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WORLDENERGYINVESTMENTOUTLOOK
Increase in World Energy Production and Consumption
Almost all the increase in production occurs outside the OECD, compared with 60% in 1971-2000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Production Consumption Production Consumption
Mto
e
OECD Transition economies Developing countries
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Production Consumption Production Consumption
Mto
e
OECD Transition economies Developing countries
Global Investment Global Investment OutlookOutlook
World Energy Investment 2001-2030
Production accounts for the majority of investment in the supply chain – except for electricity
Total investment: 16 trillion dollars
Oil 19%
Electricity60%
Coal 2%Gas 19%
OtherRefining
E&D 72%
13%15%Other
Refining
E&D 72%
13%15%
E&D
LNG Chain
T&D and Storage
55%
37%
8%
E&D
LNG Chain
T&D and Storage
55%
37%
8%
Power generation
T&D54%
46% Power generation
T&D54%
46%
Mining
Shipping and ports
12%
88% Mining
Shipping and ports
12%
88%
Energy Investment by Region 2001-2030
Almost half global energy investment will be needed in developing countries
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
OECD
North
America
China OECD
Europe
Other Asia Africa Russia Middle East OECD
Pacific
Other Latin
America
India Other
transition
economies
Brazil
cum
ulat
ive
inve
stm
ent (
billi
on d
olla
rs)
0
5
10
15
20 share in global investment (%
)
Energy Investment by Fuel 2001-2030
Electricity sector absorbs most energy investment & the oil and gas industry almost all the rest
0
2,000
4,000
6,000
8,000
10,000
12,000
OECD Non-OECD
billi
on d
olla
rs
Electricity Gas Oil Coal
2%14%
23%
62%
2%
20%
17%
61%
Fuel Share in Energy Investment Requirements
2001-2030
Electricity sector dominates investment in most regions, but oil and gas absorb the lion’s share in Russia and Middle east
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Middle East
Russia
Africa
Other transition economies
Latin America
OECD
Other Asia
China
India
Electricity Oil Gas Coal
Financing IssuesFinancing Issues
Energy Investment Share in GDP 2001-2030
The share of energy investment in the economy is much higher in developing countries and the transition economies than in the OECD
0 1 2 3 4 5 6
OECD
Latin America
Other Asia
India
China
Middle East
Other transition economies
Africa
Russia
per cent
World average
Energy Investment & Domestic Savings
Domestic savings are easily large enough to cover energy financing needs in all regions, but only by a factor of two in Africa
0 5 10 15 20 25 30 35 40
OECD
Latin America
Other Asia
India
China
Middle East
Other transition economies
Africa
Russia
per cent of GDP
Energy investment Domestic savings
Domestic Savings & Investment 2000
Russia has a large surplus of capital, while Africa and Latin America have big deficits
0 5 10 15 20 25 30 35 40
Africa
Other Latin America
Other transition economies
Other Asia
Brazil
India
OECD
Middle East
Russia
China
per cent of GDPDomestic savings Domestic investment
Return on Energy Investment1993-2002
Higher returns generally in non-OECD countries reflect higher risks – but not the case for electricity
0
2
4
6
8
10
12
14
16
Oil and gas upstream Electricity Gas downstream
per c
ent
OECD Non-OECD
Oil Investment OutlookOil Investment Outlook
Oil Investment by Region
Most investment outside the OECD will be needed in the Middle East and the transition economies – mainly in the upstream
0 5 10 15 20 25 30 35
OECD
Middle East
Transition economies
Africa
Latin America
Asia
billion dollars per year
Exploration & development Non-conventional oil Refineries
Indicative Oil Development Costs & Proven Reserves by Region
Development costs are lowest in the Middle East – which holds most of the world’s remaining reserves
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
0 200 400 600 800 1,000
proven reserves (billion barrels)
dolla
rs p
er b
/d o
f cap
acity
Middle East
Afr
ica
Tra
nsiti
on e
cono
mie
s
Asi
a
Latin
Am
eric
a
OE
CD
