Meeting the World’s Demand for
          Liquid Fuels
  A Roundtable Discussion
        A New Climate For Energy
       EI...
World Marketed Energy Use by Fuel Type

                  250
                                      History               ...
World Liquids Consumption by End-Use
                            Sector, 2005, 2015, and 2030

                      250  ...
World Oil Prices in Three Price Cases,
                                                    AEO2009 – Real Prices
         ...
World Liquids Consumption in Three Price Cases,
                  AEO2009
                          130
                  ...
NOCs Increasing Control over the World’s
                     Oil and Gas Reserves

                        1970          ...
Liquids Supply in 2030
     Low Price Case                                                 High Price Case


             ...
World’s Liquid Fuels Supply
                      110                                                                     ...
Top 15 Liquids Producers
                                                   and Their Prospects
                          ...
Top 15 Liquids Producers
                                                         and Their Prospects
                    ...
Costs of Production by Resource
                                     140
  Production Cost (dollars - 2008)



           ...
Additional Slides

• Country Sheets




                                  12
United States
                                                                               Expected Production          ...
Saudi Arabia
                                                                   Expected Production                       ...
Russia
                                                       Expected Production                                         ...
Brazil
                                                                         Expected Production                       ...
Canada
                                                                                     Expected Production           ...
Algeria
                                                                       Expected Production                        ...
Nigeria
                                                                      Expected Production                         ...
Kuwait
                                                              Expected Production                                  ...
Oil Iea Sweetnam
Oil Iea Sweetnam
Oil Iea Sweetnam
Oil Iea Sweetnam
Oil Iea Sweetnam
Oil Iea Sweetnam
Oil Iea Sweetnam
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Oil Iea Sweetnam

