WORLD GAS SITUATION

Dr. Helmy Sayyouh

Petroleum Engineering

Cairo University

Introduction

Current world gas reserves, production and consumption situation is highlighted.

The world's proved oil reserves continue to be dominated by the Middle East, which holds more than 65% of the total. Whereas, the Former Soviet Union and the Middle East hold, respectively 39 and 34 the world's natural gas reserves.

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World Population (billions of persons)

1* Energy (1*)

Year/Categories industrial others

populatio

n

consumptio

n

1* 2* % of total % of Total

1950 0.55 2.5 18% 65

1995 0.8 5.3 13% 60

2000 (forecast) 0.825 6 12% 57

2045 (forecast) 0.8 10 7% < 50

1* Industrial nations 2* Other

nations

Notes

* Industrial countries have been consuming more energy than their share in the

total population

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Share of Energy Sources (percentage)

world-

wide Egypt*

Source 1900 1973 1998 1998

coal 96.3 28 26 2.5

oil + gas 3.7 67 54.6 94.8

gas - 18 23.6 27.2

oil - 49 41 67.6

hydraulic NA 4 2 2.7

nuclear - 1 7 nil

solar and

renewable - - 0.4 nil

* In Egypt, the role of energy sources other than oil and gas are

almost absent.

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Definitions

North America: USA ,Canada and Mexico.

Latin America: Caribbean, Central and South America.

OPEC members: Middle East: Iran, Iraq, Kuwait, Qatar, Saudi Arabia, United Arab Emirates (Abu Dhabi, Dubai and Northern Emirates i.e. Ras-Al -Khaimah and Sharjah).

North Africa: Algeria, Libya.

West Africa: Gabon, Nigeria

South East Asia: Indonesia.

Latin America: Venezuela, Ecuador.

OECD Europe: European Members of OECD.

Non-OECD Europe: Albania, Bulgaria, Czech Republic and Slovakia, Hungary, Poland, Romania, Former Soviet Union (including Russian Federation, Ukraine, Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan), Yugoslavia and Former Yugoslav Republics, Cyprus, Gibraltar and Malta.

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Definitions

Middle East: Arabian Peninsula, Iran, Iraq, Israel, Jordan, Lebanon, Syria

North Africa: Territories of the north coast of Africa from Egypt to Western Sahara.

West Africa: Territories on the West Coast of Africa from Mauritania to Angola, including Cape Verde Islands.

East and Southern Africa: Territories on the east coast of Africa from Sudan to Republic of South Africa, Also Namibia, Malawi, Zambia, Zimbabwe, Uganda, Madagascar

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Definitions

Asia: Brunei, Cambodia, China, Hong Kong, Indonesia, Japan, Laos, Malaysia, Mongolia, North Korea, Philippines, Singapore, South Asia (Afghanistan, Bangladesh, India, South Korea, Taiwan, Thailand, Vietnam, Papua New Guinea and the South West Pacific Islands

Australasia: Australia, New Zealand

OECD members: Europe: Austria, Belgium, Denmark, Finland France, Germany, Greece, Iceland, Republic of Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom.

Other member countries: Australia, Canada, Japan, New Zealand, USA.

European Union members: Belgium, Denmark, France, Germany, Greece, Republic of Ireland, Italy, Luxembourg, Netherlands, Spain, Portugal, U.K.

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Definitions

Oil and Gas Proved Reserves are those quantities which geological and engineering information indicate with reasonable certainty and can be recovered in the future from known reservoirs under existing economic and operating conditions.

Oil and Gas Probable Reserves are those quantities which are most likely to be recovered (than not) under specified economic conditions. Factors defining uncertainty are likely to be resolved within ten years.

Oil and Gas Possible Reserves are those quantities which are to be recovered with a low degree of certainty, less certain than probable, under specified economic conditions.

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If the reserves remaining at the end of any year are divided by the production in that year, the result is the time that those remaining reserves would last if production were to continue at the current level.

The world oil R/P ratio rose sharply in the late 1980s. This was due to increases in Middle Eastern reserves, which outpaced the steady growth in production.

Gas R/P ratios are higher than those for oil in all regions.

World production has almost tripled since 1966, but since that time new discoveries and increased estimates of existing reserves have tended to increase even faster.

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Oil and Gas Reserves/Production (R/P) Ratio.

