Energy in 2011 disruption and continuity

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1 June 212 bp.com/statisticalreview Energy in 211 disruption and continuity Paul Appleby, Head of Energy Economics

2 Outline A year of disruptions Energy and the economy Fuel by fuel Concluding remarks

3 Energy in 211 disruptions and continuity Supply disruptions Mtoe Arab Spring Fukushima Annual change, % 4% GDP and energy growth GDP Energy -2 3% -4 Coal Nuclear Gas Oil 2% -6 1% -8 Libya Syria/Yemen Japan Germany % Source: includes data from Oxford Economics

4 Energy prices $/boe Energy prices Oil Brent Gas Henry Hub Coal basket Şub-8 Mar-9 Nis-1 May-11 Haz price changes Annual change, % 4% 3% 2% 1% % -1% -2% Oil Brent Gas HH Coal basket Source: includes data from Platts and McCloskey

5 The economy Annual change, % Contribution to GDP growth Quarterly change, % annualised GDP growth 4% 3% Non-OECD OECD 8% 4% 2% % US Japan 1% -4% EU % % 1Q1 3Q1 1Q11 3Q11 1Q12 Source: includes data from Oxford Economics

6 GDP and energy growth Annual change, % Non-OECD Annual change, % OECD 8% GDP Energy 8% 6% 6% 4% 4% 2% 2% % % -2% % Source: includes data from Oxford Economics

7 Crude oil prices $/bbl 15 1 Dated Brent $/bbl Dated Brent WTI Dated Brent and WTI 5 Dated Brent Annual averages Jun-1 Dec-1 Jun-11 Dec-11 Jun-12 Source: includes data from Platts

8 Oil production growth in 211 Mb/d Decline Increase -1,5-1, -,5,,5 1, 1,5 Libya Non-OPEC OPEC UK Angola Azerbaijan Norway US Iraq Kuwait UAE Saudi Arabia

9 US supply US supply US rig counts Annual change, Kb/d Rigs Other NGLs GoM TX/ND* Net Oil Gas Q12 *Texas and North Dakota Oca-7 May-8 Eyl-9 Oca-11 May-12 Source: includes data from Energy Information Administration and Baker Hughes

10 Oil consumption growth in 211 Largest changes Regional growth by fuel type Kb/d Kb/d China Russia India Light distillate Middle distillate Saudi Arabia Iran Taiwan Germany US OECD Non-OECD -3-6 Non-OECD OECD

11 Limits to oil consumption growth Subsidised consumption Vehicle fuel economy % of global demand $/bbl Litres/1km for new sales 4% 3% Oil price (RHS) US* EU 2% 6 8 1% China Japan % Source: includes data from the International Council for Clean Transportation and the US Environmental Protection Agency * Includes light trucks

12 Oil consumption and production World liquids demand and supply OECD commercial oil stocks Mb/d Mbbls range 26-1 average Demand Supply Q1 2Q11 4Q11 2Q Mbbl SPR release Jan Mar May Jul Sep Nov Source: includes data from Energy Information Administration and Monthly Oil Data Services OECD/International Energy Agency June 212

13 Refining: spare capacity and utilisation Mb/d since 25 Cumulative spare capacity growth Refinery utilisation 6 4 Non-OECD OECD 89% 85% World OECD Non-OECD 2 81% % Source: includes data from Parpinelli Tecnon and Energy Security Analysis Inc.

14 Crude oil trade and refining margins European crude imports NW Europe cracking margins Mb/d $/bbl 1 8 S&C America Other FSU 6 4 Africa 4 2 Middle East Q 2Q 3Q 4Q Source: includes data from the International Energy Agency

15 Natural gas markets in 211 Annual change, Bcm Production and consumption growth $/Mmbtu Regional gas prices Middle East North America Other Asia Asia LNG Germany AGIP UK NBP US Henry Hub FSU Europe 5-5 Production Consumption Feb 1 Aug 1 Feb 11 Aug 11 Feb 12 Source: includes data from Platts

16 Global gas trade Gas exports LNG import growth in 211 Bcm Annual change, Bcm 15 Share of global consumption (RHS) 35% 3 1 3% 2 From Qatar 5 Pipeline 25% 1 From Atlantic Basin LNG % -1 To Asia To Europe Source: includes data from Cedigaz, GIIGNL, CISStats, Poten, Waterborne

17 Natural gas in Asia and Europe in 211 Annual change, Bcm Asia supply growth Europe supply and demand growth Annual change, Bcm LNG Pipeline Production From Russia From Libya Production Other net import China Japan Other Asia -45 Supply Demand Source: includes data from Cedigaz, GIIGNL, CISStats, Poten, Waterborne

18 US natural gas market Bcm Production Shale gas 35% 3% 25% 2% 15% Gas share in power generation % 26-1 range Jan Mar May Jul Sep Nov Source: includes data from Energy Information Administration

19 Coal growth in 211 Mtoe Largest changes in production Mtoe Largest changes in consumption China 158 China 163 Indonesia 26 India 25 Colombia 7 Australia 6 Russia 6 Spain 5 Ukraine 5 Canada -2 US 5 Japan -6 Australia -5 US -24

20 Coal prices and trade $/tonne Steam coal prices Annual change, Mtoe Import growth in China Qinhuangdao (fob) Japan Index (cif) NW Europe (cif) US CAPP (fob) 3 2 From Indonesia From Russia From US From Colombia From other 6 Oca-1 Tem-1 Oca-11 Tem-11 Oca-12 Source: includes data from McCloskey, Eurostat, IHS CERA -1 To Asia* *China, India, Japan, South Korea, Hong Kong, Taiwan To Europe

21 Nuclear, hydro and other renewables in power Annual change, TWh 2 Output changes in 211 Shares of world power generation 2% 1 Brazil 15% -1 Other Japan US China EU Other OECD 1% 5% Nuclear Hydro Renewables -2 Germany Nuclear Hydro Renewables %

22 Impact of oil prices on the economy 211 net oil import bill Net oil imports % GDP Mb/d 8% 6% Oil import bill Exports to oil producers Net cost % 8 EU China 2% 4 US India % US EU China India Source: includes data from the International Monetary Fund

23 Long-term trends Shares of world primary energy Trillion bbls Oil and gas reserves Tcm 5% 4% 3% Oil Coal Gas 2, 1,6 1,2 Other North America FSU OPEC % Hydro,8 1 1% Nuclear,4 5 % Renew.,

24 Conclusion 211: supply response, inter-fuel substitution, trade optimisation Key: flexible markets Lessons: diversity of supply, global integration

25 June 212 bp.com/statisticalreview Energy in 211 disruption and continuity