Spencer Dale

Group chief economist

 Three windows on the energy transition
Primary energy demand
End-use sector Region Fuel
Billion toe
20 20 20 Renewables
Transport Other
Africa Hydro
Industry
Other Asia
Nuclear
Non-combusted India
15 15 15 Coal
Buildings China
OECD Gas
Oil
10 10 10

5 5 5

0 0 0

2019 BP Energy Outlook

2 © BP p.l.c. 2019
Regional energy demand
Primary energy consumption Primary energy growth and regional
by region contributions
Billion toe % per annum
20 3.0%
Other
Other Asia 2.5%
Africa
15 India 2.0%
China
OECD 1.5%
10
1.0%

0.5%
5
0.0%

-0.5%
0
1990- 2000- 2010- 2020- 2030-
1990 2000 2010 2020 2030 2040
2000 2010 2020 2030 2040
2019 BP Energy Outlook
3 © BP p.l.c. 2019
Global energy by fuel type
Primary energy consumption by fuel Shares of primary energy

Billion toe
20 50%
Renewables
Hydro
Nuclear 40%
15
Coal
Gas 30%
Oil
10
20%

5
10%

0 0%
1970 1980 1990 2000 2010 2020 2030 2040 1970 1980 1990 2000 2010 2020 2030 2040

2019 BP Energy Outlook

4 © BP p.l.c. 2019
Five key questions and uncertainties

 How much ‘more energy’ does the world need?

 How will LNG transform natural gas markets?

 How quickly could renewables grow?

 A low-carbon energy system: what more needs to be done?

 Recent developments in Indonesia

2019 BP Energy Outlook

5 © BP p.l.c. 2019
Human development and energy consumption
UN Human Development Index and energy consumption, 2017
HDI
1.0 Line of best fit

Indonesia
0.8

Sample of
0.6 countries

0.4
80% of
0.2 population

0.0
0 100 200 300 400 500

Gigajoules/head 2019 BP Energy Outlook

6 © BP p.l.c. 2019
Five key questions and uncertainties

 How much ‘more energy’ does the world need?

 How will LNG transform natural gas markets?

 How quickly could renewables grow?

 A low-carbon energy system: what more needs to be done?

 Recent developments in Indonesia

2019 BP Energy Outlook

7 © BP p.l.c. 2019
Annual increase in LNG exports

bcm

60

50
Other Australia Russia
40
US Qatar Total
30

20

10

-10
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2019 BP Energy Outlook
8 © BP p.l.c. 2019
Annual increase in LNG imports

bcm
Other Europe
60
China Developing Asia exc China
50
Middle East and Africa Japan
40
Total
30
20
10
0
-10
-20
-30
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2019 BP Energy Outlook
9 © BP p.l.c. 2019
Outlook for LNG
LNG imports and exports
Imports Exports

2017

2020

2030

2040

-1,000 -800 -600 -400 -200 0 200 400 600 800 1,000
Bcm BP Statistical Review of World Energy
© BP p.l.c. 2019
US LNG exporters’ costs & Asian spot prices

$/mmBtu

20
US exporters’ full-cycle costs*
US exporters’ operating costs*
16
Japan Korea Marker
Henry Hub
12

0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
* Operating costs = 1.15* Henry Hub + $2/mmBtu (transport) ; Full costs also include liquefaction fee ($3/mmBtu) BP Statistical Review of World Energy
11 © BP p.l.c. 2019
Five key questions and uncertainties

 How much ‘more energy’ does the world need?

 How will LNG transform natural gas markets?

 How quickly could renewables grow?

 A low-carbon energy system: what more needs to be done?

 Recent developments in Indonesia

2019 BP Energy Outlook

12 © BP p.l.c. 2019
Renewable energy
Renewables share of power generation Fuel shares in power

30%
50% Gas
Geothermal
Coal
25% and biomass
Renewables
40% Hydro & Nuclear
Solar
20%

Wind 30%
15%

20%
10%

5% 10%

0% 0%
1995 2010 2025 2040 2000 2010 2020 2030 2040
2019 BP Energy Outlook
13 © BP p.l.c. 2019
 Speed of energy transition
Speed of penetration of new fuels in global energy system

Share of world energy

35%
Oil (1877) Gas (1899) Nuclear (1974) Hydro (1922) Renewables (2006)
30%

25%

20%

15%

10%

5%

0%
0 10 20 30 40 50
Years from reaching 1% share
2019 BP Energy Outlook
14 © BP p.l.c. 2019
Five key questions and uncertainties

 How much ‘more energy’ does the world need?

