The IEF Charter & Energy Security

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1 International Energy Forum The IEF Charter & Energy Security Noé van Hulst, Secretary General, International Energy Forum (IEF)

Dialogue Covers key producing, consuming and transit countries

2 International Energy Forum IEF covers key consuming & including those outside IEA and OPEC Neutral Facilitator of Global Energy Dialogue Covers key producing, consuming and transit countries including those outside IEA and OPEC Around 90% of Global Oil & Gas Supply and Demand

3 Fresh IEF Charter Signed by 86 countries at Extraordinary IEF Ministerial Meeting (22 February 2011) Includes all major energy producers and consumers Reinforces commitment (producers / consumers / transit) Procedure for Extraordinary Ministerial Meeting

4 Fundamental Aims - IEF Foster greater mutual understanding & awareness of common interests Promote stable and transparent energy markets, security of supply & demand Identify & promote principles / guidelines enhancing energy market transparency, stability & sustainability Narrow differences among producing / consuming / transit countries Build confidence and trust through improved information sharing Promote study & exchange of views on energy-relevant issues Facilitate collection / compilation / dissemination of relevant data, information and analyses

5 Key Results from IEF12 Cancun, March 2010 Investment Transparency Sustainability Platforms for Dialogue 3 rd Workshop on Asian 2 nd IEF IGU Ministerial 2 nd CCS Symposium Energy Outlook (Jun 2010) Gas Forum (Nov 2010) (May 2010) 4 th Asian Ministerial Energy Energy Efficiency Roundtable Symposium (June 2011) (Apr 2011) 2 nd NOC IOC Forum 2 nd Energy Poverty (Apr 2011) Symposium (H2 2011) Approval of IEF Charter Ministerial Meeting (Feb 2011) Research & Analysis IEA / IEF / OPEC Workshop on Financial and Physical Markets (Nov 2010) IEA / IEF / OPEC Forum of Regulators Meeting (Nov 2010) IEA / IEF / OPEC Symposium on Energy Outlooks (Jan 2011) Data Transparency (JODI) Assess Extension to Annual Data (Fall 2009) JODI Internship (Jun 2010) JODI Training Workshop (L. America Jul 2010) JODI Gas Symposium (Oct 2010) 8 th JODI Conference (Fall 2011) Input to IEF13 Ministerial in Kuwait, 2012

6 Main Global Energy Trends The IEF Consensus World Energy Demand Grows Significantly Fossil Fuels Dominate the Energy Mix Increasing Interdependence

7 Oil Reserves & Production Middle East (Reserves at end 2009, Production for 2009) Rank Country Reserves (Gbbl) Production (Mbd) World Saudi Arabia Iran Iraq Source: BP Statistical Review Middle East Volume Share Reserves Gbbl 57 % Production 24.4 Mbd 30% Rank Imports from the Middle East Volume (Mbd) Share 1 Asia % 2 Europe % 3 USA %

8 Gas Reserves & Production Middle East (Reserves at end 2009, Production for 2009) Rank Country Reserves (tcm) Production (bcm) World Russia Iran Qatar Middle East Volume Share (%) Reserves 76.2 tcm 41 % Production bcm 14 % Source: BP Statistical Review

9 Mitigating Energy Market Volatility IEA / IEF / OPEC cooperation Shared analysis of future trends Linkages - physical and financial markets Enhancing data transparency (oil, gas, investment) Strong support from G20

10 Shared Analysis of Energy Market Trends and Outlook 2011 Oil Markets: Consensus on comfortable demand / supply balance / high spare capacity Medium-term: Long-term: Need for: Reduce uncertainty to facilitate investment Consensus ample availability of oil resources Harmonisation of definitions and better explanation of divergences to market Annual Symposium on Outlooks

11 Significant Flexibility in Oil System 2011 is not 2008 IEA * OPEC* 2011 Change 2011 Change World Oil Demand mb/d World Oil Supply mb/d Implied OPEC Spare Capacity mb/d OECD Commercial Oil Stocks mb days days IEA Emergency Stocks 1.55 bn Libyan Oil Exports (Temp. loss) mb/d 1.0 Japanese Extra Oil Demand (Temp.) mb/d 0.15 * Based on April 2011 Oil Market Reports IEA / OPEC

12 Remember the History 10 major oil supply disruptions ( ) < 60 days in 55 years (0.3%) Average gross peak supply loss: 3.1 m/bd Average duration of supply disruption: 4.8 months Other producing countries often stepped in to compensate losses Higher oil prices do impact oil demand (even with lower elasticities) Spending of oil revenues significantly higher than in the past