Oil Production and Capacity Additions
The bulk of additions to crude oil production capacity will be needed simply to maintain capacity
0
50
100
150
200
250
2000 2030 2001-2030
mb/
d
Production Expansion to meet demand growth Replacement to maintain capacity
Gas-to-Liquids Investment 2001-2030
GTL investment takes off in the second decade, with the Middle East attracting the largest share
0
2
4
6
8
10
12
14
OECD Pacific OECD NorthAmerica
Latin America Africa East Asia Middle East
billi
on d
olla
rs
2001-2010 2011-2020 2021-2030
Refining Investment by Region2001-2030
Asia and the Middle East will absorb most refining investment, mainly for new refinery construction
0
20
40
60
80
100
120
140
Asia Middle East OECD NorthAmerica
Africa LatinAmerica
Transitioneconomies
OECDPacific
OECDEurope
billi
on d
olla
rs
Major World Oil Trade Movements 2002 & 2030 (mb/d)
The Middle East will account for the bulk of increased exports, much of it to Asia-Pacific
Access to Oil Reserves
Access to much of the world’s remaining oil reserves is restricted
National companies only (Saudi Arabia,
Kuwait, Mexico)35%
Limited access - National
companies 22%
Production sharing
12%
Concession21%
Iraq10%
1,032 billion barrels
Middle East Oil Investment
Middle East oil investment needs – mainly upstream – grow rapidly over the projection period
0
200
400
600
Total
billi
on d
olla
rs
Exploration & development Refining
2001-2010 2011-2020 2021-2030 2001-2030
0
200
400
600
Total
billi
on d
olla
rs
Exploration & development Refining
2001-2010 2011-2020 2021-2030 2001-2030
Middle East Oil Production & Capacity Additions
The Middle East will need to add almost 80mb/d of cumulative capacity – mainly to replace depleted wells and to meet export demand
0
10
20
30
40
50
60
70
80
90
1990 2000 2010 2020 2030 2001-2030
mb/
d
Production for domestic market Production for export Capacity additions
Saudi Arabia Budget Surplus & Crude Oil Prices
Saudi Arabia currently needs an oil price (WTI) of at least $25 to balance its budget
-15
-10
-5
0
5
10
15
1998 1999 2000 2001 2002 2003*
billi
on d
olla
rs
0
10
20
30
40
50
dollars per barrel
Budget Price (right axis)
Iraq Oil Investment Scenarios
Iraq will need to invest around $5 billion to raise oil production capacity to almost 4mb/d by 2010 in the Reference Scenario
0
10
20
30
40
50
60
2 3 4 5 6 7 8 9 10
production (mb/d)
cum
ulat
ive
inve
stm
ent
(bill
ion
dolla
rs)
Restoration of production capacity Slow production expansion
Reference Scenario Rapid production expansion
2010
2010
20202020
20202030
2030
2030
0
10
20
30
40
50
60
2 3 4 5 6 7 8 9 10
production (mb/d)
cum
ulat
ive
inve
stm
ent
(bill
ion
dolla
rs)
Restoration of production capacity Slow production expansion
Reference Scenario Rapid production expansion
2010
2010
20202020
20202030
2030
2030
2010
Upstream Investment Needs & Production in OPEC Middle East
OPEC Middle East oil production and investment surge in Reference Scenario due to region’s balancing role
0
10
20
30
40
50
60
2000 2010 2020 2030
pro
du
ctio
n (
mb
/d)
0
5
10
15
20
inv
es
tmen
t (billio
n d
olla
rs)
Average annual investment by decade (right axis) Production
OPEC Middle East Share in Global Oil Supply
OPEC Middle East’s share of global oil production is assumed to remain flat at under 30% in Restricted Investment Scenario
0
10
20
30
40
50
1970 1980 1990 2000 2010 2020 2030
per c
ent
Restricted Investment Scenario Reference Scenario
OPEC Revenues in Different Scenarios2001-2030
Oil revenues in OPEC Middle East producers are substantially lower in the Restricted Investment Scenario
6,000
8,000
10,000
12,000
OPEC OPEC Middle East
billi
on d
olla
rs
Reference Scenario Restricted Investment Scenario
Change in Investment Needs Restricted Investment vs Reference Scenario
Global oil investment rises in the Restricted Middle East Oil Investment Scenario – because development costs outside the region are higher
2021-2030
2011-2020
2001-2010
-120
-80
-40
0
40
80
120bi
llion
dol
lars
Middle East OPEC Other countries World
Natural Gas Investment Natural Gas Investment OutlookOutlook
