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BP Statistical Review of World Energy June 2009

Volatility and Structural Change

Mark Finley General Manager, Global Energy Markets June 22nd, 2009
© BP 2009

Outline

• Introduction • Volatility and Structural Change • Fuel by Fuel • Conclusion

The Economy Growth in global GDP and trade % 6 5 4 3 2 1 0 2001 '02 '03 '04 '05 '06 '07 2008 GDP grow th (lhs) World trade grow th (rhs) US real policy rates and GDP growth % 12 10 8 6 4 2 0 % 5 4 3 2 1 0 -1 -2 -3 Real Fed Funds rate GDP (y-o-y) 2001 '02 '03 '04 '05 '06 '07 '08 2009 Source: Includes data from IMF World Economic Outlook and Oxford Economics .

Energy Prices Index: Jan-07=100 300 250 200 150 100 50 0 Jan-07 Gas (Henry Hub) Oil (Brent) Coal (NW Europe) Jul-07 Jan-08 Jul-08 Jan-09 Source: Includes data from Platts and McCloskey .

OECD and Non-OECD Energy Consumption Mtoe Primary energy OECD Non-OECD Mtoe 3000 OECD 2000 Oil Non-OECD 6000 4000 2000 1000 0 1978 Mtoe 3000 OECD 2000 0 1988 1998 2008 Mtoe 3000 1978 1988 1998 2008 Gas Non-OECD Coal OECD Non-OECD 2000 1000 1000 0 1978 1988 1998 2008 0 1978 1988 1998 2008 .

GDP and Primary Energy Growth OECD Growth 3% Non-OECD Growth 10% GDP Prim ary energy 2% 8% 1% 6% 0% 4% -1% 2% -2% 2004 2005 2006 2007 2008 Source: Includes data from Oxford Economics 0% 2004 2005 2006 2007 2008 .

Crude Prices: What Happened? $/bbl 150 Dated Brent 120 Annual averages 90 60 30 0 2003 Source: Includes data from Platts 2004 2005 2006 2007 2008 2009 .

6 Gasoline China 0.6 OECD y-o-y.8 OECD Non-OECD World -0.0 0.6 -1.6 2005 Source: Includes data from IEA -0.3 Diesel + Jet-Kero 0.3 -0.9 2006 2007 2008 1Q08 2Q08 3Q08 4Q08 .8 0. Mb/d 0.Oil Consumption Growth World Mb/d 1.0 -0.

0 10-year average Tax and subsidy regimes 0.Oil Consumption Growth in 2008 Oil exporters and importers Mb/d 1.5 Oil exporters Non-OECD OECD oil im porters ex oil im porters US US Subsidizers Taxers .0 -0.0 -1.5 -1.5 0.

Mb/d 2 1 0 -1 -2 -3 -4 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Source: Includes data from US DOE Global consumption and production y-o-y.OPEC Adjusts to Falling Consumption OPEC-12 crude oil production y-o-y. Mb/d 2 1 0 -1 -2 2009 2009 Production -3 Consum ption -4 1Q08 2Q08 3Q08 4Q08 1Q09 .

4 M exico Nigeria US Norw ay UK Russia Canada Brazil Kazakhstan Kuw ait Angola Qatar Iraq Saudi Arabia -0.3 Decrease -0.Main Oil Production Changes M b/d -0.1 0.1 Increase 0.2 -0.4 Non-OPEC FSU OPEC .2 0.3 0.0 0.

0 OECD commercial inventories Million barrels 2800 2003-2007 range 2007 2008 2009 2008 0.5 2700 2600 0.Changes in Production and Inventories Global oil production changes Mb/d 1.0 NonOPEC OPEC OPEC NonOPEC 2300 Jan M ar M ay Jul Sep Nov Source: Includes data from IEA .5 2400 -1.0 OPEC -12 crude 2500 -0.

Non-OPEC ex FSU Oil Production Mb/d 35 30 25 20 15 10 5 0 1980 1984 1988 1992 1996 2000 2004 2008 North Am erica M iddle East S&C Am erica Af rica Europe Asia Pacif ic .

OPEC FSU Other OPEC World FSU Other .Reserves-to-Production Ratios R/P (years) 140 120 100 80 60 40 20 0 Note: Showing R/P ratios of over 20 years and reserves over 2 billion barrels.

