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The Future of GlobalOil Supply

Understanding the Building Blocks

SPECIAL REPORT

We welcome your feedback regarding this IHS CERA report. Please feel free to e-mail us atinfo@ihscera.com; please reference the title of this report in your message.

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le format); downloadable, full-color graphics; author biographies;and the Adobe PDF version of the complete report.

The accompanying materials were prepared by Cambridge Energy Research Associates, Inc. (CERA), and are not to be redistributedor reused in any manner without prior written consent, with the exception of client internal distribution as described below. CERA strives to besupportive of client internal distribution of CERA content but requires that (a) CERA content and information, including but not limited to graphs,charts, tables,

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gures, and data, are not to be disseminated outside of a client organization to any third party, including a client’s customers,

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nancial institutions, consultants, or the public; and (b) content distributed within the client organization must display CERA’s legal notices andattributions of authorship. Some information supplied by CERA may be obtained from sources that CERA believes to be reliable but are in no waywarranted by CERA as to accuracy or completeness. Absent a speci

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c agreement to the contrary, CERA has no obligation to update any contentor information provided to a client. © 2009, All rights reserved, Cambridge Energy Research Associates, Inc., 55 Cambridge Parkway, Cambridge,Massachusetts 02142. No portion of this report may be reproduced, reused, or otherwise distributed in any form without prior written consent.

ABOUT THE AUTHOR

PETER M. JACKSON,

IHS CERA Senior Director, Oil Industry Activity, is a widely respected authorityon oil and gas production and upstream development. He combines expertise with practical experiencein some of the world’s most important production areas. At IHS CERA he is responsible for global oilcapacity outlooks. A major component of his research is examining current trends and challenges inproduction capacity and reserves distribution as well as forecasting which areas will become a focusfor exploration and production (E&P) industry investment over the next ten years. He was principalauthor of IHS CERA’s 2009 Private Report

Pausing for Breath: Liquids Production Capacity to 2030.

Recent research topics tackled by IHS CERA’s Oil Supply Team include the changing composition ofthe barrel, the role of giant

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elds in future supply, and understanding the drivers of future supply inkey producing countries. He has also played a major role in developing IHS CERA’s new

E&P TrendsForum.

Dr. Jackson has 22 years of E&P experience with what were Britain’s two leading independentoil companies, Britoil and Enterprise Oil, as a geologist and manager. With Enterprise he was Presidentand General Manager of Enterprise Oil’s Gulf of Mexico business, where he gained extensive experiencewith deepwater development. He served as Chief Geologist for Enterprise, responsible for the worldwideview of prospects and development, while Enterprise was the world’s largest independent oil company.He also gained extensive knowledge of E&P projects while working in the United Kingdom, Indonesia,and Italy. Dr. Jackson holds a BSc from St. Andrews University and a PhD from Edinburgh University.

© 2009, All rights reserved, Cambridge Energy Research Associates, Inc.55 Cambridge Parkway, Cambridge, Massachusetts 02142.No portion of this report may be reproduced, reused, or otherwise distributed in any form without prior written consent.

THE FUTURE OF GLOBAL OIL SUPPLY:UNDERSTANDING THE BUILDING BLOCKS

KEY IMPLICATIONS

The controversy surrounding future oil supply can be divided into two components: a determinationof the factors that will drive the much-debated future of oil supply and then, longer term, aconsideration of consequences and the actions required when oil supply eventually plateaus. IHSCERA identi

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es a number of critical observations at the core of this analysis of future supply:

Supply evolution through 2030 is not a question of resource availability.

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IHS CERA projects growth of productive capacity through 2030, with no peak

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evident.There is no unique picture of the course of future of supply: we are dealing with a

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complex, multicomponent system. Aboveground drivers—economics, costs, service sector capability, geopolitics, the timing

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and nature of government decision making, and, centrally of course, investment—arecrucial to future supply availability.Market dynamics will remain highly volatile.

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The upstream oil industry faces major challenges in ﬁnding new oil and turning discoveries

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into commercial production.

—November 2009