Oil and Gas Security of Supply for Europe. Athens, 3 rd November, 2005. Agenda. Global Energy Demand Oil and Gas Resources EU Gas Issues Investment, Demand Growth and Spare Capacity Indigenous Production Technology Summary. Global energy demand - growth continues. - PowerPoint PPT Presentation
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International Association of Oil and Gas Producers
Oil and Gas Security of Supply for Europe
Athens, 3rd November, 2005
2
Agenda
Global Energy Demand
Oil and Gas Resources
EU Gas Issues
Investment, Demand Growthand Spare Capacity
Indigenous Production
Technology
Summary
3
Global energy demand - growth continues
0
10
20
30
40
50
60
80 90 00 10 20 30
0
50
100
150
200
250
300
350
400
80 90 00 10 20 30
1.71.7
1.41.4
2.22.2
1.51.5
1.21.2
0.80.8
2.12.1 9.59.5
1.51.5
2.72.7
2.22.2
1.01.0
1.51.5
5.95.9
2.22.2
Total Energy Other Energy Wind & Solar
HydroHydro
NuclearNuclear
Biomass,MSW
Biomass,MSW
Wind & SolarWind & Solar
OilOil
GasGas
CoalCoal
OtherOther
Growth Rate2003-2030, %Growth Rate2003-2030, %
SolarSolar
WindWind
MBDOE MBDOE MBDOE
Growth Rate1980-2003, %Growth Rate1980-2003, %
1.61.6 1.71.7
11.111.1
Source: ExxonMobil, 2004
Energy demand fuelled by economic and population growth
Fossil fuels will retain their market share
Renewables enjoy significant growth but remain marginal
Energy efficiency gains included in forecast
Energy price trends and developing countries’ demand remain uncertain
4
0
2
4
6
8
Conventional Oil Non-ConventionalOil
Conventional Gas Non-ConventionalGas
Gas Hydrates
... and large oil and gas resources exist
Trillion BarrelsOil Equivalent World Hydrocarbon Resources
Technically RecoverableAlready Produced
Source: IEA
5
...with substantial potential
Claude Mandil (IEA):
- “Quenching the world’s oil thirst …. is a major investment in modern technology.”
Source: IEA
Availability of oil resources as a function of economic price
6
Resources not a constraint
Oil resources
- Ample conventional resources exist
- Unconventional volumes untapped
Gas resources
- Significant upside to support growing demand
- Market incentives exist to develop remote resources
7
...with abundant gas reserves
Proven gas reserves
- 1984: 96 Tcm
- 1994: 143 Tcm
- 2004: 180 Tcm
Reserves-to-production ratio: 66.7 years
Highly concentrated
70–80% within economic reach of Europe
8% 4%4%
8%
36%
40%
Asia Pacific North America S. & Central America
Africa Europe & Eurasia Middle East
Technically recoverable conventional gas:~ 450 Tcm
8
Source : WoodMackenzie, Cedigaz, Total
550
650
2004 2010 20152004 2010 2015
40
100
715
140
... albeit from more distant sources
Europe*(EU34)
* EU25 + Bulg / Cro / Rom / Turk + Norw/Bos/Mac/Serb/Switz
255191 305
319 295 270Dom.Prod.
LNG Imports
Pipeline Imports
Demand
in Bcm
LNG
- Imports to triple
Pipeline gas
- Imports to grow by > 50%
Total imports by 2015:
- ~450 Bcm/y
Increased competition for supplies
9
... and Europe is well positioned
Nigeria LNG Algeria
Norway
LibyaEgypt
48 Tcm
30 Tcm
Qatar
IranIraq
Russia
Caspian9 Tcm
…but it needs
Supply diversification
Integration of gas networks
Dialogue with producing countries
Contractual flexibility
- Long term contracts
Regulatory stability
Improving market efficiency
- Interoperability
10
The development challenge
Resources + access + investment + technology + market + lead times ….
Production
11
Industry investment is increasing
Upstream investments
- Up nearly 60% since 1999
- In 2003 at $160 billion
Predictions for 2005
- $180 billion
Annual requirement to 2030
- $200 billion
Global Upstream Investment
Source : J.S Herold / Harrison Lovegrove
100
110
120
130
140
150
160
170
1999 2000 2001 2002 2003
$ B
illi
on
( m
on
ey
of
the
da
y)
0
10
20
30
40
50
60
$ p
er
ba
rre
l
Capex Oil Price
12
OPEC spare production capacity - historic lows
Source: DOE / EIA / BP
Recent oil price rise seems to reflect:
- Reduced spare capacity
- Risk premium
0
2
4
6
8
10
12
197019731976197919821985198819911994199720002003
Million Barrelsper Day
13
- 5.000 10.000 15.000 20.000
IndonesiaKuwaitNigeriaAlgeria
United Arab EmiratesVenezuela
ChinaMexico
IranCanada
EU and NorwaySaudi Arabia
USARussian Federation
Year 2004 production mboepd
Oil
Gas
European basin – a leading global producer
Source: BP Stat review 2004
5 10 15 20
Year 2004 Production Mboe per day
14
... with a major contribution to EU economy
Indigenous potential up to 100 billion boe
Supports European manufacturing and service Industry
Sustains employment
Contributes tax revenues
Facilitates access to global resources
15
... supported by new technologies
More oil becomes accessible
- Deep water
- Reservoirs with higher pressures
- Difficult geography
Recovery factor up
- Current average around 35%
- 1% increase = 1 year global energy consumption
17
...in summary
A shared challenge
18
Summary
Thank you for your attention!
19
-0,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0
1991-1999
Average
2000 2001 2002 2003 2004 2005 2006
Mill
ion
Ba
rre
ls p
er
Da
y
US China Other
... to meet oil demand growth
Forecast History
Source: EIA, Short-Term Energy Outlook, September 2005
20
0
5
10
15
20
25
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Mrd
. m
³
German Gas – Growing Reserves through Technology
21
0
5
10
15
20
25
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Mrd
. m
³
1971 (Mayer Gürr)
German Gas – Growing Reserves through Technology
22
0
5
10
15
20
25
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Mrd
. m³
1971 (Mayer Gürr)1986 (Lübben)
German Gas – Growing Reserves through Technology
23
0
5
10
15
20
25
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Mrd
. m³
1971 (Mayer Gürr)1986 (Lübben)
German Gas – Growing Reserves through Technology
3D seismic, sub salt imaging, horizontal drilling, sour gas processing ….
24
0
5
10
15
20
25
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Mrd
. m
³
1971 (Mayer Gürr)1986 (Lübben)Ausblick 2002
Outlook
German Gas – Growing Reserves through Technology
3D seismic, sub salt imaging, horizontal drilling, sour gas processing ….