Professional Documents
Culture Documents
of World Energy
An Update: The Long Term
and the Short Term
Christof Rühl
Chief Economist
© BP 2008
Outline
Introduction
High Energy Prices
The Long Term and the Short Term
The Oil Market
Other Fuels
Conclusion
6% 100 10 100
4% 80 8 80
2% 60 6 60
0% 40 4 40
-2% 20 2 20
-4% 0 0 0
98 00 02 04 06 08 98 00 02 04 06 08 98 00 02 04 06 08
350
300
250
200
150
100
50
0
1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008
1970s 2000s
Growth
7%
Primary energy GDP (PPP)
6%
5%
4%
3%
2%
1%
0%
1967 1969 1971 1973 2001 2003 2005 2007
3%
2%
1%
0%
1991 1995 1999 2003 2007 1991 1995 1999 2003 2007
5% 5%
4% 4%
3% 3%
2% 2%
1% 1%
0% 0%
1991-2000 2001-2007 Power Primary GDP
Generation Energy
Non-OECD 1.2
80%
Non-OECD
1.0
60% 0.8 Non-OECD
Non-OECD
40% 0.6
OECD OECD 0.4
20% OECD
0.2
OECD
0% 0.0
1990-2000 2000-2007 1990-2000 2000-2007
BP Statistical Review of World Energy 2008
© BP 2008
Turn of the Commodity Price Cycle?
200
150
50
0
2000 2003 2006 Dec Feb Apr Jun Aug
2008
BP Statistical Review of World Energy 2008
© BP 2008
The Oil Market
120
$ 106.74 per barrel in December 1979 $ 98.46 per barrel in Sep 2008
100
80
60
40
20
0
1973 1978 1983 1988 1993 1998 2003 2008
600
400
200
-200
-400
-600
Oil Non-OECD OECD oil Heavy Moderate Moderate Heavy
exporters oil importers subsidies subsidies taxes taxes
importers
100 4.40
0 4.00
-100 3.60
-300 2.80
-400 2.40
-500 2.00
Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08
Source: EIA
BP Statistical Review of World Energy 2008
© BP 2008
Recap: Supply Management 2007…
-1.5 -1.5
Growth Decline Growth Decline
Mbbls $/bbl
2002-2006 range Stocks in 2007 Brent oil price (rhs)
2800 100
2700 90
2600 80
2500 70
2400 60
2300 50
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Decrease Increase
Kb/d
-500 -400 -300 -200 -100 0 100 200 300 400
Angola
Non-OPEC Azerbaijan
FSU Russia
OPEC Iraq
Sudan
Canada
Nigeria
Venezuela
Mexico
Norway
Saudi Arabia
2.0 120
1.5 Oil price (rhs) 100
27
1.0
80
0.5
60
0.0
26
40
-0.5
-1.0 20
-1.5 0 25
Jan-05 Jan-06 Jan-07 Jan-08 2006 2007 2008 2009
2700
2600
2500
2400
2300
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
-200
4%
-400
2%
-600
0% -800
US Japan China S&C Am. US Japan China S&C Am.
Europe ME World Europe ME World
Mb/d Mb/d
14 3.0
Production with Original 2006 Assessment
Start Dates
12
Currently Expected 2.5 2007 Assessment
Production 2008 Assessment
10
2.0
8
1.5
6
1.0
4
2 0.5
0 0.0
2003 2006 2009 2012 2007 2008 2009 2010 2011 2012
10%
9.8
8%
6% 9.6
4%
9.4
2%
0% 9.2
2001 2003 2005 2007 2005 2006 2007 2008
Kb/d
0 200 400 600 800 1000 1200 1400
China
Africa
Middle East
N.America
World 2007
-75 1.5
90
-150 1.0
60
-225 0.5
30 -300 0.0
Jan-07 Sep-07 May-08 Jan-07 Sep-07 May-08 Jan-07 Sep-07 May-08
Production Consumption
Billion m3 Billion m3
-10 0 10 20 30 40 -10 0 10 20 30 40
US
US
China
China
Qatar
Russia
Nigeria
Turkmenistan Japan
Azerbaijan
Turkey
Russia
Chile
Canada
Germany
UK
Source: Cedigaz
BP Statistical Review of World Energy 2008
© BP 2008
Fuel Switching in Power Generation 2005-07
Gas Share
UK gas vs. coal US gas vs. oil
70% 100%
60% 95%
50% 90%
40% 85%
30% 80%
Gas is Gas is
Gas is not competitive Gas is not competitive
competitive competitive
20% 75%
-60 -40 -20 0 20 -6 -3 0 3 6
Gas competitiveness vs. coal (€/MWh) Gas competitiveness vs. resid ($/Mmbtu)
Production Consumption
20% 19%
S & Cent. S & Cent.
America 1% America
2%
Africa Africa
40 3.1%
300
30 2%
8.3%
200
20
100
10
0 0
US tralia India frica ssia esia e sia tralia India ssia frica bia
u s h A Ru don d on Aus Ru th A olom
A ut In In u C
So So
BP Statistical Review of World Energy 2008
© BP 2008
GDP and Power Generation
12% 60%
8% 40% Other
non-
OECD
4% 20% India
China
0% 0%
GDP Power Coal
Billion bbls
1600
Middle East S. & Cent. America
Europe & Eurasia Africa
North America Asia Pacific
Other oil sands
1200
800
400
0
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007
5%
4%
3%
2%
1%
0%
-1%
-2%
World Europe FSU North Middle S. & Africa Asia
America East Cent. Pacific
America
Nuclear Hydro
y-o-y growth
6%
5%
4%
3%
10-year average
2%
1%
0%
-1%
-2%
2004 2005 2006 2007 2004 2005 2006 2007
World OECD
12%
8%
4%
0%
2004 2005 2006 2007
* Wind, photovoltaics and geothermal
30 2% 200
20
1% 100
10
0 0% 0
2001 2003 2005 2007 2001 2003 2005 2007
Sources: BDEW, EIA
BP Statistical Review of World Energy 2008
© BP 2008
Conclusion