report on the 2013 - regjeringen.no · 2014-12-01 · global oil demand forecast to rise to 96.7...

© OECD/IEA 2013 © OECD/IEA 2013

Report on the 2013 MTOMR

Oslo Oil & Gas seminar 17 September 2013

© OECD/IEA 2013

Overview

© OECD/IEA 2013

A new leaf in spare capacity history

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

mb/d Medium-Term Oil Market Balance

Implied OPEC Spare Capacity World Demand Growth World Supply Capacity Growth

© OECD/IEA 2013

Prices - Futures

70

80

90

100

110

120

Jun 12 Sep 12 Dec 12 Mar 13 Jun 13

$/bblCrude Futures

Front Month Close

NYMEX WTI ICE Brent

Source: ICE, NYMEX889092949698

100102

M1 2 3 4 5 6 7 8 9 10 11 12

$/bblNYMEX WTI & ICE Brent

Forward Price Curves

NYMEX WTI ICE Brent

Source: ICE, NYMEX

21 June 2013

© OECD/IEA 2013

Both Brent and WTI in backwardation

Prices - Futures

-6-4-202468

10

Jun 12 Sep 12 Dec 12 Mar 13 Jun 13

$/bblCrude Futures

Forward Spreads

WTI M1-M12 Brent M1-M12

Source: ICE, NYMEX

Backwardation

© OECD/IEA 2013

New map, new challenges

Crude Exports in 2018 and Growth in 2012-18 for Key Trade Routes*(million barrels per day)

* Excludes Intra-Regional Trade

3.1(-0.6) 3.9

(-0.9)0.3(-0.8)

2.91.6 (0.3)

1.2 (+0.4)-0.3

1.51.7 (+0.8)(-1)

0.5(+0.4)

0.5Red number in brackets denotes growth in period 2011-18 (+0)

6.2(+0.8)

Other Asia

China

OECD Europe

1.3(-0.3)

1.4 (+0.7)OECD Pacific

0.3 (+0.1)

0.7(+0.3)

2.9 (-1.4)

NorthAmerica

© OECD/IEA 2013

Demand: non-OECD leaps ahead

Global demand up 6.9 mb/d, to 96.7 mb/d Non-OECD + 8.4 mb/d OECD - 1.5 mb/d

Global Oil Demand Growth

-5.0%

-2.5%

0.0%

2.5%

5.0%

7.5%

2000 2004 2008 2012 2016OECD Non-OECD

© OECD/IEA 2013

Supply: West Side story

-1.0

-0.6

-0.2

0.2

0.6

1.0

1.4

1995 1998 2001 2004 2007 2010 2013 2016

mb/d Non-OPEC Supply - Yearly Change

NAM LAM OECD EUR FSU China

Africa PG & Biofuels Other Non-OPEC Total

© OECD/IEA 2013

Brave new world of refining Global CDU capacity seen up by 9.5 mb/d by 2018; refining

capacity gets more sophisticated

China45%

Other Asia14%

Latin America

14%

Middle East22%

Other5%

Regional Share of CDU Expansions

China leads CDU additions

© OECD/IEA 2013

From the new oil map to the new supply chain

© OECD/IEA 2013

Demand

© OECD/IEA 2013

Oil consumption: recent history

Global Oil Demand, mb/d

0

25

50

75

100

2000 2002 2004 2006 2008 2010 2012OECD, Americas OECD, EuropeOECD, Asia Oceania Non-OECD

© OECD/IEA 2013

Volatile past

Global Demand Growth

-7%

0%

7%

2000 2003 2006 2009 2012

OECD, Americas OECD, EuropeOECD, Asia Oceania Non-OECD

© OECD/IEA 2013

Growth forecast to be dominated by the continued rise of non-OECD

Global Oil Demand Growth

-5.0%

-2.5%

0.0%

2.5%

5.0%

7.5%

2000 2004 2008 2012 2016OECD Non-OECD

© OECD/IEA 2013

Global oil demand forecast to rise to 96.7 mb/d by 2018

Global Oil Demand, mb/d

0

25

50

75

100

2006 2008 2010 2012 2014 2016 2018OECD, Americas OECD, EuropeOECD, Asia Oceania Non-OECD