Global Oil Reserves Bn bbls 1400 1200 1000 800 600 400 200 0 1980 1984 1988 1992 1996 2000 2004 2008 OPEC FSU OECD Other Other Oil Sands .

2 From new investm ent From low er crude runs 0.6 4 2 0.3 0 1998 2000 2002 2004 2006 2008 Source: Includes data from Parpinelli and Energy Security Analysis Inc.0 2006 2007 2008 .9 6 0.Refining Margins and Spare Capacity Refining margins $/bbl 10 BP GIM 10-year average 8 Spare capacity growth Mb/d 1. 0.

Natural Gas Market Gas prices $/mmbtu 16 14 12 10 8 6 Japan LNG EU contract UK NBP US Henry Hub Growth in 2008 Bcm 120 Non-OECD 100 OECD 80 60 40 4 2 0 Jan-07 20 0 Jul-07 Jan-08 Jul-08 Jan-09 Production Consum ption Source: Includes data from Platts .

rig count outside Gulf of Mexico Bcm 550 530 510 490 470 2007 2008 300 200 100 Non-conventional gas 2006 450 2002 2003 2001 2004 2005 430 1999 410 400 0 1990 1993 1996 1999 2002 2005 2008 Sources: Includes data from US DOE and Baker Hughes 2000 1997 1998 600 800 1000 1200 1400 Gas rig count .US Gas Production Gas production Bcm 600 500 400 Conventional gas Production vs.

Nigeria. Egypt. Bcm 6 Asia US Americas 60 4 2 0 Asia 40 Europe 20 -2 -4 0 2007 2008 -6 1Q08 2Q08 3Q08 4Q08 1Q09 * LNG from Algeria. Belgium. Norway.Atlantic Basin LNG* By importer Bcm 80 Switching between markets y-o-y change. Trinidad and Equatorial Guinea Sources: Includes annual data from Cedigaz and quarterly figures from Waterborne LNG .

5 180 120 South Africa UK Australia 60 Germ any Spain 0 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 US Sources: Includes data from McCloskey and Platts .Coal Prices and Consumption Growth Prices $/tonne 240 NWE CIF US CAAP Japan Steam coal Qinhuangdao spot Consumption growth Mtoe China India Russia South Korea 7.4 5.1 -2.6 -8.3 92.8 6.5 -4.7 18.8 -5.8 -4.

Changes in Nuclear and Hydroelectric Output Nuclear y-o-y growth 6% RoW 5% 4% 3% China Hydro 10-year average 2% 1% 0% -1% -2% 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 .

Global Ethanol Production Mtoe 40 US Brazil ROW 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 .

Renewable Energy Wind capacity GW 150 US Spain RoW 100 Germ any China Solar PV capacity GW 15 US Spain RoW 10 Mexico North Sea Germ any Japan 50 5 0 2003 2004 2005 2006 2007 2008 Sources: Includes data from BTM Consult. EPIA and EurObserver 0 2003 2004 2005 2006 2007 2008 . IEA.

CO2 Emissions and Prices Global CO2 emissions Billion tonnes of CO2 17 OECD 16 Non-OECD 25 20 EU Emissions Trading Scheme €/tonne of CO2 equivalent 30 15 15 14 10 Dec-09 contract 5 0 13 12 2004 2005 2006 2007 2008 Jan07 Jul07 Jan08 Jul08 Jan09 Source: Includes prices from European Climate Exchange .

2000$ 35 30 25 20 3 15 10 5 0 2002 2004 2006 2008 Source: Includes data from Oxford Economics and US DOE Population Billion 6 5 4 OECD Non-OECD Primary energy Billion toe 6 5 4 3 2 1 0 OECD Non-OECD OECD Non-OECD 2 1 0 2002 2004 2006 2008 2002 2004 2006 2008 .GDP. Population and Primary Energy Consumption GDP Trillion.

Conclusion • 2008: Rapid market adjustment • Non-OECD: The future is here • Volatility: Unavoidable in our industry? .

BP Statistical Review of World Energy June 2009 Volatility and Structural Change Q&A © BP 2009 .

Coal in the European Union Gas and coal consumption growth Mtoe 10 Coal Gas Changes in EU coal imports by source Million tonnes US 5 0 -5 -10 8.8 UK France EU South Africa -9.8 Russia 0.8 Indonesia -1.1 Australia -15 -20 Spain Germ any Sources: Includes data from Eurostat -3.2 .