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EAGE STUDENT LECTURE TOUR 2009 - 2010            What energy future after world oil                   production peak ?3@ ...
What energy future after world oil production peak?1     A reminder of oil fundamentals: a few key points2     Production ...
Key considerations about energy fundamentalsEnergy and life: from sun to foodEnergy and our way of life : from Paleolithic...
Key considerations about energy fundamentals                                                                              ...
GDP and demand for oil annual growth rate (%, worldwide)     World Energy in the past was simple: oil was the “physical re...
Oil growth is coming exclusively from the OPEC                                     Annual changes in oil production (Mb/d)...
Crude oil production - production almost equal to demand          4 000                              OPEC                 ...
Upstream: E&P represent 80% of the          global oil industry investment400   G$350                 Others : transport, ...
History of investment in exploration-production350   G$                                                                   ...
The key paradoxes of the oil industryAt 100 $/b crude oil, theupstream worldwide averagetechnical costs represent15% , whi...
What energy future after world oil production peak?1     A reminder of oil fundamentals : a few key points2     Production...
History of oil discoveries (proved and probable)                  and production                        19
History of recent hydrocarbon discoveries (proved andprobable) and production                                             ...
From discoveries to oil resources                                                                                  New dis...
0                                                                                                                   500   ...
From resources to reserves : production                  Production profiles liquids: North Sea clastics160 000           ...
From resources to reserves : production          Production profiles liquids: Middle East carbonates180 000               ...
Depletion rate versus recovery factors                                    for various type of oil fields                  ...
Foreseeable drop in productionsDaily production                                              Daily productionMb           ...
The 2009 « TOTAL view » of future            world petroleum production  Mb/d110                                  Biofuels...
The irreversible decline of oil production in the USA                           Peak oil is not a theory: it’s an historic...
Various world oil production profile forecasts                     29
The exploration production capacity challenge                                        World oil productionMb/d = Million ba...
Summary of opinions about "peak oil"Since June 2006 it can be considered that views about Peak Oil in Francehave become re...
Summary of opinions about "peak oil"Oil and gas will still be produced beyond the end of the 21st centuryHowever the oil p...
What energy future after world oil production peak?1     A reminder of oil fundamentals : a few key points2     Production...
Climate change: the earth’s evolving temperatureVariation in global temperatures over 1000 years (in °C)The zero reference...
Atmospheric contributions to greenhouse effect                                       Halocarb,                            ...
Strong anthropic emissions increase of carbon dioxyde                           36
Projections are heavily scenario-dependantT°                                           10 billion                         ...
For those who do not believe in Science…                      38
Climate change: what can an oil company do about it ?Promote a better understanding of climate change mechanisms and use i...
Capture and Storage of CO2Dedicated CCS (Carbon Capture & Storage) program andpartnership since 2001  Capture technology ...
What energy future after world oil production peak?1     A reminder of oil fundamentals : a few key points2     Production...
Crude oil price and crisis             42
Brent price evolution forecasts 94 constant $/b9080                                                         1980-19817060 ...
What is driving oil prices ?It depends upon which newspaper you read… Financial press: stocks, stocks market anticipations...
The price impact of OPEC surplus production capacity                Surplus OPEC capacity (right scale)                IPE...
Oil prices 2005 – 2050 (Arabian light in US $ 2000/bbl)$/b250200150                                                       ...
Production costs are increasing…        … necessitating a relatively high oil price$/bbl                                  ...
Key considerations about future oil and energy pricesHigh oil prices are a favourable factor:    To ensure stability and ...
What energy future after world oil production peak?1     A reminder of oil fundamentals : a few key points2     Production...
The 4 main drivers for oil industry structural changes    Geopolitics    Peak oil and Peak gas    Carbon emission costs...
World Oil Players                                                                                                  ARAMCO ...
The oil industry structure in the past and today                  80%Crude suppliers   60%                  40%           ...
World Oil production profile and transports share                         53
Liquid hydrocarbons: an energy compactness that noother sources can match, neither today nor in the future      10        ...
Which energy for road transports       1960 – 2000 - 2100                55
Which energy for road transports Back to fully proved locomotion systems ….                      56
Gas demand mainly driven by power generation                                   160                                       2...
Gas reserves and resources                                                                  Proved reserves of Gas 6,340  ...
World energy outlook (IAE)Gboe  40                                                                  Oil  35               ...
