13 47 749294 BPStatisticalReviewofWorldEnergy-Brussels September2008

7/28/2019 13 47 749294 BPStatisticalReviewofWorldEnergy-Brussels September2008

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BP 2008

BP Statistical Reviewof World Energy

An Update: The Long Termand the Short Term

Christof RhlChief Economist

Brussels, September, 2008


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BP Statistical Review of World Energy 2008 BP 2008

Outline

Introduction

High Energy PricesThe Long Term and the Short Term

The Oil Market

Other Fuels

Conclusion


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Energy Consumption and Energy Prices

Oil Gas Coal

y-o-y

-4%

-2%

0%

2%

4%

6%

8%

98 00 02 04 06 08

0

20

40

60

80

100

120

$/bbl $/Mmbtu

98 00 02 04 06 08

0

20

40

60

80

100

120

$/t

98 00 02 04 06 08

0

2

4

6

8

10

12


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Real Commodity Prices

0

50

100

150

200

250

300

350

400

1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Oil Wheat Iron & SteelIndex: average 1970-2008 = 100


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GDP and Primary Energy Growth

2000s

0%

1%

2%

3%

4%

5%

6%

7%

1967 1969 1971 1973

Growth1970s

2001 2003 2005 2007

Primary energy GDP (PPP)


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Contributions to Growth

0%

1%

2%

3%

4%

1991 1995 1999 2003 2007

OECD Non-OECD

5-year moving average

1991 1995 1999 2003 2007

OECD Non-OECD

Primary energyGDP


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Power Generation and Primary Energy

0%

1%

2%

3%

4%

5%

6%

7%

1991-2000 2001-2007

OECD Non-OECD

Average growth p.a.

Power generation

0%

1%

2%

3%

4%

5%

6%

7%

Power

Generation

Primary

Energy

GDP

10-year average

2007 global growth


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Economic Growth and Oil ConsumptionGrowth

0%

20%

40%

60%

80%

100%

1990-2000 2000-2007

Share of growth

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1990-2000 2000-2007

Mb/d

Average annual growth of oil production and consumption

Contribution to GDP growth Oil Consumption growth

OECD

Non-OECD

OECD

OECDOECD

Non-OECD

Non-OECDNon-OECD


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Turn of the Commodity Price Cycle?

Dec Feb Apr Jun Aug

0

50

100

150

200

250

300

350

2000 2003 2006

Baltic Dry Freight Rates

GSCI wheat index

Iron ore & steel scrap HWWI index

Brent

Index: Average for 2000-08 = 100

2008

100 = average for 2000-08


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The Oil Market


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Real and Nominal Crude Oil Price

0

20

40

60

80

100

120

140

1973 1978 1983 1988 1993 1998 2003 2008

Nominal price Real price$/bbl

$ 106.74 per barrel in December 1979 $ 98.46 per barrel in Sep 2008


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Global Oil Demand Growth Has Slowed

Kb/d

Exporters and importers

Heavy

subsidies

Moderate

subsidies

Moderate

taxes

Heavy

taxes

10-year average

Taxes and subsidies

-600

-400

-200

0

200

400

600

800

1000

Oil

exporters

Non-OECD

oil

importers

OECD oil

importers


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And Remains Price Sensitive

-500

-400

-300

-200

-100

0

100

Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08

2.00

2.40

2.80

3.20

3.60

4.00

4.40

$/gallonKb/d

Pump price

US Gasoline Consumption Growth

Source: EIA


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Recap: Supply Management 2007

OECD

OPEC-10

Other

OPEC

FSUROW

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Growth Decline

Mb/d

OECD

OPEC-10

Other

OPEC

FSU

ROW

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Growth Decline

Mb/d

Average annual change, 2003-2007 Change 2007


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And OECD Commercial Inventories 2007

2300

2400

2500

2600

2700

2800

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2002-2006 range Stocks in 2007 Brent oil price (rhs)

50

60

70

80

90

100

Mbbls $/bbl

Sources: IEA, Platts


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2007 Oil Production: Largest Changes

Non-OPEC

FSU

OPEC

Kb/dDecrease Increase

Norway

Mexico

Venezuela

Nigeria

Canada

Sudan

Iraq

Russia

AzerbaijanAngola

Saudi Arabia

-500 -400 -300 -200 -100 0 100 200 300 400


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Production Increase in Saudi Arabia

Call on OPEC-10 Crude

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Jan-05 Jan-06 Jan-07 Jan-08

0

20

40

60

80

100

120

140Saudi Arabia Other OPEC-10

Y-o-Y Change, Mb/d

OPEC-10 Crude Production

Oil price (rhs)

25

26

27

28

2006 2007 2008 2009

Mb/d


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... And What a Difference a Year Makes

2300

2400

2500

2600

2700

2800

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Range 03-07 2007 2008 and forecastMbbls

B t Ri k i t th D id Gl b l D d


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But Risk is to the Downside: Global DemandGrowth

0%

2%

4%

6%

8%

10%

-800

-600

-400

-200

0

200

400

600

Kb/d

GDP Oil consumption

y-o-y growth

Base case (2.1%)

Low-growth case (1.5%)

US

Europe

Japan China

ME

S&C Am.

World

US

Europe

Japan China

ME

S&C Am.

