Global Opportunities for Energy Security Presentation By R S Butola MD ONGC Videsh Limited
Dec 26, 2015
Global Opportunities for Energy Security
Presentation
By
R S ButolaMD ONGC Videsh Limited
Energy Security
The Umbrella Term
Source; CERA
Dimensions of the Energy Security
• 1970s: -Arab Embargo and the Iranian Revolution
• 1990s: -Environmental problem: Climate change-Liberal Democracy and Market Capitalism
• 2000 ….. -Nationalist fervor / Extremist threat emerging
Parallelly-Unparallel demand growth-Sustainable Development- Alternate fuels/resources are in embryonic stage
Energy enters domain of Geo-politics & Security becomes the concern
Energy Issue Map
Source; World Economic Forum 2006
The Impact
Source; IMF & CERA
Oil Price Spikes & Global Economic Growth
The Opportunity
Source; IMF & CERA
Oil Intensity of Global Economy
The case of energy: World primary energy demand by fuel
(source: IEA)
0
1000
2000
3000
4000
5000
6000
7000
1970 1980 1990 2000 2010 2020 2030
Mto
e
Coal Oil Gas Nuclear Hydro Other
Fossil Fuels; Coal, Oil & Gas to remain the main sources of Energy
Share of Gas would increase in the futureSource; IEA
34%
22 %
10%
7%3%
35%
27 %
21%
11%
5%2%
The Changes
• Demand Centre
• Supply Centre
• Geo-Politics
• Resource as a Tool
• The New Engagements
Refined Products Demand
Changes by region 2005-2015
Source; CERA
The World Population
Source; EXXON
From 6.53 billion in 2006 to 8.0 billion in 2030
Structural Changes
Oil Production Capacities Increases
15 Countries dominate long term Oil Supply Growth
In million barrels per day
Source; CERA
Supply Corridors (Mostly West wards)
International LNG Trade: Connecting Markets
Surplus Capacities are Decreasing
Source; IMF & BP
Future Oil Consumption
India: Oil Consumption
4.1%
3.3% 3.3% 3.3%
2.4%2.2%
2.0% 1.9%1.7%
1.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
BP Stats data for past oil consumption; EIA, International Energy Outlook 2003
CAGR 2001-2025 ~ 4.1%
Past Oil Consumption
119108
8491
97100 100
104
6775
81
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
(MMT)
CAGR 1995-2004 ~ 6.1 %
0
50
100
150
200
250
300
350
400
'97-
98
'98-
99
'99-
00
'00-
01
'01
- 02
'02
- 03
'04-
05
'06-
07
'11-
12
'24-
25
India prodn. India consmpn
Widening Oil Demand in India
Source: PPAC & IHV 2025
(MMT)
Consumption
Production
Widening Gap
Year Ending March 31
Production Consumption Gap %
Self S.
1998 33.86 90 56.7 37.4
1999 32.72 97.1 64.3 33.7
2000 31.95 100 68.1 31.9
2001 32.43 100.4 67.6 32.4
2002 32.03 104.1 71.9 30.7
2003 33.04 108.1 75.1 30.6
2005 34.00 119 85.0 29.0
2007 173.00
2012 240.00
2025 364.00
Troubled Middle East
Unapproachable Middle East
North & South America South
East Asia
Russia
& FSU Africa
Areas not Available for Business
Possible Indian PieINTERNATIONAL INDUSTRY PLAYERS
INTERNATIONAL PETROLEUM INDUSTRY ENVIRONMENT
Unexplo
red /F
rontie
r
Areas
Geo
-Po
liti
cs
Car
tels
& T
rad
e B
lock
s
Imbalances
Mar
ket
Str
uct
ure
& D
ynam
ics
HOW BIG COULD BE AN INDIAN PIE (Opportunities)
Vietnam 3
Myanmar 2
Sudan 3
Nigeria 1 in JDZ
Libya 3
Egypt 1 Syria 1+1
Iraq 1
Russia 1
Iran 1
Our International Presence
Producing Assets Development Exploration
Cuba 2
Qatar 1
OVL has 24 Projects (36 Blocks) in 14 Countries
OperatorIran, FarsiIraq, Bl 8Qatar, Na NjVietnam 127Vietnam 128Cuba 34 Cuba 35Libya 81-1
Joint OperatorSudan GNOPEgypt Bl. 6
Brazil
By 27th July OVL has contracted 21 Projects (32 Blocks)
Nigeria 2
The Issues
• Energy Security and its Forms• Government - Role & Influence• Compete or Collaborate• Harnessing Interdependencies
– Cris-cross Investments– Buyer-Seller Engagements
• Technology Alliances– NOC and IOC– Up-gradation
• Securing the flow of Energy– Collaborative Energy Corridors
• Alternate Energy Sources• Market - The ultimate Arbiter• Promoting Investments
The Approach
• Pursue an Integrated Energy Policy
– Harness vast Coal, Hydel resources to generate power
– Realize Nuclear power potential
• Accept the reality that despite growth of alternate fuels, oil would continue to be main transportation fuel
• Access to hydrocarbon resources is a key ingredient of Energy Security
• Promote investments by Indian Companies
– Proactive role of Government
– Empowerment and enabling framework for companies
• Explore and Develop Interdependencies
– Economic Packaging
– Leveraging Market Access
• Strengthen the flow; Pipelines - Infrastructure
Thank You