Coal resourcesCoal resources                                                                From F.W. WELLMER   Capture an...
Renewable energies will grow but not enough                                                                          Annua...
Conclusion: future of oil industryIt should be bright for all players: IOC’s, NOC’s, independants,but also contractors, ma...
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Eage slt eu_p_mfinal

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  • Echelle vertical variation par rapport à n-1 2004 début du boom de la chine pour les 2/3 de l’augmentation du gdp
  • Angola left outside the OPEC for consistency purpose
  • Explosion des investissements à partir de 2004
  • Usd courant 30% des investissements sur 4% des réserves On investit tout le cashflow (difference entre courbe prix et courbe investissement)
  • 1991-1995 154.5 Gboe en 170 découvertes > 100 MMboe (moy= 908 MMboe/découverte) 1995-2000 125.7 Gboe en 246 découvertes > 100 MMboe (moy= 511 MMboe/découverte) 2001-2005 72.8 Gboe en 221 découvertes > 100 MMboe (moy= 330 MMboe/découverte) 2006- 7.8 Gboe en 33 découvertes > 100 MMboe (moy= 236 MMboe/découverte) (Mail H.Dewaele du 23/07/08) Découvertes importantes (> 2 Gboe) selon IHS : - Pour 1999-2000 : Azadegan, Shah Deniz, Tabrak (Iran), Niban (Ar S.), Kashagan, Jansz (Aust.) Sulige, Kamnomeskoye (Yamal) - Pour 2005-2006 : Kish (Iran), Tupi (Brésil), Umn Nigar (Koweit)
  • Most likely : 2P Le chiffre intègre les condensats
  • ( Sand clastics are « water wet ») BSW : Baril Salted Water
  • ( Carbonates are « oil wet » )
  • Il est utopique d’espérer produire au dela de 40% Comparaison des depletion rate (natural depletion) Normalisé en pourcentage, indépendant de la taille Alwyn North Forties Bekapai Brent ABK Yibal Ghaw ar Handil Cantarel déclin après 30% de récupération Le trend décroissant ne peut être enrayé Les OIP correspondants sont (en MMbbl) Handil 1 750 Bekapai 450 Forties 4 800 Brent 3 800 Alwyn North 367 ABK 1 195 Yibal (Oman) 3 950 Ghawar 215 000 Cantarell (Akal) 32 209
  • Others???XTL
  • En 2015 la “Required capacity increased” sera de 42 à 52 Mb/d, selon les hypothèses hautes ou basses.
  • Manque les origines des prédictions
  • Les IOC (nous) ne sont pas les grands méchants loups, les NOC controlent les ressources, ont les moyens financiers, il nous reste le high tech
  • As for oil, the real challenge for gas is not the amount of reserves, which are abundant, but growing demand. If gas demand continued to grow by 2.3% a year, peak gas could occur shortly after 2035. However if growth were reduced to 1.8% a year, peak gas would not occur until around 2040-2045. ************************************************************************************** Back up 1/ Proven Reserves PN CDEP 10/02/06 : 5 660 Tcf reserves en 2100 Sources e xternes : 6 340 Tcf Ultimate = chiffres de BP Stat. fin 2004 (les nouveaux chiffres ne sont pas encore publiés) 2/ Reserve Growth PN CDEP 10/02/06 : 1 320 Tcf reserves en 2100 Sources externes : 2 000 Tcf Evaluation IHS (juin 2005) : 900 Tcf (high scenario) 3/ Undiscovered PN CDEP 10/02/06 : 880 Tcf reserves en 2100 Sources externes : chiffres BP Stat . fin 2004 : 4 000 Tcf (les nouveaux chiffres ne sont pas encore publiés) Evaluation IHS juin 2005 = 4100 Tcf (high scenario) Ces chiffres semblent exagérément optimistes, il est proposé de les réduire ) 2 000 Tcf. 4/ Ressources non conventionnelles PN CDEP 10/02/06 : pas pris en compte sauf pour les US dans le prouvé et dans le growth Sources externes : 2 000 Tcf Ultimate Tight Gas : certains parlent de plus de 11 000 Tcf en place ; Ressources récupérables : 700 – 1600 Tcf Gas Shale : plus de 2500 Tcf en place ; Ressources récupérables : 200 – 500 Tcf CBM : plus de 3500 Tcf en place ; Ressources récupérables : 350 – 1000 Tcf Chiffre retenu = 2000 Tcf NB : Il est presque certain que ces ressources non conventionnelles sont prises en compte en partie dans les “Proven Reserves” et les « Undiscovered » de sources externes, notamment aux US. Il est malheureusement impossible de savoir de combien. D’autre part, ces ressources non conventionnelles ne seront mobilisées que très tardivement.