  1. 1. Meeting the World’s Demand for Liquid Fuels A Roundtable Discussion A New Climate For Energy EIA 2009 Energy Conference April 7, 2009 Washington, DC
  2. 2. World Marketed Energy Use by Fuel Type 250 History Projections 33% 29% 200 36% Liquids Quadrillion Btu 150 24% 27% Natural Gas Coal 100 23% Renewables 8% 50 8% 6% Nuclear 6% 0 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Source: EIA, IEO2008 2
  3. 3. World Liquids Consumption by End-Use Sector, 2005, 2015, and 2030 250 Building Industrial Transportation Electric Power 200 Quadrillion Btu 150 100 50 0 2005 2015 2030 Source: EIA, IEO2008 3
  4. 4. World Oil Prices in Three Price Cases, AEO2009 – Real Prices $200 $200 Light Sweet Crude Oil (2007 $/B) $150 Reference Case High World Oil Price $130 Low World Oil Price $100 $50 $50 Closing price on April 3, 2009 History Projections $0 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Source: EIA, AEO2009, NYMEX 4
  5. 5. World Liquids Consumption in Three Price Cases, AEO2009 130 2008 119 120 Reference Case 110 Low World Oil Price 105 High World Oil Price Million Barrels per Day 100 90 89 86 80 70 60 50 History Projections 40 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Source: EIA, AEO2009 5
  6. 6. NOCs Increasing Control over the World’s Oil and Gas Reserves 1970 2009 Reserves Held by Russian Companies NOC Reserves NOC Reserves (Equity Access) (Limited Equity Full IOC Access Access) 15% 8% 12% 1% 85% SOVIET 14% Reserves 65% Full IOC Access NOC Reserves (Limited Equity Access) Source: PFC Energy, Oil & Gas Journal, BP Statistical Review 6
  7. 7. Liquids Supply in 2030 Low Price Case High Price Case 2007 30% 45% 45% 51% 40% 55% 1% 18% 7% 3% 1% 4% Reference Case 40% 48% Non-OPEC Conventional Non-OPEC Unconventional OPEC Unconventional 11% OPEC Conventional 1% Source: EIA, AEO2009 7
  8. 8. World’s Liquid Fuels Supply 110 110 Non-Petroleum 100 100 Unconventional Liquids Non-OPEC 90 90 Unconventional Petroleum Projects 80 Unidentified 80 Non-OPEC Unconventional Million Barrels per Day 70 Projects 70 Petroleum Liquids OPEC Unconventional 60 60 Petroleum Liquids 50 43 50 Non-OPEC Conventional Projects 40 40 OPEC Conventional Projects 30 30 Non-OPEC Existing 20 20 Conventional OPEC Existing 10 10 Conventional 0 0 AEO2009 Reference Total Consumption 08 10 12 14 16 18 20 22 24 26 28 30 20 20 20 20 20 20 20 20 20 20 20 20 Source: EIA, AEO2009 8
  9. 9. Top 15 Liquids Producers and Their Prospects 2,500 2,000 Change in Total Liquids Production United States from 2007 to 2015 ('000 b/d) 1,500 Brazil 1,000 Canada Algeria Saudi Arabia 500 Nigeria Iraq Kuwait 0 China Russia Venezuela UAE -500 Iran Norway -1,000 Mexico -1,500 0 0 0 0 00 00 0 00 00 00 00 ,0 ,0 2, 4, 6, 8, 10 12 Current Liquids Production ('000 b/d) Source: EIA, AEO2009 9
  10. 10. Top 15 Liquids Producers and Their Prospects 3,500 3,000 Change in Total Liquids Production United States 2,500 from 2015 to 2030 ('000 b/d) Brazil 2,000 Iraq 1,500 Venezuela Saudi Arabia Canada 1,000 Algeria Russia 500 Nigeria Iran China Kuwait 0 United Arab Emirates Mexico Norway -500 -1,000 -1,500 -2,000 0 0 0 0 00 00 0 00 00 00 00 ,0 ,0 2, 4, 6, 8, 10 12 Current Liquids Production ('000 b/d) Source: EIA, AEO2009 10
  11. 11. Costs of Production by Resource 140 Production Cost (dollars - 2008) Deepwater 120 and ultra deepwater 100 Coal Oil to liquids 80 shales Gas to Arctic CO2 - EOR liquids EOR Heavy oil 60 and bitumen 40 Other Conventional Oil 20 Produced MENA 0 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Resources (billion barrels) Source: International Energy Agency, IEA 11
  12. 12. Additional Slides • Country Sheets 12
