Industry Outlook

Neelesh NerurkarUSAEE Conference, September 2007

© BP 2007

Prices

Consumption patterns

Supply: Constraints, opportunities, and trade

Energy green and local

Key issues

© BP 2007

Energy Prices

0

50

100

150

200

250

300

350

1991 1994 1997 2000 2003 2006

Oil (dated Brent)

Gas basket

Coal basket

Weightedaverage

Index 1991=100

© BP 2007

0%

1%

2%

3%

4%

5%

6%

WorldPrim aryEnergy

OECD Non-OECD Oil Gas Coal

World Energy Consumption Growth

Average annual growthExcl. China

1996-2001

2001-2006

© BP 2007

0%

2%

4%

6%

8%

10%

World OECD FSU China Other EMEsexcl. China

2001-20061996-

2001

World Economic Growth

Average annual growth (PPP)

© BP 2007

Global GDP and Primary Energy Growth

0%

1%

2%

3%

4%

5%

6%

2002 2003 2004 2005 2006

Primary energy consumption GDP (PPP)Average annual growth

© BP 2007

Upstream costs and bottlenecks

300

400

500

600

700

800

01 02 03 04 05 06 07

Offshore Rig Rates

Source: Ecowin, Riglogix

65%

70%

75%

80%

85%

00 01 02 03 04 05 06 070

50

100

150

200

250

300

350

400

450

Utilization indexDay Rate index (rhs)

day rate index, base=Jan '00% Uti l izationUS$/tonneSteel Price Index

© BP 2007

Energy Trade

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

1981 1986 1991 1996 2001 2006

Af rica

M id-East

FSU

S& C Am erica

Europe

Asia Pacif ic

N. Am erica

Billion tonnes oil equivalent

Net inter-regional exports

Net inter-regional imports

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Reserves

0

300

600

900

1200

1500

1982 1985 1988 1991 1994 1997 2000 2003 2006

Middle East S&C America Europe & Eurasia Africa North America Asia Pacific Other Canadian oil sands

Billion barrels

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Alternatives

0

5

10

15

20

2000 2002 2004 2006

US Brazil Other

Million tonnes oil equivalent

0

10

20

30

40

50

60

70

80

90

2000 2002 2004 2006

Wind GeothermalSolar

Megawatts of installed capacity

Ethanol Production Renewable Power

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Carbon Emissions

100

105

110

115

120

125

130

135

1990 1994 1998 2002 20060.70

0.75

0.80

0.85

0.90

0.95

1.00

1.05

1971 1978 1985 1992 1999 2006

China

World

OECD

Carbon Intensity

Tonnes of carbon per tonne of primary energy use

World Carbon Emissions

Index: 1990 = 100

© BP 2007

Conclusions

Rapid energy consumption growth, led by developing countries, but some signs consumers could be adjusting

Significant supply opportunities remain and companies are responding

…but the future requires adapting to new consumer and producer nation demands

These developments are likely to take place in a carbon constrained world