MENA Energy Trends Edward Bell Commodities Analyst Emirates NBD Research June 216 www.emiratesnbdresearch.com 1
(Proved reserves, trn cu metres) (Proved reserves, trn cu metres) (Proved reserves, m bbl) (Proved reserves, m bbl) Middle East and North Africa s influence over global energy markets remains dominant MENA holds more than 5% of global oil reserves which are mostly concentrated in Gulf region 35 3 25 2 15 1 5 3 25 2 15 1 5 MENA controls 47% of global gas reserves with Iran and as regional gas heavyweights 4 35 3 25 2 15 1 5 4 35 3 25 2 15 1 5 Source: BP Statistical Review of World Energy, 216. Emirates NBD Research. 2
(m b/d) (Years of production) (m b/d) (m b/d) MENA accounts for more than a third of global oil production and has years more to run US has now pipped Saudi Arabia as world s largest crude producer two years running 14 12 1 8 6 4 2 - but there is no challenge to Saudi Arabia s dominance across the region. 14 12 1 8 6 4 2 MENA output has increased despite the collapse in oil prices 4 3 2 1 2 22 24 26 28 21 212 214 Saudi Arabia Iraq Iran UAE Kuwait Algeria Oman Egypt Other Middle East Sudan Tunisia Yemen Syria but reserve to production ratios remain high, not least aided by political disruptions. 35 3 25 2 15 1 5 - Source: BP Statistical Review of World Energy 216, Emirates NBD Research. 3
(bn cu metres) (Years of production) (bn cu metres) (bn cu metres) Natural gas has largely been used to meet local demand Natural gas has historically been of secondary importance to oil 9 8 7 6 5 4 3 2 1 but development of s LNG industry has increased regional output. 25 2 15 1 5 and Saudi Arabia have provided main impetus for regional gas supply growth 8 6 4 2 2 Iran 22 24 26 28 21 212 214 Saudi Arabia Algeria UAE Egypt Oman Bahrain Kuwait Libya Other Middle East Syria Yemen Iraq Source: BP Statistical Review of World Energy 216, Emirates NBD Research. while region has large potential to take advantage of shift to cleaner burning gas 2 18 16 14 12 1 8 6 4 2 4
Oil exports (m b/d) Natural gas exports (bn cu metres) Oil market balance (m b/d) Natural gas market balance (bn cu metres) Middle East still has a dominant, if declining, share of global energy trade Global oil balances have shifted thanks to increases from North America Positive MENA gas balance under exploited 4 3 2 1-1 -2-3 -4 198 1985 199 1995 2 25 21 215 3 2 1-1 -2-3 198 1985 199 1995 2 25 21 215 North America North America Europe and Eurasia Middle East Europe and Eurasia Middle East Africa Africa Middle East share of oil trade has declined Lack of pipelines keep MENA underrepresented in international gas trade 7 6 5 4 3 2 1 2 22 24 26 28 21 212 214 US Canada Mexico Europe Russia Other CIS Middle East North Africa West Africa Rest of World Middle East: % of total (rhs) 45 4 35 3 25 2 1, 5 North America 214 215 Other Europe Norway Russia Other CIS Algeria Other Middle East Other Africa Indonesia Source: BP Statistical Review of World Energy 216, Emirates NBD Research. 5
(m toe) (m toe annual change) (m toe) (% change 5-year average) Middle East remains an outlier in terms of pace of growth in energy demand Emerging markets continue to grab more and more global energy demand Energy demand has been slowing globally but MENA outpaces most regions 14, 12, 1, 8, 6, 4, 2, - 198 1985 199 1995 2 25 21 215 North America Europe and Eurasia Middle East Africa 1. 8. 6. 4. 2. - (2.) 2 22 24 26 28 21 212 214 North America Europe and Eurasia Middle East Africa Total MENA energy demand has quintupled in a generation and regional demand shows relative immunity to economic cycles 1,2 1, 8 6 4 2 198 1985 199 1995 2 25 21 215 Iran Saudi Arabia United Arab Emirates Egypt Algeria Kuwait Other Middle East 6 4 2-2 2 22 24 26 28 21 212 214 Iran Saudi Arabia United Arab Emirates Egypt Algeria Kuwait Other Middle East Total Source: BP Statistical Review of World Energy 216, Emirates NBD Research. 6
( m toe) (m toe) MENA region continues to be a highly intensive user of oil and gas and is a global outlier on near zero coal use Middle East energy balance heavily tilted toward fossil fuels with natural gas providing most of region s energy needs 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % North America South and Central America Europe and Eurasia Middle East Africa Coal Nuclear energy Natural gas Hydro-electric Oil Renewables Oil Natural gas Coal Nuclear energy Hydro-electric Renewables Oil Natural gas Coal Nuclear energy Hydro-electric Renewables GCC countries use relatively more fossil fuels than rest of MENA while renewables use remains low and concentrated in North Africa 3 25 2 15 1 5 Iran Kuwait Saudi Arabia United Arab Emirates Other Middle East Algeria Egypt 1..9.8.7.6.5.4.3.2.1 - Iran Kuwait Saudi Arabia UAE Other Algeria Egypt Middle East Total MENA Oil Natural gas Coal Nuclear energy Hydro-electric Renewables 214 215 Source: BP Statistical Review of World Energy 216, Emirates NBD Research. 7
(USD/litre) CO2 emissions (m tonnes) GDP/capita (USD/head) Oil consumption/capita (Bbl/person) MENA energy intensity remains high and represents a risk to keeping long-term supplies available for export Energy demographics show wide variation across MENA, with Gulf countries much heavier users but energy inefficiencies are much higher in the Gulf despite some strong gains over the past 1 years 1, 9, 8, 7, 6, United Arab US 5, Emirates Germany 4, Japan 3, Kuwait Brazil Saudi Arabia 2, China Algeria 1, Iran Egypt India 1 2 3 4 5 6 7 8 Oil consumption/capita (bbl/head) 8 7 6 5 4 3 2 1 Kuwait United Arab Emirates Saudi Arabia US Iran Algeria Brazil Japan Germany Egypt India China 1, 2, 3, 4, 5, Oil intensity of GDP (USD/bbl) Even with cuts to fuel subsidies, petrol prices in the region remain well below international levels Regional emissions are low on aggregate but high on a per capita basis 1.8 1.6 1.4 1.2 1..8.6.4.2. UAE Saudi Arabia US India China UK Germany 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, India Brazil Algeria China Japan Germany Iran US Saudi Arabia Kuwait United Arab Emirates Egypt 1 2 3 4 5 CO2 emissions per capita (tonnes/head) Source: BP Statistical Review of World Energy 216, UN, IMF, Bloomberg, Trading Economics, Emirates NBD Research. Note: petrol prices are monthly average of premium grade USD/litre. 8
Thank you www.emiratesnbdresearch.com Edward Bell Commodities Analyst Emirates NBD edwardpb@emiratesnbd.com 9
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