dr. fatih birol chief economist head, economic analysis division international energy agency / oecd...
TRANSCRIPT
Dr. Fatih BirolChief Economist Head, Economic Analysis DivisionInternational Energy Agency / OECD
WORLDENERGYINVESTMENTOUTLOOK
Global Strategic Challenges
Security of energy supplies
Threat of environmental damage caused by energy use
Uneven access of the world’s population to modern energy
Investment in energy-supply infrastructure
Global Energy Investment Global Energy Investment OutlookOutlook
World Energy Investment2001-2030
Total investment: 16 trillion dollars
Oil 19%
Electricity60%
Coal 2%Gas 19%
OtherRefining
E&D 72%
13%15%Other
Refining
E&D 72%
13%15%
E&D
LNG Chain
T&D and Storage
55%
37%
8%
E&D
LNG Chain
T&D and Storage
55%
37%
8%
Power generation
T&D54%
46% Power generation
T&D54%
46%
Mining
Shipping and ports
12%
88% Mining
Shipping and ports
12%
88%
Production accounts for the majority of investment in the supplychain – except for electricity
Energy Investment by Region 2001-2030
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
OECD
North
America
China OECD
Europe
Other Asia Africa Russia Middle East OECD
Pacific
Other Latin
America
India Other
transition
economies
Brazil
cum
ulat
ive
inve
stm
ent (
billi
on d
olla
rs)
0
5
10
15
20 share in global investment (%
)
OECD Europe will account for around 15% of global energy investment needs of $16 trillion
Energy Investment Share in GDP2001-2030
0 1 2 3 4 5 6
OECD
Latin America
Other Asia
India
China
Middle East
Other transition economies
Africa
Russia
per cent
World average
The share of energy investment in the economy is much higher in developing countries and the transition economies than in the OECD
Global Oil Investment Global Oil Investment
World Oil Production
0
20
40
60
80
100
120
1980 1990 2000 2010 2020 2030
mb/
d
OPEC - Middle East OPEC - Other
Non-OPEC Non-conventional oil
OPEC countries – mainly in Middle East – will account for almost all the increase in world oil production to 2030
World Oil Investment
0
200
400
600
800
1,000
1,200
2001-2010 2011-2020 2021-2030
billi
on d
olla
rs
Exploration & development Non-conventional oil GTL
Refineries Tankers Pipelines
Upstream will continue to dominate oil investment, but the shares of tankers and GTL increase over projection period
Oil Investment by Region
Most investment outside the OECD will be needed in the Middle East and the transition economies – mainly in the upstream
0 5 10 15 20 25 30 35
OECD
Middle East
Transition economies
Africa
Latin America
Asia
billion dollars per year
Exploration & development Non-conventional oil Refineries
Oil Production and Capacity Additions
0
50
100
150
200
250
2000 2030 2001-2030
mb/
d
Production Expansion to meet demand growth Replacement to maintain capacity
The bulk of additions to crude oil production capacity will be needed simply to maintain capacity
Investment Uncertainties Investment Uncertainties & Challenges& Challenges
Uncertainties & Challenges
Opportunities and incentives to invest Oil prices and rates of return Investment regime and risk
Access to reserves Role of NOCs Restrictions on foreign investment
Licensing, fiscal and commercial termsEnvironmental regulations and ethical concerns
Demand-side impact Impact on access to reserves and drilling costs
Remaining resources and technology Iraqi production prospectsMiddle East production and investment policies
Global Upstream Oil and Gas Investment & Crude Oil Price
0
50
100
150
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
billi
on d
olla
rs
0
5
10
15
20
25
30
35
$/barrel
Investment WTI price (right axis)
Upstream investment is sensitive – with a lag of a year or so – to movements in oil prices
Access to Oil Reserves
National companies only (Saudi Arabia,
Kuwait, Mexico)35%
Limited access - National
companies 22%
Production sharing
12%
Concession21%
Iraq10%
1,032 billion barrels
Access to much of the world’s remaining oil reserves is restricted