 How will LNG transform natural gas markets?

 How quickly could renewables grow?

 A low-carbon energy system: what more needs to be done?

 Recent developments in Indonesia

2019 BP Energy Outlook

15 © BP p.l.c. 2019
CO2 emissions
CO2 emissions CO2 in 2040: ET vs RT scenario
Gt of CO2 Gt of CO2
40 40
Evolving transition

Rapid transition 30
30

20
20

10
10

Power
ET 2040

RT 2040
Industry &

Transport
Buildings
0
1965 1980 1995 2010 2025 2040
2019 BP Energy Outlook
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Global power sector fuel mix

Share
50%

40%

30%

20%
Coal Non-fossil Gas & oil
10%

0%
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

BP Statistical Review of World Energy

17 © BP p.l.c. 2019
Five key questions and uncertainties

 How much ‘more energy’ does the world need?

 How will LNG transform natural gas markets?

 How quickly could renewables grow?

 A low-carbon energy system: what more needs to be done?

 Recent developments in Indonesia

2019 BP Energy Outlook

18 © BP p.l.c. 2019
Indonesian energy demand and fuel mix
Energy demand Fuel mix

%per annum

6% 70%

5% 60%

4% Oil 50%

3% Gas 40%

2% Coal 30%

1% Non-fossil 20%

0% 10%

-1% 0%
2007-17 2018 1985 1990 1995 2000 2005 2010 2015

BP Statistical Review of World Energy

19 © BP p.l.c. 2019
Indonesian power sector: demand and fuel mix
Power sector fuel mix
Power demand per capita
(watts per person)
600 70%
Oil Gas
500 60% Coal Hydro
Indonesia
(2011) Renewables
50%
400
China
(2009) 40%
300
Malaysia 30%
200 (1985)
20%
100
10%
0
0 5 10 15 20 0%
1990 1994 1998 2002 2006 2010 2014 2018
Years from per capita income of
approximately $9500 BP Statistical Review of World Energy
20 © BP p.l.c. 2019
Spencer Dale
Group chief economist
Demand for oil and other liquid fuels
Liquids demand Liquids demand growth

Mb/d Mb/d, average annual growth

140 2.0
Power Buildings Power
Industry Non-combusted
120 Non-road Trucks Buildings
Cars 1.5 Industry
100 Non-combusted
Transport
1.0
80 Total

60 0.5

40
Transport 0.0
20

0 -0.5
2010 2015 2020 2025 2030 2035 2040
22
2005- 2010- 2015- 2020- 2025- 2030- 2035-
2010 2015 2020 2025 2030 2035 2040
2019 BP Energy Outlook
© BP p.l.c. 2019
Demand and supply of oil

Mb/d
140
Evolving transition
More energy
120 Greater reform
Single-use plastics ban
100 Less globalization
Rapid transition
80 Supply with no investments in new fields

60

40

20

0
1970 1980 1990 2000 2010 2020 2030 2040

2019 BP Energy Outlook

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Hard-to-abate carbon emissions
CO2 emissions in RT scenario in 2040

Gt of CO2 Decarbonise power sector

20 • Renewables
• Gas (and coal) plus CCUS
• Energy storage and demand-side-response
16
Buildings
Other low-carbon energy sources and carriers
• Hydrogen
12 Industry
• Bioenergy
Transport
8 Efficiency
Power • Circular economy
• Process efficiency
4
Storage and removal of carbon
• CCUS
0 • Negative emission technologies, eg land carbon,
bioenergy with CCS (BECCS)

2019 BP Energy Outlook

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Alternative scenario: Less globalization
Difference relative to ET scenario in 2040: Net exports (oil & gas)
Global GDP and energy
Mtoe
GDP Energy 0
1% ET
China
-300
0% Less
globalization
-600
-1%
-900
-2%
2000 2010 2020 2030 2040
-3%
600
-4% US
300
-5% 0
Renewables Coal
Gas Oil -300
-6%
Total -600
-7% -900
2000 2010 2020 2030 2040
2019 BP Energy Outlook
25 © BP p.l.c. 2019