© OECD/IEA 2013

The more robust non-OECD forecast underpinned by stronger GDP growth

Non-OECD: Oil Product Demand, kb/d

0

20 000

40 000

60 000

2008 2010 2012 2014 2016 2018LPG Naphtha GasolineJet/Kerosene Gasoil Fuel OilOthers

Non-OECD: Demand & GDP Growth, %

2

4

6

8

2008 2010 2012 2014 2016 2018Oil Demand GDP

© OECD/IEA 2013

China to lead global growth… … but momentum slows through the forecast

Chinese Oil Demand

4

6

8

10

12

1998 2002 2006 2010 2014 2018

mb/d

5%

7%

9%

11%

13%

Share of the World

China: Oil Demand & GDP Growth

-4.0%

0.0%

4.0%

8.0%

12.0%

16.0%

2002 2006 2010 2014 2018Oil Demand GDP

© OECD/IEA 2013

Closely followed by India… … supported by country’s robust demographics

India: Oil Demand & GDP Growth, %

0

3

6

9

12

2008 2010 2012 2014 2016 2018

Oil Demand GDP

India: Oil Product Demand, kb/d

0

1,500

3,000

4,500

2008 2010 2012 2014 2016 2018LPG Naphtha GasolineJet/Kerosene Gasoil Others

© OECD/IEA 2013

Growth will increasingly move beyond the BRIC’s… as faster income growth supports more rapid demand expansion

Global Demand Growth, kb/d

-1 000

0

1 000

2 000

2010 2012 2014 2016 2018

OECD BRICS Non-BRICS

© OECD/IEA 2013

OECD in the midst of long-term structural decline

OECD: Oil Product Demand, kb/d

0

10,000

20,000

30,000

40,000

50,000

2008 2010 2012 2014 2016 2018LPG Naphtha GasolineJet/Kerosene Gasoil Fuel OilOthers

OECD: Oil Demand & GDP Growth, %

-5

0

5

2008 2010 2012 2014 2016 2018

Oil Demand GDP

© OECD/IEA 2013

Even the transport sector offers possibilities for non-oil products

Non-Conventional Road Transport Demand

0.0%

2.0%

4.0%

6.0%

1990 2000 2010 2015 2018

Natural gas LPG Others

Natural Gas Vehicles, million

0

3

5

8

10

1995 2000 2005 2010Pakistan Iran Argentina Brazil Italy

© OECD/IEA 2013

Overall close to 7 mb/d of additional demand forecast, 2013-2018… … but numerous risks remain

World: Oil Product Demand, mb/d

0

25

50

75

100

2008 2010 2012 2014 2016 2018LPG Naphtha GasolineJet/Kerosene Gasoil Others

World: Gasoline & Gasoil Demand Growth, kb/d

-250

0

250

500

750

1,000

2006 2008 2010 2012 2014 2016 2018

Gasoline Gasoil

© OECD/IEA 2013

Supply

© OECD/IEA 2013

Iraq and North America lift supply Production capacity forecast to grow by 8.4 mb/d

Iraqi capacity provides

20% of liquids growth

North American oil

sands and light tight oil

(LTO) provide 40%

High prices unlocking

non-OPEC supplies while

OPEC capacity growth is

constrained

1.8 1.02.8

2.3

2.3

0.6

1.4

2.00.5

2.4

6.0

8.4

0

2

4

6

8

10

OPEC* Non-OPEC Total

mb/d Global Liquids Growth 2012-18

Crude US Light Tight OilNGLs Non-ConvBiofuels Processing Gain

* OPEC crude is capacity additionsGlobal Refinery processing gains included in Non-OPEC

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

2013 2014 2015 2016 2017 2018

mb/d World Oil Supply Capacity Growth

OPEC Crude Capacity GrowthOPEC NGLs GrowthGlobal Biofuels GrowthNon-OPEC Growth (ex Biofuels)

© OECD/IEA 2013

Price rise drives increase in capex

Tight oil capital expenditures double to 14% of total

capex by 2018

Brazil drives growth in deepwater spending

Capex in non-OPEC countries grows strongly

Tight oil, deepwater spending to increase

Oil Sands

Deepwater

Tight Oil

-

100

200

300

400

500

600

0%10%20%30%40%50%60%70%80%90%

100%

2004 2006 2008 2010 2012 2014 2016 2018 2020

$Bill

ion

Shar

e of

Cap

ex (%

)

Annual Capex by Oil Type

22%16%

7%14%

Total Capex (RHS)

Source: IEA Analysis of Rystad Energy. Oil deposits only.