  • Eage slt eu_p_mfinal

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    8. 8. EAGE STUDENT LECTURE TOUR 2009 - 2010 What energy future after world oil production peak ?3@ - 4727
    9. 9. What energy future after world oil production peak?1 A reminder of oil fundamentals: a few key points2 Production constraints: oil and gas peaks3 Climate constraints: some key data4 Oil prices: yesterday, today, and tomorrow5 What future for energy: the oil industry in a new world 9
    10. 10. Key considerations about energy fundamentalsEnergy and life: from sun to foodEnergy and our way of life : from Paleolithic to the industrial revolutionAnd for the last 50 years : Oil has been the dominant source of primary commercial energy (40% of world total) Oil has been the economic regulator of all energy prices Oil has been the physical regulator of the world energy system OPEC has been the regulator of world oil system Saudi Arabia has been the regulator of OPEC 10
    11. 11. Key considerations about energy fundamentals 9012 00011 000 8010 000 Mtoe Gboe 70 9 000 8 000 Nuclear & 60 Hydro 7 000 50 6 000 Gas 40 5 000 4 000 30 Oil 3 000 20 2 000 10 1 000 Coal 0 0 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 Since 2003 coal has become the “physical regulator” of the World Energy system 11
    12. 12. GDP and demand for oil annual growth rate (%, worldwide) World Energy in the past was simple: oil was the “physical regulator” 10 % 8% 6% Since 2004 this is no more true 4% In 2004 2/3 of GDP 2% Increase coming from 0% China -2 % -4 % -6 % 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 GDP OIL demand 12
    13. 13. Oil growth is coming exclusively from the OPEC Annual changes in oil production (Mb/d) Others outside OPEC OPEC OECD Former USSR (Brazil, Angola*, Chad, etc.) (“Swing producer”) 2,5 2,5 2,5 2,5Mb/d 2 2 2 2 1,5 1,5 1,5 1,5 1 1 1 1 0,5 0,5 0,5 0,5 0 0 0 0 -0,5 -0,5 -0,5 -0,5 -1 -1 -1 -1 -1,5 -1,5 -1,5 -1,5 2004 1990 1992 1994 1996 1998 2000 2002 2006 1990 1992 2006 1994 1996 1998 2000 2002 2004 1992 1994 1996 1990 1998 2000 2002 2004 2006 1990 1992 1994 1996 1998 2000 2002 2004 2006 Since 1975 OPEC has become the regulator of the World Oil system. *Angola left outside the OPEC for consistency purpose 13
    14. 14. Crude oil production - production almost equal to demand 4 000 OPEC 30 Mt/y Former Soviet Union Gb/y Others NON OPEC 3 500 Demand 25 3 000 20 2 500 2 000 15 1 500 10 1 000 5 500 0 0 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 14
    15. 15. Upstream: E&P represent 80% of the global oil industry investment400 G$350 Others : transport, marketing (estimates) Petrochemical Refining300 Exploration/Production250200150100 50 0 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 Including China and Russia since 2002 15
    16. 16. History of investment in exploration-production350 G$ $/b 70300 60 Invest. out of North250 Invest. in North Am 50200 Crude oil 40 price150 30100 2050 10 0 0 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 16
    17. 17. The key paradoxes of the oil industryAt 100 $/b crude oil, theupstream worldwide averagetechnical costs represent15% , while 10% are for theproducing companies andaround 75% for theproducing countries «government take ».These 100 $/b « crude oilcost » represent an average30% of the pumps prices inthe E.U. The other 70%consist of 60% for theconsuming countries «government take », and 10%for downstream costs(refining and marketing). 17
    18. 18. What energy future after world oil production peak?1 A reminder of oil fundamentals : a few key points2 Production constraints: oil and gas peaks3 Climate constraints: some key data4 Oil prices: yesterday, today, and tomorrow5 What future for energy: the oil industry in a new world 18
    19. 19. History of oil discoveries (proved and probable) and production 19
