BP Statistical Review of World Energy

June 2015
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Energy in 2014 –
After a calm comes the storm
Spencer Dale, group chief economist
3 key forces shaping 2014

US shale revolution

BP Statistical Review of World Energy

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Largest oil producers
Mb/d
14
US Saudi Arabia Russia
12

10

2
1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014
BP Statistical Review of World Energy

© BP p.l.c. 2015
US energy output as a share of consumption

100%

90%

80%

70%

60%
1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014
BP Statistical Review of World Energy

© BP p.l.c. 2015
3 key forces shaping 2014

US shale revolution

Rebalancing of Chinese economy

BP Statistical Review of World Energy

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Chinese GDP and energy-intensive sectors
Annual change, %
20%

10-year average
16%
2014

12%

8%

4%

0%
GDP Steel Iron Cement
Source: includes data from China National Bureau of Statistics. BP Statistical Review of World Energy

© BP p.l.c. 2015
Energy intensity in China
Change in energy intensity in China Primary energy intensity
Annual change, % Toe per thousand $2010 GDP
15% 0.8
China
10% OECD
0.6
US
5%
0.4
0%
0.2
-5%

-10% 0.0
1970 1981 1992 2003 2014 1970 1981 1992 2003 2014
Source: includes data from Oxford Economics. BP Statistical Review of World Energy

© BP p.l.c. 2015
3 key forces shaping 2014

US shale revolution

Rebalancing of Chinese economy

Continued focus on climate and environmental issues

BP Statistical Review of World Energy

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Key features of 2014
Growth in energy consumption
Annual change, %
6%

4%

2%

0%

-2%

-4%
2002 2004 2006 2008 2010 2012 2014
BP Statistical Review of World Energy

© BP p.l.c. 2015
Growth in energy consumption
Annual change, %
6%

4%

2%

0%

-2%

Energy intensity GDP Energy

-4%
2002 2004 2006 2008 2010 2012 2014
Source: includes data from Oxford Economics. BP Statistical Review of World Energy

© BP p.l.c. 2015
Fuel mix
Shares of global primary energy
50%

40%

Oil
30%
Coal

20% Gas
Hydro
10% Nuclear
Renewables
0%
1965 1972 1979 1986 1993 2000 2007 2014
BP Statistical Review of World Energy

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Change in net energy balance
Cumulative change from 2004, % of consumption
10%
OECD Non-OECD
8%

6%

4%

2%

0%

-2%

-4%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Note: energy balance is defined as energy production minus energy consumption. BP Statistical Review of World Energy

© BP p.l.c. 2015
Oil and Refining
Oil market in 2014
Consumption Production
Annual change, Mb/d
2.5
2.0
1.5
1.0
Non-OECD
0.5 Non-OPEC

0.0 OPEC
OECD
-0.5
10 year 2014 10 year 2014
average average
Note: consumption and production totals include biofuels. BP Statistical Review of World Energy

© BP p.l.c. 2015
Oil inventories and price
OECD commercial inventories
Mbbls
2850
2800
2750
2700
2650
2600
2550
2010-14 range
2500
Jan-14 Aug-14 Mar-15
Source: includes data from the International Energy Agency © OECD/IEA 2015. BP Statistical Review of World Energy

© BP p.l.c. 2015
Oil inventories and price
OECD commercial inventories Dated Brent
Mbbls $/bbl
2850 140
2800
120
2750
2700 100

2650 80
2600 Annual average
60
2550
2010-14 range
2500 40
Jan-14 Aug-14 Mar-15 Feb-11 Mar-12 Apr-13 May-14 Jun-15
Source: includes data from the International Energy Agency © OECD/IEA 2015 and Platts. BP Statistical Review of World Energy

© BP p.l.c. 2015
Refinery runs and spare capacity
Crude run growth Spare capacity growth
Annual change, Mb/d Mb/d, cumulative since 2005
1.5 10
Rest of world US World Middle East China
8 16.3%
1.0 Other non-OECD OECD
10 year 6
average
0.5 4

2
0.0
0

-0.5 -2
2011 2012 2013 2014 2006 2008 2010 2012 2014
Source: includes data from ICIS and Energy Security Analysis, Inc. BP Statistical Review of World Energy

© BP p.l.c. 2015
Crude oil differentials
Brent - WTI WTI - WCS
$/bbl $/bbl
25 50
Annual average Annual average
20 40
15
30
10
20
5

0 10

-5 0
Jan-13 Aug-13 Mar-14 Oct-14 May-15 Jan-13 Aug-13 Mar-14 Oct-14 May-15
Source: includes data from Platts. BP Statistical Review of World Energy

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Natural Gas
Global natural gas markets
Consumption growth in 2014 Natural gas spot prices
Annual change, % $/mmBtu
-12% -8% -4% 0% 4% 8% 25
Asia UK US
World
20
Middle East
North America 15
Asia Pacific
10
S. & C. America
Africa 5
Europe & Eurasia
10 year 0
of which EU average Jan-14 May-14 Sep-14 Jan-15 May-15
Source: includes data from Platts. BP Statistical Review of World Energy

© BP p.l.c. 2015
EU gas demand and impact of weather
Annual change, %
20%
Heating degree days
Gas consumption
10%

0%

-10%

-20%
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014
Source: includes data from Eurostat and IHS. BP Statistical Review of World Energy
Note: heating degree days is an indicator of the impact of temperature on space heating demand.
© BP p.l.c. 2015
Natural gas trade flows
EU gas supply Global trade
Annual change, Bcm Annual change, Bcm
40 120
Other pipeline
Production Russia Other
Russian pipeline
20 90
LNG

0 60

30
-20
0
-40
-30
-60
10 year 2013 2014 -60
average 2004 2009 2014
BP Statistical Review of World Energy

© BP p.l.c. 2015
Global gas production and the role of the US
Annual change, %
10%
US non shale Rest of world
8%
US shale World
6%

4%

2%

0%

-2%

-4%
2004 2006 2008 2010 2012 2014
Source: includes data from US Energy Information Administration BP Statistical Review of World Energy

© BP p.l.c. 2015
Coal
Global coal growth
Annual change, %
10%
China Rest of world World
8%

6%

4%

2%

0%

-2%

-4%
2002 2004 2006 2008 2010 2012 2014
BP Statistical Review of World Energy

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Factors driving slower growth of China’s coal demand
Annual change, %

2.5%

2.0%
Slower
energy
1.5% growth

1.0%
Loss of
0.5% market
share
0.0%
2013 2014
BP Statistical Review of World Energy

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Non-Fossil Fuels
Fossil versus non-fossil fuels
Annual change, Mtoe
250

Fossils
200

Biofuels
150

Renewable power
100

Nuclear
50

Hydro
0
2013 2014
BP Statistical Review of World Energy

© BP p.l.c. 2015
Carbon Emissions
Factors driving slower growth of carbon emissions
Annual change, %

2%
GDP

Energy
intensity
1%
Fuel mix

0%
10 year average 2014
BP Statistical Review of World Energy

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Factors driving slower growth of carbon emissions
Annual change, %

2%
OECD

China
1%

Rest of world

0%
10 year average 2014
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Conclusions

2014: a watershed?

US shale revolution changing global energy supplies

Chinese rebalancing changing global energy demand

Twin challenges of sustainability and accessibility

BP Statistical Review of World Energy

© BP p.l.c. 2015
BP Statistical Review of World Energy
June 2015
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Q&A