Professional Documents
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London, Dusseldorf
November 2012
Briefing Document
DRAFT
This document is confidential and is intended solely for the use and information of the client to whom it is addressed.
Energy developments in US are profound and their effect will be felt well beyond North America and the energy sector. Recent rebound in US oil and gas production, driven by upstream technologies that are unlocking light tight oil and shale gas resources, is spurring economic activity with less expensive gas and electricity prices giving industry a competitive edge and steadily changing the role of North America in global energy trade. By around 2020, the United States is projected to become the largest global oil producer (overtaking Saudi Arabia until the mid-2020s) and starts to see the impact of new fuel-efficiency measures in transport. The result is a continued fall in US oil imports
Source: IEA World Energy Outlook 2012
Booz & Company DATE IEA WEO 2012_summary slides.ppt Prepared for client name
Selected slides
Gas and renewables will have the higher growth rates in global energy demand and fossil fuels will still dominate in 2035
World Primary Energy Demand by Fuel
1990 2035 New Policies Scenario Million toe
18,000 16,000 14,000 12,000
1.6% CAGR 2010 2035 7.7% 1.6% 2.0% 1.9%
10,000 8,000
0.5%
1990
2010
2015
Bioenergy
2020
Hydro
2030
Nuclear
2035
Gas Oil Coal
24% Gas
27% Oil
Other renewables
Source: IEA World Energy Outlook 2012; Booz & Company analysis
Booz & Company IEA WEO 2012_summary slides.ppt Prepared for client name
The non OECD countries and especially Asia will be the drivers of energy demand growth
World Primary Energy Demand by Region
Million toe
18,000 16,000 14,000
Americas
Europe
OECD
Asia
NON OECD
Middle East
2,000 0
Africa
Latin America 1990 2000 2010 2015 2020 2030 2035
Source: IEA World Energy Outlook 2012; Booz & Company analysis
Booz & Company IEA WEO 2012_summary slides.ppt Prepared for client name
Some US$19 trillion will need to be invested in oil and gas infrastructure and particularly in upstream
Cumulative Investment in Oil Infrastructure
2012 - 2035
Average capex spend of US$614bn/y. Required to increase capacity to meet higher demand & higher capital cost of new sources of supply (deep water and unconventional)
Other
9%
24%
Source: IEA World Energy Outlook 2012; Booz & Company analysis
Booz & Company IEA WEO 2012_summary slides.ppt Prepared for client name
Global oil demand is forecast to grow at 0.6% CAGR between 2011 and 2035 to reach ~100m bbls/d
World Oil Demand
Million bbls/d
100 90 80 70 60 50
Americas
Europe Asia Oceania E.Europe / Eurasia Asia
OECD
40 30
NON OECD
Middle East
20 10 0
Africa Latin America Bunkers 1990 2011 2015 2020 2025 2030 2035
Source: IEA World Energy Outlook 2012; Booz & Company analysis
Booz & Company IEA WEO 2012_summary slides.ppt Prepared for client name
Globally there are some 6 trillion bbls of recoverable oil reserves (between conventional and unconventional)
Remaining Technically Recoverable Oil Resources
Conventional & End 2011 (Bn bbls)
84%
Crude Oil
Total = 2,678bn bbls
Note: EHOB = extra-heavy oil and bitumen Source: IEA World Energy Outlook 2012; Booz & Company analysis
Booz & Company IEA WEO 2012_summary slides.ppt Prepared for client name
With its large reserves of extra heavy oil in the Orinoco belt, Venezuela has now surpassed Saudi Arabia
Proven Oil Reserves in Top 10 Countries
0 50 100
200
250
300 Bn bbls
Proven Reserves
Years 0
Booz & Company
50
IEA WEO 2012_summary slides.ppt
100
Prepared for client name
150
200
250
300
Source: BP Statistical Review of World Energy 2012; OPEC; IEA World Energy Outlook 2012; Booz & Company analysis
Going forward the contribution of unconventionals to global oil supply will be modest
World Oil Supply by Type
Million bbls/d
100 90 80 70 60 50 40 30 20 10 0
CONVENTIONAL UNCONVENTIONAL
1990
Coal-to-liquids
2011
Gas-to-liquids
2015
Venezuela extra-heavy oil
2020
Light tight oil
2025
Canada oil sands
2030
2035
Crude oil
Source: IEA World Energy Outlook 2012; Booz & Company analysis
Booz & Company IEA WEO 2012_summary slides.ppt Prepared for client name
US and Brazil will become major oil producers outside of OPEC while Iraq will demonstrate greatest growth in OPEC
Non-OPEC Oil Production
Million bbls/d
35 30 25 20 15 10 5 0
1990
2011
2015
Brazil
2020
Canada
2025
2030
2035
1990
Libya
2011
2015
2020
Iran
2025
Iraq
2030
2035
Kazakhstan
United States
Venezuela
Saudi Arabia
Source: IEA World Energy Outlook 2012; Booz & Company analysis
Booz & Company IEA WEO 2012_summary slides.ppt Prepared for client name
however, it is the impact of shale gas revolution on US which is reshaping the global energy landscape
Shale gas revolution is boosting tight oil production with US becoming leading oil producer
000s bbls/d
12,000 11,000 10,000 9,000 8,000 7,000 6,000 1960
US Oil Production
1965 - 2011 11,000
US forecast to hit 11m bbls/d by 2020
Production growth stimulating US economic activity. Rising employment in extractive sector (growing at 6% CAGR between 2005 and 2012)
US benefiting from advantage of lower energy prices and feedstock prices which is boosting capital investment, particularly in chemicals (Shell looking to build ethane cracker in Pennsylvania) However, there are concerns around: Sustainability of this growth. Environmental impact of fracking and weaker oil prices could impact production economics US foreign policy role in Middle East given its growing energy independence. Will China step into breach as US extricates itself?
Booz & Company DATE IEA WEO 2012_summary slides.ppt Prepared for client name
1970
1980
1990
2000
2010
2020
2008
2000
2001
2002
2003
2004
2005
2006
2007
2009
2010
Source: IEA World Energy Outlook 2012; Bureau of Labor Statistics; BP Statistical review; Booz & Company analysis
2012 11
2011
According to an IEA survey, leading companies are broadly expected to increase upstream capex in 2012
Upstream Oil and Gas Investment by Company
US$bn
40 35 30 25 20
2011 (US$bn)
Worldwide upstream oil and gas investment is budgeted to rise by around 8% in 2012 reaching a new record of $619 billion
15 10 5 0
2012 (US$bn)
Occidental
BG Group
Rosneft
Exxon Mobil
Petrochina
CNOOC
Gazprom
Chevron
Petrobras
Source: IEA World Energy Outlook 2012; Booz & Company analysis
Booz & Company IEA WEO 2012_summary slides.ppt Prepared for client name
ConocoPhillips
Sinopec
Apache
Shell
Pemex
Statoil
Eni
BP
Suncor
Total
Lukoil