Other

0

500

1000

1500

2000

2500

3000

2003-2008 2008-2013 2013-2018

Bill

ion

USD

Cumul. Capex: Three Time Periods

Other OPEC Iraq US Other Non-OPECSource: IEA Analysis of Rystad Energy. Oil deposits only.

© OECD/IEA 2013

North America dominates Non-OPEC supply growth

12401050

510

250 230 200 140 140 100 100 40 40

-20 -20 -20 -50 -80 -90 -100-110-120-140-160- 200

200

600

1 000

1 400kb/d Selected Sources of Non-OPEC Growth/Decline (2012-18)

Non-OPEC supply to grow by 6.0 mb/d**Not shown: US supply to grow by 2.8 mb/d

-1.0

-0.6

-0.2

0.2

0.6

1.0

1.4

1995 1998 2001 2004 2007 2010 2013 2016

mb/d Non-OPEC Supply - Yearly Change

NAM LAM OECD EUR FSU China

Africa PG & Biofuels Other Non-OPEC Total

© OECD/IEA 2013

New fields mitigate N. Sea Declines

Development drilling, regulatory predictability help

raise outlook for North Sea supplies.

-0.4

-0.1

0.3

0.6

0.9

1.2

1.5

-1.0-0.50.00.51.01.52.02.53.03.54.0

2011 2012 2013 2014 2015 2016 2017 2018

North Sea Oil Production

Other Norway UK Ann. Growth (RHS)mb/dmb/d

3.03.1 MTOMR '12

© OECD/IEA 2013

Greenfields, condensate offset brownfield declines in Russia

8.87.3

1.22.5

0.7 1.0

-0.5%0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%

0

2

4

6

8

10

12

2010 2011 2012 2013 2014 2015 2016 2017 2018

mb/d Russian Liquids Production

Brownfields Greenfields NGLs % chg (RHS)

Secondary recovery, hydraulic fracturing reducing decline rate at brownfields.

Shale oil production challenged but high promise

0 20 40 60

Duvernay - CA

Mid. Magdalena - CO

Ghadames - LI

Eagle Ford - MX

Canning - AU

Junggar Basin - CH

Songliao Basin - CH

Maracaibo - VZ/CO

Sirte Basin - LI

Bazhenov N. - RF

Neuquen Basin - AR

Bazhenov Cent. - RF

US

Technicaly Recoverable Shale Oil Resources - Selected Basins

Source: For US: EIA , Other: EIA/ARI (2013)

Shale Tight

© OECD/IEA 2013

Brazil’s Santos Basin to drive growth

Brazil expected to add 1.0 mb/d by 2018 Pre-salt share grows from 7% to 40% by 2018.

-150-100-50

050

100150200250300

2008 2010 2012 2014 2016 2018

Brazil Crude Production Growth by Basin

Campos BasinSantos BasinOtherBrazil Crude

© OECD/IEA 2013

Transport challenges constrain Canada’s output growth

US tight oil growth reduces appetite for synthetic crude oil

Oil sands output to grow by 1.3 mb/d

0.00.10.20.30.40.50.60.70.80.91.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2011 2012 2013 2014 2015 2016 2017 2018

Canadian Oil ProductionNGLs OtherAlberta L&M SyncrudesBitumen Ann. Growth (RHS)

mb/dmb/d

5.0

3.7

© OECD/IEA 2013

US tight oil grows by 2.3 mb/d by 2018

LTO growth limited by: labor, capital constraints, takeaway capacity

Fractionation capacity additions boost NGL supply by 770 kb/d

Labor, infrastructure most acute constraints

4.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2007 2009 2011 2013 2015 2017

US Oil ProductionOther Crude & Cond.

Other Liquids*9.1

11.9

Light Tight Oil

*Includes additives and oxygenates. Does not include biofuels

Forecast

NGPLs

mb/d

1.7

© OECD/IEA 2013

Bakken boom likely to last

0

20

40

60

80

100

0 200 400 600 800Cumulative Production (Million barrels)

Supply Curve: Bakken Breakeven Price *Bakken/Clearbrook weekly prices ranged from USD 72-111/bbl over the last 2 years. Realized price ranges up to USD10/bbl lower than Clearbrook.

