Increasing Energy Efficiency for Secure Energy Supplies · Why exploration program is so important?...
Transcript of Increasing Energy Efficiency for Secure Energy Supplies · Why exploration program is so important?...
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Increasing Energy Efficiency for Secure Energy Supplies
UNECE, June 3-5, 2009
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Oil and gas in a modern world
Source: Korzhubaev,presentation at RAEN,April 2008
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More than 75 % of oil and 40 % gas cross international borders
Russia: more than 70 % of oil production and 30 % of gas production are delivered to the world market
International character of the oil and gas supply
Source: Korzhubaev,presentation at RAEN,April 2008
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Global energy consumption
0
50
100
150
200
250
300
350
13000 B.C. - 1900 1900 - 1970 1971 - 2007
Bill
ion
t oe
Global energy consumption
Old Stone AgeSource: Korzhubaev,presentation at RAEN,April 2008
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Growth of the global energy demand
Source: IEA WEO 2005, base scenario
GasGasOilOil
1971 2003 2030
3 341
6 029
9 488
Global demand (mill tonn o.e.)
EuropeUSA
EuropeUSA
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Source: Energy security forums,Kuala Lumpur, London, New York2008
Energy security challenge: Global Consumption
Governments face the challenge of making long-term decisions and investments in a time of great uncertainty that is only exacerbated by the financial crisis
For businesses, any disruption to the power supply can be hugely damaging—one need only look at the blackout of 2003 that brought chaos to several states of the US for a very real example of the potential risks
Consumers are also increasingly aware of what energy security means to them, in terms of what they spend on their fuel bills and how much it costs them to fill up at the gas station
Physical security: how vulnerable are local supplies to interruptions? Do we have adequate diversity, back-up, storage and emergency planning?
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Global Oil and Gas Reserve Base
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Global Oil Reserves
Global oil reserves
0,911,11,21,51,71,722,2
3,43,7
4,95,45,5
911,5
1314
15,518,9
36,3
0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0 40,0
SudanAzerbaijan
Norway AngolaAlgeria
BrasilMexico
QatarChina
CanadaUSA
NigeriaLibya
KazakhstanRussia
VenezuelaUAE
KuwaitIraqIran
Saudi ArabiaB
illio
n to
nes
Potential resources of the RussianArctic shelf – 30 Billion tones
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Global Gas Reserves
1,81,91,92,42,52,62,62,92,933,2
4,34,55,25,96,1
7,125,4
28,147,7
0,0 10,0 20,0 30,0 40,0 50,0 60,0
KuwaitUzbekistan
EgyptChina
MalaysiaAustralia
IndonesiaTurkmenistan
NorwayKazakhstan
IraqVenezuela
AlgeriaNigeria
USAUAE
Saudi ArabiaQatar
IranRussia
Trill
ion
CM
Global gas reserves
Potential resources of the RussianArctic shelf – 70 Trillion CM
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Global Petroleum Reserves
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Potential resources of the RussianArctic shelf – 100 Billion TOE
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Source: Y. Makogon, Journal of Petroleum Science and Engineering, 56 (2007)
World Primary Energy Substitution
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Russia: petroleum Industry – a leading sector of the economics
Petroleum Industry:
Biggest part of GDP
Highest return on investment
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Russia's oil production until 2030 by regions
Russia's oil production forecast
0
100
200
300
400
500
600
700
2010 2015 2020 2025 2030
Ann
ual p
rodu
ctio
n, m
illio
n to
nes
Far East East Siberia West Siberia European part
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Russia's gas production until 2030 by regions
Russia's gas production forecast
0100200300400500600700800900
1000
2010 2015 2020 2025 2030
Ann
ual p
rodu
ctio
n, b
illio
n cu
b m
Far East East Siberia West Siberia European part
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Stagnation of the industry due to lack of investment potential
Source: Ministry of Energy, Rosneft
Two possible developments during the next 5-years (2009-2013):No solutions to the investment challenges: oil production falls down to 450 million ton by 2013 (5-year plan)With solutions: oil production growth up to 511 million ton by 2013
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Rational use of associated gas – need for a state policy in increasing energy efficiency
Explanations
Limited access to gas transport systemUndeveloped infrastructure for utilization of associated gas
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Annual economic loss due to associated gas flaring amount to $ 750 million (gas price $50/1000 m3)
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New regions – challenges in project development
Arctic offshore fields
Severe climate conditionsPresence of iceHigh costLong distance export of oil and gas – additional heavy costLack of technology, competence and experience in offshore field developmentDeficit of qualified personnelEnvironmental risks, not yet fully understoodEnergency response time
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Russian Arctic Offshore – Exploration status
Number of exploration wells
0
1000
2000
3000
4000
5000
6000
Russia total North Sea
Exploration coverage, km/km2
0
1
2
3
4
5
Russia total North Sea
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Keeping the energy balance: RRR
Why exploration program is so important?Two important indicators:
1. Annual production
2. Reserves base
Production is always constrained: p=k·R
However, we are interested in production growth: pn=(1+a)·pn-1
Then Reserves Replacement Ratio (RRR) is:
RRR =S/P= 1+a/[k*(1+a)] ≈ 1+a/k
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RRR for gas
0,00
0,50
1,00
1,50
2,00
2,50
3,00
1991 1993 1995 1997 1999 2001 2002 2003 2004
Reserves Replacement Ratio for oil and gas (Russia)RRR for oil
0,00
0,50
1,00
1,50
2,00
2,50
1991 1993 1995 1997 1999 2001 2002 2003 2004
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Keeping the energy balance: RRR
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Arctic shelf development – a long term strategic task
Source: Rosneft
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Russian Arctic Offshore –investment requirements
[Kommersant, April 21, 2008]. Rosneft … is to develop Russian shelf together with Gazprom, has estimated the required investments: they will run to $ 2.64 trillion until 2050.