Global Gas Investment
E&D will continue to account for most gas investment, but the share of LNG jumps in the current decade
0
20
40
60
80
100
120
140
1991-2000 2001-2010 2011-2020 2021-2030
billi
on d
olla
rs p
er y
ear
Exploration & development Transmission Distribution LNG Storage
Gas E&D Investment & Incremental Production
2001 - 2030
OECD countries will account for almost half total upstream gas investment, but only 10% of additional production
Middle East 8%
OECD48%
Othe20%
Transition economies
15%
Africa9%
Africa17%
Middle East23%
Other32%
OECD10%
Transition economies
18%
E&D Investment Incremental Production
$ 1.7 trillion 2,767 bcm
Middle East 8%
OECD48%
Othe20%
Transition economies
15%
Africa9%
Africa17%
Middle East23%
Other32%
OECD10%
Transition economies
18%
E&D Investment Incremental Production
$ 1.7 trillion 2,767 bcm
Oil & Gas Investment & Indexed Production
Investment in gas supply will increase faster than that in oil, and will be almost as big by the end of the projection period
0
10
20
30
40
50
60
70
80
90bi
llion
dol
lars
per
yea
r
0
50
100
150
200
250
production index (year 2000=100)
Oil investment Gas investmentOil production index Gas production index
2000 2001 - 2010 2011 - 2020 2021 - 2030
Indicative Gas E&D Costs and Proven Reserves by Region, 2002
The Middle East and transition economies have the lowest development costs and most remaining gas reserves
0.0
0.1
0.2
0.3
0.4
0 20 40 60 80 100 120 140 160
proven gas reserves (tcm)
dolla
rs p
er c
m o
f cap
acity
Middle EastTransition economies
Afr
ica
La
tin
Am
eri
ca
Asi
a
OE
CD
No
rth
Am
eri
ca
OE
CD
Eu
rop
e
0.0
0.1
0.2
0.3
0.4
0 20 40 60 80 100 120 140 160
proven gas reserves (tcm)
dolla
rs p
er c
m o
f cap
acity
Middle EastTransition economies
Afr
ica
La
tin
Am
eri
ca
Asi
a
OE
CD
No
rth
Am
eri
ca
OE
CD
Eu
rop
e
Annual Gas Capacity Additions
The bulk of new capacity additions will increasingly be needed simply to replace exhausted wells
0
100
200
300
400
2001-2010 2011-2020 2021-2030
bcm
Expansion to meet demand growth Replacement
Net Inter-regional Trade & Production
A growing share of gas will be traded between regions, much of it in the form of LNG
0
600
1,200
1,800
2,400
3,000
3,600
4,200
4,800
5,400
2001 2010 2020 2030
bcm
Production LNG trade Pipeline trade
Liquefaction & Regasification Capacity
Regasification capacity will grow less rapidly than liquefaction as spare capacity declines – especially in Japan
0
100
200
300
400
500
600
700
800
900
1,000
2001 2010 2020 2030 2001 2010 2020 2030
mill
ion
tonn
es
Asia - exporters Africa Middle EastRussia Latin America OECD EuropeJapan Other Asia - importers OECD North America
Liquefaction Regasification
0
100
200
300
400
500
600
700
800
900
1,000
2001 2010 2020 2030 2001 2010 2020 2030
mill
ion
tonn
es
Asia - exporters Africa Middle EastRussia Latin America OECD EuropeJapan Other Asia - importers OECD North America
Liquefaction Regasification
LNG Shipping Fleet
A 6-fold increase in LNG trade between 2002 and 2030 will call for massive investment in new carriers
0
50
100
150
200
250
300
350
400
in operation (2001) additions 2002-2030
num
ber o
f shi
ps
Liquefaction project developers LNG buyersOil & gas companies Ship ownersProjected
On orderin 2001}On orderin 2001}
Length of Transmission Pipelines
North America, which already has the largest transmission system in the world, will expand its system the most…
0
200
400
600
800
NorthAmerica
Transitioneconomies
OECDEurope
Asia Middle East LatinAmerica
Africa OECDPacific
thou
sand
km
Installed transmission pipelines (2000) Pipeline additions (2001-2030)
Length of Distribution Networks
…and its distribution networks too
0
500
1,000
1,500
2,000
2,500
3,000
NorthAmerica
OECDEurope
Transitioneconomies
Asia LatinAmerica
Middle East OECDPacific
Africa
thou
sand
km
Installed distribution pipelines (2000) Pipeline additions (2001-2030)
Indicative LNG Unit Capital Cost
The recent dramatic fall in LNG costs is expected to continue
0
100
200
300
400
500
600
700