Source: Rystad Energy. Wedge+base breakeven price. *Wedge breakeven is the exact price at which the asset's new production is commercial (or positive NPV)

USD/bbl

Production at risk at USD60/bbl realized

Around 5-10% of current Bakken producition at risk when realized prices drop to $60/bbl

© OECD/IEA 2013

Will this happen elsewhere…?

Tight Shale (Barnett,

Tuscaloosa)

Fractured Shale

(Monterey, Bakken, Niobrara)

Hybrid Shale

(Bakken, Niobrara,

Eagle Ford)

Thickness

Depth

Organic Content Porosity/Permeability

Mineralogy

Diagrams adapted from Bernstein Research

Why in the US?

Technology

Financing availability & corporate structure

Policy

Known geology

Viable transport and market options

© OECD/IEA 2013

…yes, but slowly

Source: McKinsey and Company, with permission

1 Flags based on most advanced basins in China (Sichuan basin) and Australia (Cooper basin). Other basins in both countries are still at the land acquisition stage

2 Algerian government has announced its intention to begin shale gas exploration with help from international players SOURCE: McKinsey oil and gas practice; Expert interviews; CST analysis

REQUIREMENTS 1. Regulatory 2. Land Access 3. Commercial Terms 4. Water 5. New corp. mentality

© OECD/IEA 2013

OPEC capacity forecast cut by 750 kb/d

Project delays, heightened risk, unattractive investment terms reduce outlook

33.00

34.00

35.00

36.00

37.00

38.00

2012 2013 2014 2015 2016 2017 2018

mb/d OPEC Crude Oil Production Capacity

October 2012 May 2013

© OECD/IEA 2013

OPEC capacity growth scaled back Iraq, UAE, Saudi Arabia offset Iranian decline

MTOMR 2013 lowered due to recent wave of political instability/ security challenges and unattractive contract terms

-1.2 -0.8 -0.4 0.0 0.4 0.8 1.2 1.6 2.0

IranSaudi Arabia

EcuadorQatar

AlgeriaKuwait

VenezuelaLibya

NigeriaUAE

AngolaIraq

mb/d

Incremental OPEC Crude Production Capacity 2012-18

© OECD/IEA 2013

Saudi Arabia lifts capacity by 1.45 mb/d

Aramco to keep production capacity in 12.2-12.5 mb/d range

11.00

11.50

12.00

12.50

2012 2013 2014 2015 2016 2017 2018

mb/d Saudi Arabia Crude Oil Production Capacity

October 2012 May 2013

Planned Year kb/dManifa 1 2013 500Manifa 2 2014 400Khurais 2016 300Shaybah 2016 250Total 1,450Future PotentialZuluf ? 900Safaniya ? 700Berri ? 300Total 1,900

Saudi Project Developments

© OECD/IEA 2013

Bureaucracy, difficult operating conditions scale back Iraq forecast

…But still expected to grow by 1.6 mb/d to 4.8 mb/d

2.52.9 3.2

3.54.1 4.3 4.4 4.6 4.8

0.0

1.0

2.0

3.0

4.0

5.0

2010 2011 2012 2013 2014 2015 2016 2017 2018

mb/dIraq Production

Breakdown by region

Southern Area Central & Northern KRG

Source: MEES. Iraq Integrated National Energy Strategy

© OECD/IEA 2013

Outlook TAKEAWAYS:

High growth in non-OPEC supplies in next couple years

Regionally concentrated in North America, US LTO boom to last in medium term

Technology that unlocked US LTO applied elsewhere

BUT, Middle East production growth (OPEC & Non-OPEC) subject to heightened risk factors (Iran, Syria)

Security concerns in OPEC N. Africa (Libya, Algeria)

KEY UNCERTAINTIES:

Iran: Longevity of sanctions regime

Syria: “More a war in Syria than a Syrian war"