World


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Project Delays Continue to Mount

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2007 2008 2009 2010 2011 2012

2006 Assessment

2007 Assessment

2008 Assessment

0

2

4

6

8

10

12

14

2003 2006 2009 2012

Production with OriginalStart Dates

Currently ExpectedProduction

Mb/d Mb/d


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Russian Oil Production

0%

2%

4%

6%

8%

10%

12%

2001 2003 2005 2007

y-o-y growth

2005 2006 2007 2008

9.2

9.4

9.6

9.8

10.0

Mb/d

Source: Russian Ministry of Industry and Energy


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2007 Refining Capacity Additions

0 200 400 600 800 1000 1200 1400

World Av. 2002-2005

World 2007

N.America

S. & Cent. America

Europe & Eurasia

Middle East

Africa

China

Asia Pacific ex China

Kb/d


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Financial Investment in Energy

-300

-225

-150

-75

0

75

150

Jan-07 Sep-07 May-08

30

60

90

120

150

180


WTI

Heating Oil

Henry Hub

Non-commercial net length

$/boe

0.0

0.5

1.0

1.5

2.0

2.5

3.0


Open interestEnergy prices

000 contracts Million contracts

Sources: CFTC, Platts


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Other Fossil Fuels


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2007 Natural Gas: Largest Changes

Production Consumption

-10 0 10 20 30 40

US

China

Qatar

Nigeria

Turkmenistan

Azerbaijan

Russia

Canada

UK

Billion m3 Billion m3

-10 0 10 20 30 40

US

China

Russia

Japan

Turkey

Chile

Germany


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2007 LNG Market Diversification

Number of export markets Number of suppliers

0 2 4 6 8 10 12

Algeria

Trinidad

Egypt

Nigeria

Qatar

Oman

Australia

Malaysia

UAE

Eq. Guinea

Indonesia

Norway

Brunei

0 2 4 6 8 10 12

Japan

outh Korea

Taiwan

Spain

India

US

France

Turkey

UK

China

Mexico

Belgium

Greece

S

Atlantic Basin

Middle East

Pacific Basin

Source: Cedigaz

F l S i hi i P G i


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Fuel Switching in Power Generation 2005-07

20%

30%

40%

50%

60%

70%

-60 -40 -20 0 20

75%

80%

85%

90%

95%

100%

-6 -3 0 3 6

Gas competitiveness vs. resid ($/Mmbtu)

Gas Share US gas vs. oilUK gas vs. coal

Gas is not competitive Gas iscompetitive

Gas is not competitive Gas iscompetitive

Gas competitiveness vs. coal (/MWh)

Sources: EIA, BERR, Platts, McCloskey, ECX

2007 C l P d i d C i


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2007 Coal Production and Consumption

17%60%

3%

1%

19%20%

2%

5%

14%59%Europe& Eurasia

Consumption

S & Cent.

America

Africa

North AmericaAsia Pacific

Europe& Eurasia

Production

S & Cent.

America

Africa

North AmericaAsia Pacific

C l P d ti O t id Chi


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Coal Production Outside China

Biggest coal producers Largest production growth, 1998-2007

0

100

200

300

400

500

600

US

Austr

alia

India

South

Afric

a

Russia

Ind

onesia

Mtoe

0

10

20

30

40

50

60

70

80

Indon

esia

Austr

alia

India

Russia

South

Afric

a

Colom

bia

Mtoe

12.3%

3.8%

3.7%

3.1%

2%8.3%

Average annual growth

GDP d P G ti


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GDP and Power Generation

Growth in China, 2003-2007 Global breakdown

Average growth p.a.

0%

4%

8%

12%

16%

20%

GDP PowerPrimary energy Coal

0%

20%

40%

60%

80%

100%

GDP Power Coal

Share

China

OECD

Othernon-

OECD

India

Oth F l


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Other Fuels

Global Oil Reserves


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Global Oil Reserves

0

400

800

1200

1600

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

Middle East S. & Cent. AmericaEurope & Eurasia Africa

North America Asia Pacific

Other oil sands

Billion bbls

2007 Carbon Emissions Growth


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2007 Carbon Emissions Growth

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

World Europe FSU North

America

Middle

East

S. &

Cent.

America

Africa Asia

Pacific

10-year averagey-o-y growth

Changes in Nuclear and Hydroelectric Output


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Changes in Nuclear and Hydroelectric Output

Nuclear Hydro

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

2004 2005 2006 2007 2004 2005 2006 2007

10-year average

y-o-y growth

Contribution to Electricity Generation Growth


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from Renewables*

0%

4%

8%

12%

16%

2004 2005 2006 2007

World OECD

Share of electricity generation growth, 3-year moving average

* Wind, photovoltaics and geothermal

Renewables


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Renewables

Electricity generation in Germany Volume of ethanol in US gasoline

0

10

20

30

40

50

60

70

2001 2003 2005 2007

HydroOther renewables

TWh

0%

1%

2%

3%

4%

5%

2001 2003 2005 2007

0

100

200

300

400

500Share (lhs)

Kb/dShare

Ethanol

consumption (rhs)

Sources: BDEW, EIA

Conclusion


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Conclusion

High economic growth and improvements inenergy intensity

The long tern: Importance of developingworld

Oil market constrained, gas marketintegrating, global coal market emerging

Volatility will increase - prices are effective,

where allowed to work

Documents

13 47 749294 BPStatisticalReviewofWorldEnergy-Brussels September2008