Mid-1990s 2002 2010 2030
dolla
rs p
er to
nne
of c
apac
ity
Liquefaction Shipping Regasification
Levelised Cost of LNG Imports into US Gulf Coast
Lower capital costs are making LNG imports more economic – and more competitive with domestic supply projects
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Trinidad Nigeria Venezuela Egypt Qatar
$/M
Btu
Upstream Liquefaction Shipping Regasification
Henry-Hub average price, 1998-2002
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Trinidad Nigeria Venezuela Egypt Qatar
$/M
Btu
Upstream Liquefaction Shipping Regasification
Henry-Hub average price, 1998-2002
Coal Investment Coal Investment OutlookOutlook
Coal Industry Investment 2001-2030
Almost all coal investment will be for mining – a third of it in China alone
OtherDeveloping countries
$70
Transition economies
$32
China $121
OECD $128
Ports $13
Shipping $34
Mining $351
Mining by region
Total investment: $ 398 billion
Coal Mining Investment2001-2030
Most mining expansions will occur in China and other Asian countries
0
20
40
60
80
100
120
140
China OECDNorth
America
OECDPacific
OECDEurope
India Africa Othertransition
economies
Russia Indonesia LatinAmerica
Other
billi
on d
olla
rs
Mining - expansion Mining - replacement Sustaining
Mining Investment by Type and Region 2001-2030
The share of sustaining investment is highest in OECD countries
sustaining33%
new capacity67%
sustaining32%
new capacity68%
sustaining35%
new capacity65%
sustaining54%
new capacity46%
Other Developing countries
20.0%
China34.4%
OECD36.5%
Transition economies
9.1%
Coal Production by Region
China’s share of global production will grow most rapidly
2030 6954 Mt
EU 153%
Other OECD Europe
5%
OECD North America
19%China33%
Indonesia4%
India9%
Africa6%
OECD Pacific8%
Other2%
Russia4%
Other transition
economies5%
Latin America2%
2000 4595 Mt
EU 157%
Other OECD Europe
7%
OECD North America
23%
OECD Pacific7%
Other3%
Russia5%
Other transition
economies6%
Latin America1%
China27%
Indonesia2%
India7%
Africa5%
2030 6954 Mt
EU 153%
Other OECD Europe
5%
OECD North America
19%China33%
Indonesia4%
India9%
Africa6%
OECD Pacific8%
Other2%
Russia4%
Other transition
economies5%
Latin America2%
2000 4595 Mt
EU 157%
Other OECD Europe
7%
OECD North America
23%
OECD Pacific7%
Other3%
Russia5%
Other transition
economies6%
Latin America1%
China27%
Indonesia2%
India7%
Africa5%
Additional Coal Mining Capacity 2001-2030
The share of sustaining investment is highest in OECD countries
0
500
1,000
1,500
2,000
2,500
China OECDNorth
America
India OECDPacific
OECDEurope
Africa Othertransition
economies
Indonesia Russia LatinAmerica
Other
Mt o
f Cap
acity
Expansion to meet demand growth Replacement
Weighted Average Productivity, Coal Price, and Investment Costs
0
2
4
6
8
10
12
1980-1985 1985-1990 1990-1995 1995-1999 1999-2003
prod
uctiv
ity (1
,000
t / m
iner
-yea
r)
0
10
20
30
40
50
60
70
80
dollars per tonne
Productivity Investment costSteam coal export price
Main Inter-Regional Coal Exports 2000 (Mtce)
Australia is by far the world’s biggest exporter…
… and will remain so in 2030
Main Inter-Regional Coal Exports 2030 (Mtce)
Global Coal Investment & Production Reference and Alternative Policy Scenarios
Lower coal production worldwide and lower OECD imports yield a 6% reduction in global coal investment
-20
0
20
40
60
80
100
120
140
160bi
llion
dol
lars
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
million tonnes
Investment -Reference Investment - Alternative
Investment - difference Production - Reference (right axis)Production - Alternative (right axis)
-7.5%
2001-2010 2011-2020 2021-2030
Electricity Sector Electricity Sector Investment OutlookInvestment Outlook
Electricity Sector Investment by Region 2001-2030
China will need more electricity investment than any other country or region
0
500
1,000
1,500
2,000
2,500
China Other
Asia
Latin
America
Africa Middle
East
US and
Canada
European
Union
OECD
Pacific
Other
OECD
Russia Rest of
TE
billi
on d
olla
rs
0
500
1,000
1,500
2,000
2,500
China Other
Asia
Latin
America