Price: Oil/Gas, Inland/Coastal, OPEC/Demand

Policy

Technology development

© OECD/IEA 2013

Trends in Global Refining

© OECD/IEA 2013

Rise of the non-OECD refining titans Global CDU capacity seen up by 9.5 mb/d; refining

capacity gets more sophisticated

China45%

Other Asia14%

Latin America

14%

Middle East22%

Other5%

Regional Share of CDU Expansions

China leads CDU additions

© OECD/IEA 2013

Non-OCED will account for almost all crude distillation additions

-1.0

0.0

1.0

2.0

3.0

2012 2013 2014 2015 2016 2017 2018

mb/d Crude Distillation Additions

OECD ChinaOther Asia Middle EastLatin America Other Non-OECDNet Additions

© OECD/IEA 2013

In OECD, Europe and Asia expected to further shed refining capacity

-0.8

-0.6

-0.4

-0.2

0.0

0.2

2012 2013 2014 2015 2016 2017 2018

mb/d OECD Pacific Capacity Additions

Crude Distillation Upgrading Desulphurisation

-0.8-0.6-0.4-0.20.00.20.40.6

2012 2013 2014 2015 2016 2017 2018

mb/d OECD Europe Capacity Additions


© OECD/IEA 2013

Russia and India will be among the leading product exporters

2 800

3 800

4 800

5 800

2008 2010 2012 2014 2016 2018

kb/dRussia

Demand vs. refining capacity

Demand Capacity Crude runs

2 800

3 300

3 800

4 300

4 800

2008 2010 2012 2014 2016 2018

kb/dIndia

Demand vs. refining capacity


© OECD/IEA 2013

Global refining capacity expected to become increasingly sophisticated

30%

35%

40%

45%

50%

55%

2008 2010 2012 2014 2016 2018

World Refining SectorUpgrading Ratio

OECD Non OECD

© OECD/IEA 2013

N. American refining: focus on upgrading & desulpherisation

-0.3-0.2-0.10.00.10.20.30.40.5

2012 2013 2014 2015 2016 2017 2018

mb/d North American Capacity Additions


© OECD/IEA 2013

Latin America set to remain a magnet for product imports until end of forecast period

4.4

5.4

6.4

7.4

2006 2008 2010 2012 2014 2016 2018

mb/d

Latin AmericaDemand vs. refining capacity


© OECD/IEA 2013

Refining conclusions

CDU capacity is increasing faster than demand, margin environment could be challenging for less complex refiners

More globalised product trade as crude is refined

closer to the well head in Middle East, Russia, and North America

Changing crude slates require investment to handle

both heavier and lighter crudes

© OECD/IEA 2013

Trends in Global Inventories

© OECD/IEA 2013

Global oil inventories increased by over 200 mb in 2012

Largest component was further filling of Chinese SPR Phase-2 which rose by up to 89 mb

OECD Stocks rose by 72 mb However, non-OECD data on inventory levels and

storage capacity remain patchy

-100

-50

0

50

100

150

200

Q1 Q2 Q3 Q4

mb2012 Quarterly Identifiable Stock

Change

OECD Saudi Crude StocksChina commercial China SPR*Iranian Floating Storage Other non-OECDTotal *inferred from the gap between reported supply and imports and refinery runs

89

72

36

710

2012 Identifiable Global Total Oil Stock Change (mb)

China SPR OECDSaudi Crude Stocks China commercialOther non-OECD

© OECD/IEA 2013

Developments in Chinese strategic storage

SPR Phase-2 was likely filled by 89 mb in 2012 Total Phase-2 capacity now estimated at 245 mb, to be

completed by end-2015 Phase-3 capacity seen at 152mb to be completed by 2020

© OECD/IEA 2013

Expansions to continue apace elsewhere in Asia

CountryGovernment Held

Industry Obligation stockholding target

Cambodia no yes current obligation on industry = 30 days of consumtion

Vietnam yes yes total stocks = 16 mb, rising to 34 mb in 2015, equivalent to 73 days of consumption in 2015

Thailand no yes current obligation on industry = 36 days, strong commitment to achive 90 days of consumption in future

Myanmar yes yes 620 kb by 2025 including 180 kb product SPR.