    20. 20. History of recent hydrocarbon discoveries (proved andprobable) and production Hydrocarbons (Liquids & Gas) Gboe Hydrocarbons (Liquids & Gas) Source : IHS et BP Stat. Revue Gtoe• World demand reaches 50Gboe per year 200 Production 25• World discoveries flat since 1996 at 20Gboe 150 New reserves 20 per year (excluding the nugget effect). • 10 Gb oil and 10 Gboe gas 100 15 • 8 Gboe discovered by NOC 10 50 5 • 10 Gboe discovered by IOC 0 0 • 2 Gboe discovered by others 1930 1950 1970 1990 2000 1920 1940 1960 1980 MMboe taille m oye nne de le ns e m ble Mboe Average size of discoveries de s dé couve r te s de lIndus trie Gboe Industrie : Réserves desdiscoveries découvertes Gboe Gboe Industrie : Réserves des nouvelles Reserves added by new nouvelles découvertes 70 70 350 Source: IHS-Edin (avril 2009) Source: IHS-Edin (avril 2009) 60 60 57.3 57.3 Kashagan (Liquids & & Gas) (Liquids Gas) 300 57.3 Turkmenistan 49.0 49.0 250 50 50 Brasil 49.0 44.0 44.0 44.0 200 40 40 150 30 30 26.3 26.3 25.6 25.6 26.3 24.3 24.3 25.6 100 21.6 21.6 23.6 23.6 23.6 21.7 21.7 24.3 21.4 21.4 20.2 20.2 21.6 21.7 21.4 20.2 18.1 18.1 17.4 17.4 20 20 18.1 17.4 50 1971-75 1976-80 1986-90 1991-95 2001-05 2006-07 1961-65 1966-70 1981-85 1996-00 0 10 10 0 0 ‘96 ‘97 ‘98 ’99 ‘00 ‘01 ‘02 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 • size of average discovery : constant since 1980 20
    21. 21. From discoveries to oil resources New discoveries Conventional Non Conventional Resources Resources Extra Heavy Oil Cumulative Proved & & Tar Sands production Probable 1000 Gb reserves Yet to find ~ 600 GbRecovery Ratio Increase 1000 Gb 200-350 Gb *32% IOR / EOR 300 Gb **37% Recovery Ratio Unrecovered Oil 4 000 Gb 2 800 – 3600 Gb In place 100% * Actual Average Ratio ** Possible Average Ratio (around 2020) « The stone age did not end by lack of stones » Sheik Mohamed Yaki Yamani 21 Source GSR Total
    22. 22. 0 500 1000 1500 2000 2500 3000 3500 Pratt (1942) Duce (1946) Gb Pouge (1946) Weeks (1948) 1949 1940 Leverson (1949) Weeks (1949) MacNaughton (1953) Hubbert (1956) Weeks (1958) 1959 1950 Weeks (1959) Hendricks (1965) Ryamn (1967) Shell (1968) 1969 1960 Weeks (1968) Hubbert (1969) Moody (1970) Weeks (1971) Warman (1972) Bauquis (1972) Schweinfurth (1973) Linden (1973) Bonillas (1974) Howitt (1974) Moody (1975) WEC (1977)22 1979 1970 Nelson (1977) De Bruyne (1978) Klemme (1978) Nehring (1978) Nehring (1979) Halbouty (1979) Meyerhoff (1979) Roorda (1979) Halbouty (1979) WEC (1980) Strickland (1981) Coliti (1981) Nehring (1982) Masters (1983) 1989 1980 Kalinin (1983) Martin (1984) Ivanhoe (1984) Source: IFP/DSEP adapted from Martin (1985) and Campbell (1992) - Updated 2000 Masters (1987) Campbell (1991) possible reserves yet to be discovered Masters (1991) Townes (1993) * Cumulative production + proven reserves + Petroconsult. (1993) 2000 1990 Historical views on ultimate reserves Masters (1994) USGS (2000) 0 Mt 100 200 300 400 500
    23. 23. From resources to reserves : production Production profiles liquids: North Sea clastics160 000 80% 100% Water 90%140 000 Oil 70% Recov 80% bpd120 000 60% 70%100 000 50% 60% BSW 80 000 40% 50% Recovery 40% 60 000 30% 30% 40 000 20% 20% 20 000 10% 10% Recov 0 0% 0% 0% 10% 20% 30% 40% 50% 60% 1 997 1 996 1 995 1 994 1 987 1 991 1 988 1 989 1 990 1 992 1 993 Source GSR Total P.Carpentier et al 23
    24. 24. From resources to reserves : production Production profiles liquids: Middle East carbonates180 000 80% 100% Water160 000 Oil 70% 90% Recov140 000 80% 60% bpd 70%120 000 50% 60% BSW100 000 40% 50% 80 000 Recovery 40% 30% 60 000 30% 20% 40 000 20% 20 000 10% 10% Recov 0% 0 0% 0% 10% 20% 30% 40% 50% 81 74 96 93 94 95 98 01 02 03 92 97 99 00 77 79 83 84 87 90 75 76 78 80 82 85 86 88 89 91 Source GSR Total P.Carpentier et al 24