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Gas Reserves to Production Ratio

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World Proved Gas Reserves

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World Gas Production/Consumption

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World Gas Prices

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Natural Gas Accumulations

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Shale Gas Resource Base

Unconventional Gas Production◦ Tight Gas

◦ Coalbed Methane

◦ Shale Gas

◦ “Unconventional gas production is forecast to increase from 42 percent of total US gas production in 2007 to 64 percent in 2020.” – API

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Defining Unconventional Shale

USGS Characterization of Unconventional Shales

Regional extent

No obvious seal or trap

Absence of a well-defined gas-water contact

Extremely low matrix permeability

Natural fracturing

Relatively low estimated ultimate recovery (EUR)

Well economics dependent on completion type

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Adsorbed Gas / Free Gas – Top Plays

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Natural Gas Proved Reserves

Country Billions of cubic meters

1/1/1980 1/1/1990 1/1/1998

Romania 125 133 -

New Zealand 173 139 -

Slovak, Republic - 15 -

Russia 30500 52000 47100

Iran 10613 17000 24000

Qatar - - 8500

Bulgaria - - 7000

USA 5636 4732 4735

Venezuela 1290 2993 4117

Algeria 3190 3250 3025

Indonesia 830 2577 2954

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Norway 1314 2295 2560

Australia 847 2130 2360

Malaysia 1135 1614 2260

Netherlands 1578 1725 1870

Canada 2492 2732 1809

China 735 1000 1350

Egypt 113 351 1250

Ukraine - - 1100

Great Britain 740 560 760

Argentina 641 670 684

India 340 1100 660

Pakistan 425 650 613

Thailand 320 229 349

Bangladesh 286 725 301

Italy 175 317 265

Germany 265 350 235

Brazil 53 116 160

Poland 120 168 145

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Denmark 139 134 120

Taiwan, China - 20 76

Tunisia 159 87 69

Chile - - 45

Japan 25 36 41

Hungry 126 123 40

Croatia - - 34

Austria 11 17 .5 24

France 82 37 14

Ireland 32 50 6

Spain 42 22 2

Czech Republic - - 1

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Undiscovered Natural Gas (mean value of estimates)

Region Undiscovered NG

trillion cubic

feet (tcf)

%

Africa 411.4 8

Asia 561.3 11

W Europe 260.5 5

Former Soviet

Union 2541 48

Mediterranean 346 7

North America 856.5 16

South America 291 6

Total 5267.7 100

* The undiscovered natural gas reserves are almost as much as the present

proved reserves.

* Distribution of the undiscovered reserves are not the same as the

proved reserves.

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Evolution of World Oil and Gas Consumption

Gas

Total

O&G

year Oil MMmto MMmto Mmmtoe

% of gas in

total

1900 21 na 21

1920 95 na 95

1939 286 na 286

1950 523 na 523

1960 1052 na 1052

1970 2336 880 3216 38

1973 2832 1100 3932 39

1990 3260 1771 5031 54

1993 3275 1845 5120 56

1998 3560 2016 5576 57

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In 1998, the LNG industry met just over 5% of world gas demand.

Exports from the Middle East and remained steady, while the Pacific Basin producers increased their output largely destined for South Korea. North African exports increase from Algeria was partially offset by a slight drop in sales from Libya.

Indonesia remained the world's largest producer of LNG, followed by Algeria, the two are the source of 50% of LNG movement. Imports into Europe represent 22% of the total market.

France, Belgium and Italy cut their LNG consumption in favor of piped gas.

Far Eastern LNG consumption is mainly in Japan and South Korea, with imports of 66 bcm in 1998.

Because of the availability of pipeline gas from Alaska, Canada and Mexico, the USA imports represent only 2% of the global LNG market.

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Liquefied Natural Gas

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Carbon Emission from Fossil Fuels per toe

Source Emissions

tons

carbon

Oil 0.82

Natural Gas 0.63

Coal 1.05

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Sectarian Use of Natural Gas in Egypt

%, 1998 Mmtoe

Electricity 62.2 6.585

Fertilizers 12.4 1.313

Industrial 23.3 2.467

Domestic 2.1 0.222

Total gas

consumption 100 10.587

Total hydrocarbon

Consumption 33.8

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Number of Egypt's Gas wells

Exploration/

Dry

Producing/Develo

pment

Western Desert &

Delta 81 50

Mediterranean 168 41

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