Laos no yes current obligation on idustry = 15 days of consumtion, rising to 30 days in 2020

Indonesia no yes current obligation = 23 days of consumtion, planning to strengthen national stockholding system

Phillipines no yes current obligation on importers = 7 days of supply, current obligation on refinereies = 15 days of supply

Current and Future Stockpiling in non-OECD ASEAN Countries

Non-OECD Asia to be led by Indian SPR plans ASEAN economies embarking on ambitious government

and commercial stockholding plans OECD Asia Oceania will be led by new storage to

facilitate intra-Asian trade

© OECD/IEA 2013

Russian expansions will continue to be led by export infrastructure developments

Recent expansion driven by ESPO, BPS-2 Focus will shift from crude to product storage

© OECD/IEA 2013

African expansions to facilitate the entry of new suppliers into nascent markets

East and West African expansions concern refined products; gasoline, gasoil & LPG

North African storage concerns crude

© OECD/IEA 2013

Middle East expansion to be driven by geopolitics, refinery projects and bunkering

But Iranian tank farms expected to fall into disrepair as sanctions bite

© OECD/IEA 2013

The Caribbean to become strategically important for product trade

Country Name of Terminal Port/City Capacity OperatorAruba Aruba St. Nicolaas 12.0 ValeroBahamas BORCO Freeport 21.5 BuckeyeBahamas South Riding Point South Riding Point 6.7 StatoilCuracao Curacao Terminal Bullen Bay 17.8 PDVSABonaire BOPEC Rincon 12.0 PDVSASt. Eustatius Statia Orange Bay 13.0 NuStarPuerto Rico (US) Yabucoa Yabucoa 4.6 BuckeyeSt. Lucia St. Lucia Cul De Sac 10.0 Hess OilTrinidad & Tobago Petrotrin Point Fortin Port Fortin 3.6 PETROTRINTrinidad & Tobago Petrotrin Pointe-a-Pierr Pointe-a-Pierre 4.1 PETROTRINVirgin Islands, US Hovensa St. Croix 32.0 Hess Oil / PDVSATotal Capacity 137.3

Current Capacity at Carribean Oil Storage Terminals(million barrels)

Helped by US East Coast refinery closures and rising intra-Americas trade

Future of Hovensa refinery unclear

© OECD/IEA 2013

Storage capacity expected to increase over the medium-term

All regions expected to see increases in storage capacity Capacity increases be propelled by a diverse set of drivers,

including: Independent operators increasing tanks at trading hubs as

long-haul trade increases Increasing strategic storage in the non-OECD, notably in

China, India and ASEAN countries Increasing supplies and debottlenecking in North America The development of new trade routes eg. FSU Increasing import requirements as demand increases eg.

Africa, Asia

© OECD/IEA 2013

Global Crude trade to fall by 0.9 mb/d to 32.4 mb/d in 2018

Main drivers of change: Diminishing North American imports following increasing

domestic supply Lower refining demand elsewhere in the OECD Increased imports to China and Other Asia Increased refining close to the wellhead

Imports to non-OECD will surpass OECD in 2018

-1 500

-1 000

- 500

0

500

1 000

2012 2013 2014 2015 2016 2017 2018

kb/dRegional Crude Exports:

Yearly Change

China Other Asia Africa Latin America

Middle East FSU OECD Pacific OECD Europe

-2 000-1 500-1 000- 500

0500

1 0001 500

2012 2013 2014 2015 2016 2017 2018

kb/d Regional Crude Imports:Yearly Change

China Other Asia Africa Latin Am

Other Eur OECD Pac OECD N Am OECD Eur

© OECD/IEA 2013

North America

Supply +2.8 mb/d

Imports-2.3 mb/d

Surging North American production reduces its crude import requirement

Light and medium-light

crudes will be increasingly

backed out of the region

West African producers

will look to Asia and

Europe as key markets

Heavy crudes from Latin

America and Middle East

will still be imported by

US Gulf Coast refiners

© OECD/IEA 2013

Projected changes in US imports

2.7

1.5

1.1

0.3

2012

Middle East Latin America Africa Others

1.71.2

0.30.2

2018

Middle East Latin America Africa Others

Origin of North American Crude Imports in 2012 and 2018 (million barrels per day)

African imports will decline by 850 kb/d as light imports are

backed out

Latin American imports will slip by 300 kb/d

Middle Eastern imports will fall by 980 kb/d but its market share

will increase to 51% as imports estimated at 1.7 mb/d in 2018

© OECD/IEA 2013

Global crude trade to become more globalised Long-haul trade from the Atlantic to Pacific basins to grow in importance



3.1(-0.6) 3.9

(-0.9)0.3(-0.8)

2.91.6 (0.3)

1.2 (+0.4)-0.3

1.51.7 (+0.8)(-1)

0.5(+0.4)


6.2(+0.8)