Africa Middle
East
US and
Canada
European
Union
OECD
Pacific
Other
OECD
Russia Rest of
TE
billi
on d
olla
rs
Electricity Investment as Share of GDP
Medium-term electricity sector investment needs will increase relative to GDP in almost all non-OECD regions
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
OECD China India Indonesia Russia Brazil Africa
1991-2000 2001-2010
OECD Power Sector Investment
Power generation will absorb a growing share of OECD electricity-sector investment
0
200
400
600
800
1,000
1,200
1,400
1,600
2001-2010 2011-2020 2021-2030
billi
on d
olla
rs
Power generation (new and refurbishment) Transmission Distribution
OECD Electricity Sector Investment Relative to GDP
Electricity sector investment relative to GDP has risen in the US – bucking the trend in most other OECD countries
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
0.9%
1.0%
Greece Canada Japan US Portugal Ireland Sweden Spain Italy UK Netherlands Germany
1995 2000
Average Age of OECD Power Plants2003
Most fossil-fuel power stations in North America and Europe are more than 20 years old
0
200
400
600
800
1,000
<20 years >20 years
GW
Fossil Nuclear
OECD Investment in Alternative and Reference Scenarios
Transmission and distribution investments are much lower in Alternative Scenario, but generation investment hardly falls...
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Reference Alternative
billi
on d
olla
rs
Generation Transmission Distribution
Share of Renewables in Electricity Generation
…because the share of non-hydro renewables, which are more capital-intensive, rises, offsetting the reduction in electricity demand
0%
5%
10%
15%
20%
25%
30%
2000 2030 Reference 2030 Alternative
Non-Hydro Hydro
Power Sector Investment in Developing Countries
Investment in developing countries should rise over time but there is no guarantee that it will be forthcoming
0
500
1,000
1,500
2,000
2,500
2001-2010 2011-2020 2021-2030
billi
on d
olla
rs
Power generation (new and refurbishment) Transmission Distribution
Power Generation Capacity Additions in Developing Countries
1971-2000
Developing countries will need to add increasing amounts of new generating capacity over the next three decades
0
200
400
600
800
1,000
1,200
1971-1980 1981-1990 1991-2000 2001-2010 2011-2020 2021-2030
GW
Power Sector Private Investment in Developing Countries
Developing countries will need to reverse the slump in private capital flows if projected investment is to be forthcoming
0
5
10
15
20
25
30
35
40
45
50
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
billi
on d
olla
rs
Investment to Ensure Universal Electricity Access
2001-2030
More than $660 billion is needed to supply basic electricity services to the world’s very poor – mainly in Africa and South Asia
0
500
1,000
1,500
2,000
China South Asia Africa East Asia LatinAmerica
MiddleEast
billi
on d
olla
rs
Reference Scenario Electrification Scenario
15%
36%49%
Additional investment breakdown
Grid extension
Isolated
Mini-grid
0
500
1,000
1,500
2,000
China South Asia Africa East Asia LatinAmerica
MiddleEast
billi
on d
olla
rs
Reference Scenario Electrification Scenario
15%
36%49%
Additional investment breakdown
Grid extension
Isolated
Mini-grid
15%
36%49%
Additional investment breakdown
Grid extension
Isolated
Mini-grid
Additional investment breakdown
Grid extension
Isolated
Mini-grid
Additional Power Generation Electrification Scenario in 2030
Power supply grows most rapidly in Africa in the Electrification Scenario with universal access to electricity services
0
50
100
150
200
250
300
350
400
450
500
Africa South Asia East Asia Latin America Middle East
TWh
Grid extension - urban Grid Extension - RuralMini-grid Autonomous off-grid
Additional Investment in Electrification Scenario
2001-2030
Most investment needed for grid extensions – which will be more easily financed than mini-grid and off-grid options
0
50
100
150
200
250
300
Africa South Asia East Asia Latin America Middle East
billi
on d
olla
rs
Grid extension Mini-grid Autonomous off-grid