Iraq Oil Investment Scenarios
0
10
20
30
40
50
60
2 3 4 5 6 7 8 9 10
production (mb/d)
cum
ula
tive
inve
stm
en
t (b
illio
n d
olla
rs)
Restoration of production capacity Slow production expansion
Reference Scenario Rapid production expansion
2010
2010
2010
20202020
20202030
2030
2030
0
10
20
30
40
50
60
2 3 4 5 6 7 8 9 10
production (mb/d)
cum
ula
tive
inve
stm
en
t (b
illio
n d
olla
rs)
Restoration of production capacity Slow production expansion
Reference Scenario Rapid production expansion
2010
2010
2010
20202020
20202030
2030
2030
Iraq will need to invest around $5 billion to raise oil production capacity to almost 4mb/d by 2010 in the Reference Scenario
Restricted Middle East Oil Restricted Middle East Oil Investment ScenarioInvestment Scenario
Restricted Middle East Oil Investment Scenario
OPEC Middle East Share in Global Oil Supply
0
10
20
30
40
50
1970 1980 1990 2000 2010 2020 2030
per c
ent
Restricted Investment Scenario Reference Scenario
OPEC Middle East’s share of global oil production is assumed to remain flat at under 30% in Restricted Investment Scenario
OPEC Oil Revenues, 2001 - 2030 Restricted Investment vs Reference Scenario
6,000
8,000
10,000
12,000
OPEC OPEC Middle East
billi
on d
olla
rs
Reference Scenario Restricted Investment Scenario
Oil revenues in OPEC Middle East producers are substantially lower in the Restricted Investment Scenario
Oil Concluding Remarks
Global investment of $3 trillion needed in 2001-2030 Investment more sensitive to decline rate than rate of
demand growth – most investment needed just to maintain current production level
Major uncertainties about opportunities and incentives to invest, notably Access to reserves and production policies – OPEC (and Iraq) Oil prices Production costs and investment risks
Lower investment in Middle East oil would raise global investment needs, lower OPEC revenues & harm global economy
Enhanced consumer-producer dialogue to help facilitate capital flows
Natural Gas Investment Natural Gas Investment OutlookOutlook
Gas E&D Investment & Incremental Production
2001 - 2030
Middle East 8%
OECD48%
Othe20%
Transition economies
15%
Africa9%
Africa17%
Middle East23%
Other32%
OECD10%
Transition economies
18%
E&D Investment Incremental Production
$ 1.7 trillion 2,767 bcm
Middle East 8%
OECD48%
Othe20%
Transition economies
15%
Africa9%
Africa17%
Middle East23%
Other32%
OECD10%
Transition economies
18%
E&D Investment Incremental Production
$ 1.7 trillion 2,767 bcm
OECD countries will account for almost half total upstream gas investment, but only 10% of additional production
Net Inter-regional Trade & Production
0
600
1,200
1,800
2,400
3,000
3,600
4,200
4,800
5,400
2001 2010 2020 2030
bcm
Production LNG trade Pipeline trade
A growing share of gas will be traded between regions, much of it in the form of LNG
LNG Shipping Fleet
0
50
100
150
200
250
300
350
400
in operation (2001) additions 2002-2030
num
ber o
f shi
ps
Liquefaction project developers LNG buyersOil & gas companies Ship ownersProjected
On orderin 2001}On orderin 2001}
A 6-fold increase in LNG trade between 2002 and 2030 will call for massive investment in new carriers
Indicative LNG Unit Capital Cost
0
100
200
300
400
500
600
700
Mid-1990s 2002 2010 2030
dolla
rs p
er to
nne
of c
apac
ity
Liquefaction Shipping Regasification
The recent dramatic fall in LNG costs is expected to continue
Levelised Cost of LNG Imports into US Gulf Coast
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Trinidad Nigeria Venezuela Egypt Qatar
$/M
Btu
Upstream Liquefaction Shipping Regasification
Henry-Hub average price, 1998-2002
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Trinidad Nigeria Venezuela Egypt Qatar
$/M
Btu
Upstream Liquefaction Shipping Regasification
Henry-Hub average price, 1998-2002
Lower capital costs are making LNG imports more economic – and more competitive with domestic supply projects