Gas Market Flexibility Excess Gas Supply Capacity: Around 170 bcm in 2010 (IEA WEO

Other countries, Germany: industry expects extra gas demand Libya gas exports loss

4 bcm largely compensated by other producers Natural gas inventories across Europe

13 Gas Market Flexibility Excess Gas Supply Capacity: Around 170 bcm in 2010 (IEA WEO 2010) Japan extra gas demand max bcm, extra LNG shipments already en route Other countries, Germany: industry expects extra gas demand Libya gas exports loss max 10.4 bcm largely compensated by other producers Natural gas inventories across Europe are comfortable Continued strong demand growth in Asia e.g. CNPC projects doubling Chinese gas consumption by 2015 around 230 bcm Spot prices rising e.g. TTF +17% since January Excess gas supply capacity may diminish faster than projected in the medium term and don t forget coal: extra demand from Japan, coal prices up.

Linkages between Physical and Financial Markets

of demand growth, Evolving short-term price inelasticity

Fundamentals vs financials Consensus: Greater

international co-ordination of regulation Continue

14 Linkages between Physical and Financial Markets Emergence of oil as an asset class; Shift of the centre of demand growth, Evolving short-term price inelasticity of supply and demand; Wide divergence of views: Fundamentals vs financials Consensus: Greater transparency (oil inventories, OTC) Need for strong international co-ordination of regulation Continue horizontal dialogue between physical / financial oil markets Plan next meeting in fall 2011

15 Number of countries with smiley face Enhancing Data Transparency Report to G20 Finance Ministers (April 2011) Oil spot market prices - assessment by oil price reporting agencies Report to G20 Finance Ministers (October 2011) Price volatility of oil / gas / coal Joint Organisations Data Initiative (Jodi) Performance JAN-JUN 2007 JUL-DEC 2007 JAN-JUN 2008 JUL-DEC 2008 JAN-JUN 2009 JUL-DEC 2009 JAN-JUN 2010 JUL-DEC 2010 Submission Timeliness Completeness

Improving the Quality of Report to IEF Ministers & G20 Finance Ministers (April 2011) Jodi Organisations: New tools / practices, enhance interaction with data users Training

16 Improving the Quality of Report to IEF Ministers & G20 Finance Ministers (April 2011) Jodi Organisations: New tools / practices, enhance interaction with data users Training Statisticians, upgrade website / database Countries: Energy data offices better equipped / staffed Appropriate regulation and tackle confidentiality Target: 3 Smiley Faces before year-end 2011

17 Extension of to Gas and Annual Investment Data Monthly gas data Launch before end 2011 supply, demand, stocks Cooperation with all relevant organisations (including GECF) Annual data, start with First results in 2012 capacity expansion, upstream / downstream critical for demand / supply balance medium - term

trillion up to 2035) Innovative long-term partnerships based on trust

18 NOC IOC Cooperation 2 nd NOC IOC Forum (Total / Saudi Aramco, April 2011) Easternization of Energy Demand Huge investment challenge (nearly $33 trillion up to 2035) Innovative long-term partnerships based on trust General principles or best practices as a tool role for IEF Industry Advisory Committee

19 Energy Efficiency IEF as a platform to engage developing countries Discuss policies, share best practices G20: Tackle inefficient fossil fuel subsidies IEF Symposium June 2011(Jakarta)

20 Energy Poverty Lack of access is inhibiting development Fighting energy poverty 9 th MDG New impetus 2012 Year of Sustainable Energy for All (UN) IEF Symposium H2 2011

21 The Way Forward Strengthen IEF s neutral facilitator role Deliver results for IEF13 (Kuwait 2012) & G20 on: Transparency(Jodi-Oil/Gas/Investment) Investment (NOC-IOC, Jodi Investment) Sustainability (Energy Efficiency, Energy Poverty)

Oil and Gas Markets. Recent Developments. Noé van Hulst, Secretary General, International Energy Forum (IEF)

Oil and Gas Markets. Recent Developments. Noé van Hulst, Secretary General, International Energy Forum (IEF) International Energy Forum Oil and Gas Markets Recent Developments Noé van Hulst, Secretary General, International Energy Forum (IEF) Fresh IEF Charter Signed by 86 countries at Extraordinary IEF Ministerial