    25. 25. Depletion rate versus recovery factors for various type of oil fields 10% 9% 8% 7%Depletion rate % OIIP/Year 6% 5% Rate - 4% 3% 2% 1% 0% 0% 10% 20% 30% 40% 50% 60% 70% Recup- % OIIP North Sea 1 Middle East 1 Far East 1 North Sea 2 Middle East 2 Far East 2 North Sea 3 Middle East 3 Central America 25 Source GSR Total P.Carpentier et al
    26. 26. Foreseeable drop in productionsDaily production Daily productionMb Mb 2000 70% of ultimate resources 1984 1988 1995 59% of ultimate resources 60% of ultimate resources History Consultant Alternative Prognosis Cumulated productions Cumulated productions Gb Gb From:P.Carpentier et al Total UK Russia 26
    27. 27. The 2009 « TOTAL view » of future world petroleum production Mb/d110 Biofuels100 Other90 Condensate and LPG8070 Crude oil605040 2005 2010 2015 2020 2025 2030 27
    28. 28. The irreversible decline of oil production in the USA Peak oil is not a theory: it’s an historical fact…(*) Discoveries are registered as per their initially declared sizes and their timing is « forwarded » by 33 yearsSource : King Hubbert 1956 - Updated by Jean Laherrere 28
    29. 29. Various world oil production profile forecasts 29
    30. 30. The exploration production capacity challenge World oil productionMb/d = Million barrels per day 120Mb/d Estimated demand growth (~1% 100 to 1.5%/year) 80 Required capacity increase 60 40 Producing fields decline (~5% to 6%/year) 20 0 1995 2000 2005 2010 2015 Increasing demand and natural decline of producing fields require 42 to 52 Mb/d of production between 2005 and 2015 coming from new fields 30
    31. 31. Summary of opinions about "peak oil"Since June 2006 it can be considered that views about Peak Oil in Francehave become reasonnably similar :  TOTAL : Thierry Desmarest – around 2020 / around 100 Mb/d  ASPO France : J. Laherrère – around 2015 / less than 100 Mb/d  P.R. Bauquis – around 2020 / around 100 Mb/d  IFP : Y. Mathieu – ondulated plateau 2015/2030 – less than 100 Mb/dThis point of view is widely different from those among the "optimists" whobelieve that Peak Oil is not "reserves related" but a political problem :insufficient investments and restrictive policies about investments byOPEC countries, Russia and Mexico :  Exxon Mobil – June 2006 – "no sign of peak oil"  Aramco – June 2006 -"no reserve problem"  ENI (Maugeri – Early 2006 - "no foreseeable oil peak"  BP : John Browne – May 2006 - "There is no reserves problem"  Mike Lynch (ex MIT) – "similar and above 120 Mb/d"  CERA (Cambridge Energy Research Associates) – 2007 study "Denying peak-oil"  USGS, DOE, EIA, IEA…IEA started changing their views in 2006 and accentuated this change in2007 : they now seem to realize that peak oil is not only a political or "aboveground" problem but also a geological one. 31
    32. 32. Summary of opinions about "peak oil"Oil and gas will still be produced beyond the end of the 21st centuryHowever the oil production peak (between 2015 and 2025, most probably)and gas production peak will trigger radical changesParadoxically, it will be the oil and gas industries golden age (high prices,little political interference in those prices).After the oil peak, oil and gas prices will see a change of logic: they willbecome related to those of their substitutes (reversal from the past).As soon as world oil production starts declining, OPEC will lose its price-policing role but could keep other roles. 32
    33. 33. What energy future after world oil production peak?1 A reminder of oil fundamentals : a few key points2 Production constraints: oil and gas peaks3 Climate constraints: some key data4 Oil prices: yesterday, today, and tomorrow5 What future for energy: the oil industry in a new world 33
    34. 34. Climate change: the earth’s evolving temperatureVariation in global temperatures over 1000 years (in °C)The zero reference is the period 1961-1990 NORTHERN HEMISPHERE 0.5 0.0 -0.5 - 1.0 Données provenant de thermomètres (en rouge), de cercles de croissance des arbres, de coraux, de carottes glaciaires et d’enregistrements historiques (en bleu) 1 000 1 200 1 400 1 600 1 800 2 000 34