  13. 13. United States Expected Production Index of Total Wells Drilled Annually 13 200 $80 12 180 $70 11 160 10 $60 Million Barrels per Day Drilling Index to 1995 9 140 Dollars per Barrel 8 $50 120 7 100 $40 6 5 80 $30 4 60 3 $20 40 2 $10 1 20 0 0 $- 2006 2015 2030 1998 1996 2000 2002 2004 2006 Onshore Drilling Offshore Drilling Source: EIA, AEO2009 Total Drilling WTI Price Source: I.H.S. Energy, 2007 2007 Oil Production by Com pany Downside Risks & Upside Potential 4,500 Dom estic NOC • Onshore fields might not be as responsive to EOR as Thousand Barrels per day 4,000 Foreign NOC 3,500 currently expected IOC 3,000 • Independent E&P companies may not have access to 2,500 2,000 capital in the near-term 1,500 1,000 • Legislation could open to development more currently 500 restricted areas - • Legislation on climate change could provide additional il l er ps on o ta ob rk incentives to use CO2 for EOR th en lli vr da nM O hi he id na oP cc xo C A oc O Ex on 13 C Source: Global Insight, September 2008
  14. 14. Saudi Arabia Expected Production Index of Total Wells Drilled Annually 13 160 $80 12 140 $70 11 10 120 $60 Million Barrels per Day Drilling Index to 1995 9 Dollars per Barrel 8 100 $50 7 80 $40 6 5 60 $30 4 3 40 $20 2 20 $10 1 0 0 $- 2006 2015 2030 1998 1996 2000 2002 2004 2006 Onshore Drilling Offshore Drilling Source: EIA, AEO2009 Total Drilling WTI Price Source: I.H.S. Energy, 2007 2008 Oil Production by Com pany Downside Risks & Upside Potential 10000 9000 Dom estic NOC • Production could be cut to support world oil prices Foreign NOC • Kingdom could abandon commitment to spare capacity Thousand Barrels per day 8000 IOC 7000 and high production levels 6000 • Field decline rates could accelerate 5000 4000 3000 2000 • Production could be expanded to discourage 1000 alternatives 0 Saudi Aram co Chevron Source: Wood Mackenzie, Pathfinder 2009 14
  15. 15. Russia Expected Production Index of Total Wells Drilled Annually 2000 $80 13 12 1800 $70 11 1600 10 $60 Drilling Index to 1995 Million Barrels per Day 1400 9 Dollars per Barrel $50 8 1200 7 1000 $40 6 800 5 $30 4 600 $20 3 400 2 $10 200 1 0 0 $- 2006 2015 2030 1998 1996 2000 2002 2004 2006 Onshore Drilling Offshore Drilling Total Drilling WTI Price Source: EIA, AEO2009 Source: I.H.S. Energy, 2007 2008 Oil Production by Com pany Downside Risks & Upside Potential 2500 • High levels of taxation could remain in place Thousand Barrels per day Dom estic NOC 2000 Foreign NOC • Exploration in eastern Siberia and offshore could fall IOC 1500 due to concerns about nationalization 1000 • Levels of investment could remain low. 500 • Future changes in taxation policies could have large 0 impact and encourage investment P l • Small firms could rebound faster than expected from om ft er oi t az -B s ef ne K th or tn eg K pr LU os O st TN Ta financial crisis az t ve ef R G tn In u e rg at Su iv 15 Pr Source: Wood Mackenzie, Pathfinder 2009
  16. 16. Brazil Expected Production Index of Total Wells Drilled Annually 450 $80 13 12 400 $70 11 350 10 $60 Drilling Index to 1995 Million Barrels per Day 9 Dollars per Barrel 300 $50 8 250 7 $40 6 200 5 $30 150 4 $20 3 100 2 $10 50 1 0 0 $- 2006 2015 2030 1998 1996 2000 2002 2004 2006 Onshore Drilling Offshore Drilling Total Drilling WTI Price Source: EIA, AEO2009 Source: I.H.S. Energy, 2007 2008 Oil Production by Com pany Downside Risks & Upside Potential 2500 Dom estic NOC • Changes to licensing and bid round structure could be severe enough to discourage some foreign investors Thousand Barrels per day 2000 Foreign NOC IOC • Subsalt potential could be less than expected 1500 • Unexpected technical difficulties could slow production of subsalt resources 1000 500 • Changes to licensing and bid round structure could work to facilitate investment and joint development 0 • Subsalt potential could be much larger than expected Petrobras Shell Repsol YPF Other Source: Wood Mackenzie, Pathfinder 2009 16