This is 2.5 times Russia’s 2007 GDP.
Bogdanchikov (Rosneft CEO) says $ 680 billion will have to be invested in geological prospecting, and $ 1.96 trillion in development.
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Primary Energy Consumption
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Primary Energy Consumption
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Primary Energy Consumption
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Primary Energy Consumption
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Primary Energy Consumption
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Primary Energy Consumption
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Primary Energy Consumption
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World Primary Energy Consumption
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Forecast of the financial support of R&D activities (per cent of GDP)
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R&D financing, % of GDP
0,00,51,01,52,02,53,03,54,0
USA Japan EC 27 China India Russia
Per
cent
of G
DP
1995 2000 2005 2020Source: A. Dynkin,presentation at RAEN,April 2008
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Investments in Upstream R&D by oil majors
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CompanyInvestments in
R&D,$ million
Investments in Upstream R&D,
$ million
% of total R&D
investments
Part of R&D of cost of oil and gas production,
$/t.o.e. (2005)ExxonMobil 712 214 30 1,04BP 502 251 50 1,25RD Shell 588 294 50 1,67ConocoPhillips 125 63 50 0,79Chevron 316 158 50 1,24TOTAL 841 421 50 3,44ENI 254 127 50 1,46Statoil 165 149 90 2,58Repsol 78 71 90 1,26Petrobras 399 359 90 3,22PetroChina 396 198 50 1,42Sinopec 278 139 50 3,20CNOOC 50 50 100 2,35Rosneft 16 14 90 0,17Lukoil 22 20 90 0,20TNK-BP 18 16 90 0,20
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Energy Efficiency
Energy Consumption (Key Performance) Indicators and Sustainable Development
Specific Energy ConsumptionEnergy Consumption per GDPHuman Development Index
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World Primary Energy Consumption
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Specific Energy Consumption
02468
1012
Aze
rbai
jan
Kaz
akha
stan
Nor
way
Rus
sia
Turk
men
ista
n
Uzb
ekis
tan
Ukr
aine
Glo
bal S
EC
Toe/
capi
ta
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World Primary Energy Consumption
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Specific Energy Consumption
0,0
0,2
0,4
0,6
0,8
1,0
Aze
rbai
jan
Kaz
akha
stan
Nor
way
Rus
sia
Turk
men
ista
n
Uzb
ekis
tan
Ukr
aine
Glo
bal S
EC
Toe/
$ 1
000
GD
P
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Human Development Index as Complex KPI
0,6
0,7
0,8
0,9
1
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Year
HD
I, fra
ctio
n
Azerbaijan
Kazakhstan
Russia
Turkmenistan
Uzbekistan
Ukraine
Norway
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
World Primary Energy Consumption
36
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Conclusions
Fossil fuels (oil, gas and coal) will continue to play a key role in global primary energy consumption in a long term forecastReserve base should be maintained to ensure sustainable production, energy supply and energy consumptionStable and predictable laws and regulations to attract foreign participants / investorsTransfer of international competence and experience to local subcontractorsStable access to market outlets
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Conclusions
Where to invest?– Upstream: exploration– Upstream: technology development– Downstream: energy efficiency
UN Economic Commission for Europe (UNECE) should have a closer look into the energy efficiency in oil and gas projectsMore meaningful KPIs A better (more attractive) investment climate should be established to engage investors into the energy efficiency R&D projects International policy for increasing the energy efficiency
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Our Common Task
To conduct a sustainable development that ”meets the needs of the present generation without compromising the ability of the future generations to meet their own needs”
(Brundtland Commission report, 1987)