    35. 35. Atmospheric contributions to greenhouse effect Halocarb, 12% Water vapor Stratosph. Ozone 55% 13%Other green- N2O 5%house gases CO2 Clouds 53% CH4 30% 15% 17% Natural Anthropic (155 Watts/m2) (2.8 Watts/m2) 35
    36. 36. Strong anthropic emissions increase of carbon dioxyde 36
    37. 37. Projections are heavily scenario-dependantT° 10 billion humans raise their average emissions to those of the year 2000 World emissions remain constant 37
    38. 38. For those who do not believe in Science… 38
    39. 39. Climate change: what can an oil company do about it ?Promote a better understanding of climate change mechanisms and use it’sindustrial competences to develop potential solutionsBetter control greenhouse gas emissions from it’s own facilitiesHelp its clients to manage their greenhouse gas emissionsPromote alternatives: renewable energies non CO2 or low CO2 emitting andnuclear energyImagine and validate efficient and reliable solutions to capture and store CO2(Lacq Pilot scheme and others)  … while continuing to meet the world’s energy demand (deep offshore, unconventional oil, mature fields, LNG…) 39
    40. 40. Capture and Storage of CO2Dedicated CCS (Carbon Capture & Storage) program andpartnership since 2001  Capture technology development: IPCC – 20-40% of world CO2 emissions by 2050  CO2 injection and storage  Storage integrity  Well integrity  Long term fate of CO2  P&R, monitoring Total Lacq project 40
    41. 41. What energy future after world oil production peak?1 A reminder of oil fundamentals : a few key points2 Production constraints: oil and gas peaks3 Climate constraints: some key data4 Oil prices: yesterday, today, and tomorrow5 What future for energy: the oil industry in a new world 41
    42. 42. Crude oil price and crisis 42
    43. 43. Brent price evolution forecasts 94 constant $/b9080 1980-19817060 1982 19835040 198430 Actual201001972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 43
    44. 44. What is driving oil prices ?It depends upon which newspaper you read… Financial press: stocks, stocks market anticipations… Economic press: investment, economic growth,…. Green/red press: speculation, speculation, greed…. All these explanations are partially relevant: world unused surplus capacity is the key factor 44
    45. 45. The price impact of OPEC surplus production capacity Surplus OPEC capacity (right scale) IPE Brent prices (left scale) Price ($/b) M b/d 45
    46. 46. Oil prices 2005 – 2050 (Arabian light in US $ 2000/bbl)$/b250200150 Oil Prices100 50 0 2005 2011 2017 2023 2029 2035 2041 2047 2053A dream view presented in Cambridge by P.R. Bauquis on 15/03/06 46
    47. 47. Production costs are increasing… … necessitating a relatively high oil price$/bbl Oil shales100 Extra 80 Extra Heavy Ultra Heavy deep oil oil water Arctic 60 Deep water 40 Other Conventional Enhanced Recovery 20 OPEC Middle East Billions of barrels 1000 2000 3000 47
    48. 48. Key considerations about future oil and energy pricesHigh oil prices are a favourable factor:  To ensure stability and economic growth of oil producers  To ensure energy conservation of oil importers  To ensure development of energy substitutes (Renewable and Nuclear)  To ensure development of “High Tech.” costly oil.High oil prices means around 100 $/bbl in constant US$ referenced year 2000(order of magnitude)However before prices could stabilize in this price range a new oil shock withtemporary very high prices (200 to 400 $ / bbl) is a likely scenario 48
    49. 49. What energy future after world oil production peak?1 A reminder of oil fundamentals : a few key points2 Production constraints: oil and gas peaks3 Climate constraints: some key data4 Oil prices: yesterday, today, and tomorrow5 What future for energy: the oil industry in a new world 49
