International Market. Top 50 Energy Companies by Market Capitalisation, end 2000, % Other Oil 19.3 ExxonMobil 16.6 Royal Dutch/Shell 11.7 TotalFinaElf.
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International Market
Top 50 Energy Companies by Market Capitalisation, end 2000, %
Other Oil19.3
ExxonMobil16.6
Royal Dutch/Shell11.7
TotalFinaElf6.0
BP10.0
Power &gas firms
36.4
Total$1.8tmTotal
$1.8tm
Source: Petroleum Finance Company
International “Oil & Gas Deals”
• Concession from country (10-20 years)• Structure: 40% company and 60% country• Multi-national financing, project financing,
debt financing (debt for equity swap)• World Bank, EBRD
O& G Journal - 9/25/2000
International PerspectiveDeveloped and Developing
Countries•Fossil Fuels•Climate Change•Market Economies•Political Alliances•$2 trillion/yr Global Energy Market
Energy Consumption per Head*, 1995
Source: World Energy Assessment
North America
Western Europe
Central andEastern Europe
Pacific Asia
Latin America
Sub-SaharanAfrica
South Africa
0 50 100 150 200 250 350300 gigajoules
* Includes non-commercial energy
Global Primary Energy Consumption
12,000
10,000
8,000
6,000
0
14,000
4,000
2,000OECD
Development countries
80 85 90 95 2000 05 10 15 20
Forecast
Source: International Energy Agency
Transition economies
Millio
n To
nne
s of O
il Eq
uiva
len
t
Energy issues
• Europe (Green movement/ nuclear)
• Russia/FSU (E. Europe, the “Stans” ) market share (v. OPEC)
• Latin American (opportunity)
• SE Asian (production, demand, control)
• Africa (war, politics, corruption)
Kyoto Accord Discord
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Oil Price, Supply and Demand, Inequities
• Physical constraints (pipelines, refineries)• Economic conditions (poor economy-price
increase hurts; strong economy-price increase not as significant)
• Taxes (discourage consumption; favor one fuel over another; fund gov’t services; environment)
• Developing countries may subsidize consumption to stimulate economy
• Leaders subsidize cost to stay in power (unsustainable)
World Natural Gas Reserves
• Gas is of increasing significance worldwide
• Est. 900 of the 2,000 tcf of world undiscovered gas reserves “stranded”
• New technologies/solutions: LNG, GTL
• “Clean fuels” strategies become more important world wide
LNG
• The large LNG plants are in Indonesia, Algeria, Nigeria and Trinidad. One of largest underway at Sakhalin (9.6mmt/yr)
• LNG is one way to move “stranded gas” to market. Some countries, eg. Japan, rely heavily on LNG imports.
• LNG in the US: is it economic? Environmental pros/cons; energy security/balance of payments issues
Russia
• Heavily dependent on oil revenue• Russia needs $18.50/bbl to meet its budget
obligations• Daily output of 7mmbo• Increased drilling by 50%• Govt building 2 new pipelines to Baltic and
Black seas. EU market share• Privatized energy companies• World leader in proven gas reserves• Siberia far from market
Caspian Production Potential
• Caspian reserve est: 40 billion barrels oil*
strategic location
• World reserve est: 1 trillion barrels oil
* ~4% of world reserves
O& G Journal - 8/21/2000
Tengiz Field, Caspian Region
• Permian carbonate reefs• 1000’ pay• H2S• Overpressured• Jurassic salt (great seal)
Venezuela
• Exports 50% of oil production to US• Have South America’s largest proven gas
reserves (147 tcf). Ranks 8th in world gas.• Hope to generate $1billion new investment
in (non-oil assoc) gas exploration (2001-2005) w/ international investment
• Foster domestic use of natural gas• Market LNG a goal• Economy dependent on energy revenues• Political instability?
O& G Journal - 9/25/2000
Global Energy Systems Transition
Source: GHK Company
0
20
40
60
80
100
Per
cen
t o
f M
arke
t
1997
Increasingly sustainableeconomic growth
Decentralised,less capital-intensive
technologies
1850 1900 1950 2000 2050 2100 2150
Non-sustainableeconomic growth
Centralised,capital-intensive
technologies
hydrogen
wood & hay
coal & nuclear
gase
ssolids
liquidswhale oil
oil & naturalgas liquids
oil & hydroelectric
petroleum oil
“city gas” hydrogen
natural gas
natural gas
World Consumption of End-Use Fuels, %
Coal
Renewables
Heat
Electricity
Gas
Oil
1997 2020Forecast
9,117Mtoe*
11
1
4
17
18
49
8
2
3
20
18
49
Source: International Energy Agency
5,808Mtoe
* Million tonnes of oil equivalent
End
O& G Journal - 8/21/2000
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