Upstream /15/2009. Industry Outlook - Oil & Gas Demand/Supply. Required New Production. Production MOEBD. Frédéric Guinot.

Size: px

Start display at page:

Download "Upstream /15/2009. Industry Outlook - Oil & Gas Demand/Supply. Required New Production. Production MOEBD. Frédéric Guinot."

Ezra Holland
6 years ago
Views:

1 Oil and Gas Industry Upstream 29 Frédéric Guinot Swiss Section The Challenge MOEBD Industry Outlook - Oil & Gas Demand/Supply 2 World Demand Required New Production Equal to Today s Production Or Equivalent to 12 Saudi Arabias 4 Existing Field Decline ~ 4-6% Existing Production

2 World oil & gas reserves and production by company, 27 Proven reserves Production 3% 25% 25% 22% 12% Total NOCs 72% 9% 5% 6% 1% 13% 13% 9% 2% 2% 3% 5% 9% 36% Super majors Other private companies Saudi Aramco National Iranian Oil Company Pemex (Mexico) Iraqi oil companies Kuwait Petroleum Corporation Russian state controlled companies Other NOCs The national oil companies hold close to 3/4 of world proven reserves but only half of production, suggesting that their dominance will grow in the long term Foreign company access to proven oil reserves, end 27 Saudi Arabia Canada Iran Iraq Kuwait UAE Venezuela Russia Libya Nigeria Kazakhstan United States China Qatar Algeria Brazil Mexico Angola Azerbaijan Norway Billion barrels Inaccessible Restricted Accessible Access to reserves is either restricted or impossible in most of the leading reserves holders worldwide 2

3 World top 1 oil producers Impact of unconventional oil Venezuela BBO unconventional World top 1 oil producers Impact of unconventional oil Venezuela BBO unconventional 3

Conventional Cumulative Production @ End-27 3, 876 416 R/P 138 y 2,5 296 825 2, 1,242 143 1,5 1,181 1, 5 1,128 Liquids 549 Natural Gas

4 Total economically recoverable resources oil and gas Billio on Barrels Oil Equivalent Estimated Ultimate Recoverable World Liquid and Gas Resources 4,5 559 Estimated Remaining Recoverable Unconventional 4, R/P 1 y Yet-to-Find Resource Growth 3,5 Remaining Discovered Conventional Cumulative End-27 3, R/P 138 y 2, , 1, ,5 1,181 1, 5 1,128 Liquids 549 Natural Gas Source: K. Chew, IHS Challenge: Falling exploration discovery volumes Does not include reserve growth in fields and unconventionals Courtesy: Ken Chew IHS 4

Year on on year increase in oil production by type of company mb/d 3.5 3 3. 2.5 2. 1.

other IOCs face increasing difficulties in acquiring new upstream assets & expanding production, with

5 Year on on year increase in oil production by type of company mb/d NOCs Other IOCs and E&P companies Super majors The super majors & other IOCs face increasing difficulties in acquiring new upstream assets & expanding production, with most new output coming from NOCs Replacement of production through Exploration and higher recovery rates (without unconventionals) 5

6 Reality...?..? Cumula ative Discovery, G b 2,5 2, 1,5 1, 5 Inflexion due to falling Discovery Reality? Illusion? OPEC quota war Courtesy of ASPO Where is the truth? ²/ ³ to ¾ of world oil reserves are unaudited OPEC oil quota could prompt OPEC countries cheat on numbers Producing country budget set on oil price estimates x production forecast of a non- renewable resource could make Oil rich countries cheat on numbers 6

7 Long term oil supply cost curve The total recoverable oil resource base is estimated at 9 trillion barrels (including 2.5 trillion barrel of GTL/CTL) of which we have so far produced 1.1 Tb Peak Oil Production hydrocarbure MMbpd 14 Peak? End? 2 Homo Sapiens Homo Sapiens Oil Age Année 7

8 World primary energy demand in the Reference Scenario: this is unsustainable! Mtoe 18 Other renewables 16 Hydro Nuclear 1 Biomass 8 Gas 6 Coal 4 Oil World energy demand expands by 45% between now and 23 an average rate of increase of 1.6% per year with coal accounting for more than a third of the overall rise Energy related related CO 2 emissions in the Reference Scenario gatonnes Gig International marine bunkers and aviation Non OECD gas Non OECD oil Non OECD coal OECD gas OECD oil OECD coal 97% of the projected increase in emissions between now & 23 comes from non OECD countries three quarters from China, India & the Middle East alone 8

leading IOCs The super majors have been struggling to replace their proven reserves in recent years

9 International oil company oil & gas reserves replacement ratio 3% Super majors Next 21 largest IOCs 25% Average (26 IOCs) 2% 15% 1% 5% % Note: For the 5 super majors & 15 other leading IOCs The super majors have been struggling to replace their proven reserves in recent years despite sharply increased spending on exploration Reserve replacement: financial limitations Coutesy of IHS 9

10 Financial limitations: Cost are rising Coutesy of IHS International oil company outlays from operating cash flow lars Billion dol Acquisitions Dividends Buyback of equity Exploration Development Note: For the 5 super majors & 15 other leading IOCs Half of the increase in cash flow in 2 27 was returned to shareholders in the form of equity buybacks & dividends exceeding the increase in E&P spending 1

11 Technology Finding Reserves Finding new reservoirs Improving the recovery factor (currently 35% average for conventional oil) Improve economics on unconventional Technology Improved seismic, DHI Low Fraquency Passive Seismic EOR: Flooding, SAGD, ES-SAGD, Bacterial Improved drilling Multilateral Greener drilling and production 11

12 Recovery factors 3 trillion recoverable means 9 trillion OIP Improving RF from.35 to.5 means 4.5 trillion recoverable i.e. more than produced today... Who will go back to abandoned fields? All fields are not candidate Currently EOR accounts for about 2% of the oil produced... Still, we can improve through research and development Unconventional: Tar sand Energy Efficiency is currently around 2% Environmental impact Air Water Land 12

trillion de pieds cubiques 3 Historique Prévisions 25 Consommation 3% 2 16% Importations nettes

13 En augmentant l exploitation domestique, les États-Unis ont diminué leurs importations de gaz naturel. trillion de pieds cubiques 3 Historique Prévisions 25 Consommation 3% 2 16% Importations nettes 14% 15 Production intérieure Cas type AEO29 Cas type AEO Source : EIA, Présentation du cas type Annual Energy Outlook 29, 17 décembre 28 Aging workforce 13

14 28 SPE membership by region 1.21% 3.32% 1.58% 3.72% 1.57% North America Middle East Europe Asia pacific Africa 14.8% 52.78% Russia and Caspian 12.1% South America Unknown SPE Membership 28 Average SPE age by region North America Middle East Europe Asia pacific Africa Russia and Caspian South America 14

15 Average Age By Region SOUTHWESTERN N AMERICA REGION GO CENTRAL & SE N AMERICA REGION WESTERN N AMERICA REGION MID-CONTINENT N AMERICA REGION NORTHEASTERN N AMERICA REGION UNKNOWN REGION GULF COAST N AMERICA REGION ROCKY MOUNTAIN N AMERICA REGION ALL REGIONS S CENTRAL & E EUROPE REGION NORTH SEA REGION S AMERICA & CARIBBEAN REGION MIDDLE EAST REGION 15

OECD/IEA World Energy Outlook 2011 focus on oil, gas and coal

OECD/IEA World Energy Outlook 2011 focus on oil, gas and coal World Energy Outlook 2011 focus on oil, gas and coal The context: fresh challenges add to already worrying trends Economic concerns have diverted attention from energy policy and limited the means of intervention