  17. 17. Canada Expected Production Index of Total Wells Drilled Annually 13 250 $80 12 $70 11 200 10 $60 Drilling Index to 1995 Million Barrels per Day Dollars per Barrel 9 $50 8 150 7 $40 6 100 5 $30 4 $20 3 50 2 $10 1 0 $- 0 1996 1998 2000 2002 2004 2006 2006 2015 2030 Onshore Drilling Total Drilling WTI Price Conventional Liquids Bitum en Source: EIA, AEO2009 Source: I.H.S. Energy, 2007 2007 Oil Production by Com pany Downside Risks & Upside Potential 1,800 1,600 Dom estic • Current conventional decline rates could accelerate Thousand Barrels per day Foreign NOC 1,400 IOC • Environmental legislation (in Canada or the U.S.) could 1,200 limit bitumen production 1,000 800 600 • Decline rates at conventional fields might be slowed 400 • Bitumen extraction technology could continue to 200 improve - EnCana Canada Other Suncor Energy Energy Shell Syncrude Imperial Oil Husky Resources Canadian Petro- Natural Source: Global Insight, 2009 17
  18. 18. Algeria Expected Production Index of Total Wells Drilled Annually 13 450 $80 12 400 $70 11 350 10 $60 Drilling Index to 1995 Million Barrels per Day 9 Dollars per Barrel 300 $50 8 250 7 $40 6 200 5 $30 150 4 $20 3 100 2 50 $10 1 0 0 $- 2006 2015 2030 1996 1998 2000 2002 2004 2006 Onshore Drilling Total Drilling WTI Price Source: EIA, AEO2009 Source: I.H.S. Energy, 2007 2008 Oil Production by Com pany 900 Downside Risks & Upside Potential Thousand Barrels per day 800 Dom estic NOC 700 Foreign NOC • Government could further discourage foreign 600 IOC investment, as it did with the 2006 Hydrocarbon Law 500 • Sonatrach’s ability to invest in production maintenance 400 300 and expansion could be hindered due to competing 200 government expenditure needs 100 0 • Government could reverse nationalization tendencies i c ch er En ps sa o as expressed in the 2006 Hydrocarbon Law pe rk th ra ep lli G da no O hi at C & na oP Si n il So O A oc k on rs ae C M Source: Wood Mackenzie, Pathfinder 2009 18
  19. 19. Nigeria Expected Production Index of Total Wells Drilled Annually 13 350 $80 12 300 $70 11 10 $60 Million Barrels per Day Drilling Index to 1995 250 9 Dollars per Barrel 8 $50 200 7 $40 6 150 5 $30 4 100 3 $20 2 50 $10 1 0 0 $- 2006 2015 2030 1998 1996 2000 2002 2004 2006 Onshore Drilling Offshore Drilling Source: EIA, AEO2009 Total Drilling WTI Price Source: I.H.S. Energy, 2007 2008 Oil Production by Com pany Downside Risks & Upside Potential Thousand Barrels per day 1000 900 Dom estic NOC • Violence in the Delta could continue and expand into 800 Foreign NOC 700 IOC deepwater locations 600 500 • Financial management at NNPC could deteriorate 400 300 further 200 100 0 • Nigerian government might implement policies that PC C i reduce violence in the Delta oP a x il ro l l er En ps x o on il ta el ia PD ob O yd oc dd N th Sh To er lli vr St tal nM N N O hi lH ig he A en N oi C g at tin Ex in on on uc C C od Pr il ob 19 M Source: Wood Mackenzie, Pathfinder 2009
  20. 20. Kuwait Expected Production Index of Total Wells Drilled Annually 13 120 $80 12 $70 11 100 10 $60 Drilling Index to 1995 Million Barrels per Day 9 Dollars per Barrel 80 $50 8 7 60 $40 6 5 $30 40 4 $20 3 20 2 $10 1 0 0 $- 2006 2015 2030 1996 1998 2000 2002 2004 2006 Onshore Drilling Total Drilling WTI Price Source: EIA, AEO2009 Source: I.H.S. Energy, 2007 2008 Oil Production by Com pany Downside Risks & Upside Potential 2500 Dom estic NOC • KPC’s technical ability to maintain and expand Thousand Barrels per day 2000 Foreign NOC production could be hindered by politically motivated IOC management changes 1500 • Political disagreements could prevent Project Kuwait from achieving expected progress 1000 500 • Political disagreements could settle and allow Project Kuwait to move forward 0 • KPC technical capabilities could return to previous Kuw ait Oil Com pany (KOC) Kuw ait Gulf Oil Com pany (KGOC) levels Source: Wood Mackenzie, Pathfinder 2009 20

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