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Energy in the Middle East John Ridgway
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Transcript of Energy in the Middle East John Ridgway
Energy in the Middle EastJohn Ridgway
Global Energy Outlook
Middle East Outlook
Safety of our people – Protection of the environment
Agenda
1. Will there be sufficient energy to fuel continued growth?
2. Will that energy be secure?
3. Will it be sustainable?
4. What is the story for the Middle East?
Key Questions
Global energy consumption will rise by 41% by 2035
Primary energy consumption growth slows – from 2.2% (2005 – 2015) to 1.7% (2015-2025) and 1.1% (to 2035)
Slow down is driven by non-OECD (China & India)
World is more energy efficient
Oil, gas and coal continue to evenly share approx. 90% of consumption – with coal and oil showing the slowest growth (circa 1% pa) and gas the fastest (1.9% pa)
New sources (renewable, hydro, nuclear) continue to help supply
Overview
Demand increases by 41% between 2012 & 2035
Average slows: from 2.2% (2005- 2015) to 1.7% (2015-2025) and 1.1% (to 2035)
Leaving phase of high energy consumption growth led by industrialisation of non-OECD
95% of the above growth is in non-OECD
Slowdown in China – India matches China in last decade
Energy Outlook
Primary Energy Consumption Growth Slows
All fuels show growth over period
Among fossil fuels, gas is the fastest growing (1.9% pa)
Oil (0.8% pa) shows slowest growth
Coal’s contribution to growth diminishes rapidly (China)
Energy Outlook
Consumption by Fuel
Regional energy imbalances suggest trading relationships will significantly change.
North America – net exporter
Asia – 2035 accounts for 70% of inter-regional net imports
Middle East remains the largest net regional energy exporter.
Russia the worlds largest exporting country
Carbon emissions continue to grow (1.1% pa)
Energy Outlook
The security & sustainability of energy supply
Energy Outlook
Oil Prices Remain in $100 – $110/ bbl range
Global liquids consumption is projected to reach 109 Mb/d by 2015 – but growth slows (from 1.3% pa in 2000-2012 to 0.6% for 2025 – 2035)
OECD consumption projected to fall to lowest since 1985
Non OECD consumption will be 60% higher than in 2012
China’s demand surpasses USA in 2029. India and Middle East are the next largest contributors.
India becomes the largest contributor to demand growth from 2030 to 2035.
Middle East overtakes the USA to become largest per capita consumer of oil in 2033
Energy Outlook
Asia & Middle East Drive Liquids Demand Growth
Since Arab Spring supply disruptions have become the norm.
By end of 2013 – disruptions had removed over 2 Mb/d from global market. Meanwhile US output surged nearly matching barrel for barrel.
Without the above disruptions prices would likely have come under pressure without OPEC action.
History has shown us that such disruptions in production take up to a decade to fully recover – which should take pressure off OPEC in the medium term.
Energy Outlook
Supply disruptions reduce the immediate impact on OPEC
Energy Outlook
Oil trade continues to shift from West to East
In the US, the increase in tight oil production coupled with declining demand will continue the dramatic shift in import dependence.
Imports are set to decline from a peak of well over 12 Mb/d, or 60% of demand, in 2005 to just 1 Mb/d, or less than 10% of demand in 2035.
China’s import requirement, on the other hand, is projected to more than double from today’s levels to almost 14 Mb/d, or 75% of demand, a level and share of demand higher than the US at its peak. China will likely surpass the US as the world’s largest importer next year and largest consumer by 2029.
On a regional basis, led by China’s growing import requirement, Asia’s imports will account for nearly 80% of inter-regional net imports by 2035, up from 57% today.
Meanwhile, the Middle East’s share of inter-regional net exports will dip from 54% in 2012 to 52%, suggesting that Asia will not only require Middle Eastern oil, but will also pull from other surplus regions such as the Americas, Africa and the FSU.
Energy Outlook
Asia’s import needs go beyond the Middle East
Energy Outlook
Extra OPEC supply required to balance stocks
Energy Outlook
Oil major trade movements 2013
ME remains world’s largest oil producer ME remains the world’s largest oil exporter
ME maintains its leading role as the world’s top oil exporter
ME energy production expected to expand by 37% while consumption grows by 77%
ME oil production expected to expand by 22% and demand by 55% between today and 2035
ME remains worlds largest oil exporter – share of global supply expanding from 32% today to 34% in 2035
ME remains world’s largest oil exporter 20Mb/d to 22Mb/d
Natural gas is the fastest growing fossil fuel of both production (+74%) and consumption (+95%).
Middle East Outlook
Global Oil Production 1965-2009 & predicted to 2015
Complex Global Supply Chain Maritime infrastructure – Well to Wheel
Common Interests Energy flow – vital for world consumers High seas must remain open for free trade
Changing Environment Unstable situations cause tension in a stable market Regional energy remains in high demand Changes to business model
Industry and Navies in Partnership Trusted relationship / share information / education Habitual coordination
Be Prepared
Summary