Gas Investment Uncertainties
Balance of risk and return – price is key
Complexity of financing very large-scale projects – especially in developing countries
Access to reserves and fiscal regime – most new investment will be private
Impact of market reforms on investment risk – long-term contracts will remain necessary
These factors could lead to shortfall in investment, supply bottlenecks and higher prices in some cases
Electricity Investment Electricity Investment OutlookOutlook
Electric ity Sector Investment by Region
2001-2030
China will need more electricity investment than any other country or region
0
500
1,000
1,500
2,000
2,500
China Other
Asia
Latin
America
Africa Middle
East
US and
Canada
European
Union
OECD
Pacific
Other
OECD
Russia Rest of
TE
billi
on d
olla
rs
0
500
1,000
1,500
2,000
2,500
China Other
Asia
Latin
America
Africa Middle
East
US and
Canada
European
Union
OECD
Pacific
Other
OECD
Russia Rest of
TE
billi
on d
olla
rs
Average Age of Power Plants Average Age of Power Plants in the OECDin the OECD
0
200
400
600
800
1,000
<20 years >20 years
GW
Fossil Nuclear
U.S. Privately Owned Utilities Profit Margin
0%
2%
4%
6%
8%
10%
12%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Profit margins have fallen sharply in recent years
Electricity Investment Uncertainties
in US Investment needs will increase over next 3 decades
Demand growth of 1.6% Many old plants – including most nuclear reactors – will be retired Shift to higher unit cost renewables Tightening reserve margins
Gas prices and capital costs of coal stations & renewables are key drivers of future investment in generation
Wind power will be primary renewable source – calling for investment in voltage regulation & network reinforcement
New capacity investment may be delayed as investors wait to see what environmental policies – including possible climate action – are enacted
Higher investment costs for new capacity may delay decommissioning of old plants and raise emissions
0
200
400
600
800
1,000
1,200
1971-1980 1981-1990 1991-2000 2001-2010 2011-2020 2021-2030
GW
Power Generation Capacity Additions in Developing Countries
1971-2000
Developing countries will need to add increasing amounts of new generating capacity over the next three decades
Electricity Investment as Share of GDP
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
OECD China India Indonesia Russia Brazil Africa
1991-2000 2001-2010
Medium-term electricity sector investment needs will increase relative to GDP in almost all non-OECD regions
Power Sector Private Investment in Developing Countries
0
5
10
15
20
25
30
35
40
45
50
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
billi
on d
olla
rs
Developing countries will need to reverse the slump in private capital flows if projected investment is to be forthcoming
Energy Investment Challenge
Total investment requirements are modest relative to world GDP, but challenge differs by region
Energy and financial resources are sufficient, but increasing competition for capital and higher risk
Capital needs are largest for electricity
Half total energy investment is needed in developing countries – where financing will be hardest
Production accounts for the bulk of investment – more than half just to replace old capacity
Broader Policy Implications: “Wake-Up Call” for Governments
Increasing emphasis on creating right enabling conditions – and lowering barriers to investment
Less direct intervention as lender or ownerGovernments should monitor and assess the need to
adjust regulatory reforms in network industries Policymakers need to ensure basic principles of good
governance are applied and respected – including cost-reflective pricing
Fiscal and regulatory incentives to develop advanced technologies – carbon sequestration, hydrogen, fuel cells, advanced nuclear reactors, etc. – could speed their deployment and dramatically alter energy investment patterns and requirements to 2030