Other Asia

China

OECD Europe

1.3(-0.3)


0.3 (+0.1)

0.7(+0.3)

2.9 (-1.4)

NorthAmerica

© OECD/IEA 2013

Demand trends and data gaps Change in fundamentals & in the supply chain affect

market risk Non-OECD growth vs market transparency Myths and reality about non-OECD data

Transparency buy-in Global governance Progress on shared definitions Domestic demand control

Capacity constraints Capacity building A double-edged sword

Statistics vs market changes Moving target Emerging economies grow more complex as they mature Growth moves on to new markets

© OECD/IEA 2013

Working around data constraints

Which data do we really need? Granularity versus selectivity Misalignment of product definitions and markets/regulations Catching up with desulfurization Crude and product quality breakdown Storage capacity

Proxies Strategic storage hubs

Resources Survey of large storage companies Regional aggregation to protect confidentiality

Going private? Company G. in Cushing, Europe refining Non-OECD next

© OECD/IEA 2013

Supply risks: was 2012 a freak year?

North Sea Sudan/South Sudan Iran Iraq Syria Libya / North Africa / West africa Venezuela LTO – Resource & price sensitivity Trade regulations

US EU

Chinese economy

© OECD/IEA 2013

Increased product trade: risks & benefits



3.1(-0.6) 3.9

(-0.9)0.3(-0.8)

2.91.6 (0.3)

1.2 (+0.4)-0.3

1.51.7 (+0.8)(-1)

0.5(+0.4)


6.2(+0.8)

Other Asia

China

OECD Europe

1.3(-0.3)


0.3 (+0.1)

0.7(+0.3)

2.9 (-1.4)

NorthAmerica

© OECD/IEA 2013

Refining winners & losers

On Average Europe is in slight over capacity comparing with 2012 demand – but the picture varies greatly by product

2/3 of countries are in over capacity position compared with their local demand

1/3 of countries are both in over capacity position and have low complexity index

European refining: country positioning

AT

BE

CZ

DK

FI

FR

DE

GR

HU

IE

IT

NL

NO

PL

PT

SK

ES

SE

SW

TR

UK

3

4

5

6

7

8

9

10

11

12

- 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50

Average Complexity

Factor

Total Products Demand / Refining Capacity

European Refining ConfigurationCountry Position vs. Average

Over Capacity

Complex

Under Capacity

Simple

EU Average

EU Average

© OECD/IEA 2013

A tale of two Europes Crude runs versus demand

1 732

1 932

2 132

2 332

2 532

2 732

Jan-07 Jan-09 Jan-11 Jan-13

kb/d Germany

Demand Crude runs

723

823

923

1 023

1 123


kb/d Netherlands

Demand Crude runs

1 176

1 376

1 576

1 776


kb/d Italy

Demand Crude runs

854

1 054

1 254

1 454

1 654


kb/d Spain

Demand Crude runs

69

119

169

219

269

319


kb/d Portugal

Demand Crude runs

0

100

200

300

400

500

600

Jan-00 Jan-03 Jan-06 Jan-09 Jan-12

kb/d Greece: Total Products Balance

Demand Refinery OutputImports Exports

© OECD/IEA 2013

Product import dependency European jet fuel imports by origin Kb/d – OECD Europe, intra-Europe vs. ex-Europe

-

100

200

300

400

500

600 ja

n-00

ju

n-00

no

v-00

ap

r-01

se

p-01

fe

b-02

ju

l-02

des-

02

mai

-03

okt-0

3 m

ar-0

4 au

g-04

ja

n-05

ju

n-05

no

v-05

ap

r-06

se

p-06

fe

b-07

ju

l-07

des-

07

mai

-08

okt-0

8 m

ar-0

9 au

g-09

ja

n-10

ju

n-10

no

v-10

ap

r-11

se

p-11

fe

b-12

ju

l-12

Intra-Europe

Ex-Europe

Incremental imports coming from outside Europe Wide swings, seasonal peak around October

© OECD/IEA 2013

Risk impact of import dependency Long haul – heightened disruption risks Longer lead times Higher storage requirements Product shelf life Location and transparency

New market participants: refiners versus traders Incentives and market risks

Price volatility Time spreads Location spreads

Product traceability Longer-term import availability amid rising non-OECD

demand Refining industry concentration and disruption risks

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