    50. 50. The 4 main drivers for oil industry structural changes  Geopolitics  Peak oil and Peak gas  Carbon emission costs (climate issue)  The financial/economic crisis 50
    51. 51. World Oil Players ARAMCO 7.5 7 International companies National companies 6.5 6 5.5 5 Oil production 4.5 NIOC Mb/d (Iran) 4 4 PEMEX Mb/d 3.5 PDV (Venezuela) 3 ExxonMobil INOC (Irak) 2.5 Shell PetroChina KPC (Kuwaït) 2 BP ChevronTexaco Sonatrach TOTAL 1.5 Libya NOC ADNOC (UAE) 1 ENI 0.5 Repsol-YPF 0 0 10 20 30 40 50 60 70 80 90 100 110 120 260 Oil reserves in Gb…technical, environmental and societal acceptability 51 Source : Oil and Gas Journal, AIE
    52. 52. The oil industry structure in the past and today 80%Crude suppliers 60% 40% 20% 0% Majors National Others companies* Companies 80% Refining 60% 1973 1973 capacities 2005 2000 1999 40% *State ownership > 50% 20% 0% Majors National Others companies* Companies 52
    53. 53. World Oil production profile and transports share 53
    54. 54. Liquid hydrocarbons: an energy compactness that noother sources can match, neither today nor in the future 10 kWh / kg 9 8 7 liquid Hydrocarbons 6 5 4 3 Compressed Natural gas 2 Hydrides 1 Hydrogen Batteries kWh / l 0 0 1 2 3 4 5 6 7 8 9 10 Compressed natural gas : steel or composite tanks Hydrogen : liquid or compressed from 5000 to 10000 PSI in composite tanks 54
    55. 55. Which energy for road transports 1960 – 2000 - 2100 55
    56. 56. Which energy for road transports Back to fully proved locomotion systems …. 56
    57. 57. Gas demand mainly driven by power generation 160 2002 2030 - growth: +3,2% pa Electricity 120 GHGenergy : growth +1,7% pa Electricity emission : growth +1,7% pa Fossil = 80% energy fuels of primary growth IEA primary energy 80 consumption by segment 40 Heating Industry Heating Industry Transportation Transportation 0 1970 1980 1990 2000 2010 2020 2030 132 12% Renewables (+5.6%)Annual growth rate Mboe/day 112 3% 17% Hydroelectricity (+2.0%) 89 2005-2030 3% 16% 22% Nuclear (+0.7%) 17% 22% 21% Oil (- 0.7%) 45% 39% Natural gas (+2.5%) 46% 2005 2015 2030 57 Coal (+2.1%)
    58. 58. Gas reserves and resources Proved reserves of Gas 6,340 Gas Resources TCF Europe FSU North America 2,000 2,000 ~2,000 Middle Asia East Pacific Latin Africa America Proved Reserve Yet-to-find Estimatedreserves growth reserves resources Conventional gas Non Conventional Sources : O&G Journal, USGS, IEA, HIS, Cedigaz Proved conventional gas reserves equivalent to 65 years of today’s demand Gas availability controlled by transportation : pipelines and LNG terminals Gas prices controlled by long term contracts 58
    59. 59. World energy outlook (IAE)Gboe 40 Oil 35 Coal 30 25 Gas 20 15 Bioenergy 10 Nuclear energy 5 Solar/Wind/Geothermal 0 Water power Still 80% of the energy mix still derived from fossil fuels in 2030 From L. Bolkow, 2009 59
    60. 60. Coal resourcesCoal resources From F.W. WELLMER Capture and sequestration of CO2 is not an option, it is a necessity 60
    61. 61. Renewable energies will grow but not enough Annual growth 2005 - 2030Mboe/d 58 .Estimates ar Solar, wind, etc /ye + 8.3 % .6% 9 2 + 41 10 Hydroelectric power + 2.5 % 3 3 31 7 1 2 24 5 Biofuels (incl BtL) + 7.6 % 4 36 28 24 19 Biomass (incl. forest use in developing countries) + 1.7 % 1990 2005 2015 2030 Source: IEA World Energy Outlook , Alternative Policy Scenario 61
    62. 62. Conclusion: future of oil industryIt should be bright for all players: IOC’s, NOC’s, independants,but also contractors, major Service Cies, specialized ServiceCies…not forgetting R & D Institutes and Training Specialists!Twenty years down the road this industry will have been deeply« redesigned » both because of the ressources/productionconstraints and the climate change issuesLike always the most adaptable and the best will not onlysurvive: they will do fascinating jobs and make money… Thank you for your attention 62

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