Energy Perspectives 2016 Long-term macro and market outlook Press seminar, Oslo, 9 June 2016 Eirik Wærness, Senior vice president and Chief economist
Energy Perspectives 2016 Macro and market outlook to 2040 – www.statoil.com/energyperspectives 2
Significant uncertainty and large changes … this calls for using scenarios Supply and demand factors (indexed 2002=100) 1600 12000 US shale oil prod. 1400 10000 Chinese int. 1200 tourists 8000 New Chinese cars 1000 Chinese air 800 6000 passengers Solar capacity 600 (rhs) 4000 400 2000 200 0 0 2000 2003 2006 2009 2012 2015 Source: DOE, CEIC, IEA, IRENA Source: The Economist 3
Reform Renewal 2013 Several futures are possible... Rivalry But the world is twice as rich, needs more energy, and is more efficient World GDP growth rates World GDP and energy demand % Index, 1990=100 Reform Renewal Rivalry 4 H Reform Renewal Rivalry 500 400 3 300 2 200 1 100 0 0 '90-'00'00-'10 '10-'20 '20-'30 '30-'40 1990 2000 2010 2020 2030 2040 4 Classification: Internal 2015-04-28
A strong trend affecting economics and energy All growth in energy demand in emerging economies, in particular in Asia The global population centre is in Asia World energy demand per region Bn toe Each small square represents 1 million people Rest of world India China OECD Pacific OECD Europe OECD Americas 2013 2020 2040 20 16 12 8 4 0 Ref Ren Riv Ref Ren Riv Source: BigThink, IEA, Statoil (projections) 5
Speeding up the change in global energy mix … with Renewal displaying a paradigm shift Bn toe 100% 20 New RES 80% Biofuels 15 and waste Hydro 60% 10 Nuclear 40% Gas 5 20% Oil 0% 0 1973 1983 1993 2003 2013 2040 Reform 2040 Renewal 2040 Rivalry Solid fuels 1973 1983 1993 2003 2013 2040 Reform 2040 Renewal 2040 Rivalry Historical 6
CO 2 emissions determined by demand and mix Climate policies: Driving Renewal, contributing to Reform World CO 2 emissions World CO 2 emissions Billion tons Billion tons Rest of world India China OECD Pacific OECD Europe OECD Americas 2013 2040 2013 2040 40 40 Rivalry NP 30 Reform 30 20 20 450 Renewal 10 10 0 0 Ref Ren Riv Statoil IEA Source: IEA (history), Statoil (projections) 7
Technology shift for light duty vehicles … in all scenarios, and a revolution in Renewal Sales Light Duty Vehicles Light Duty Vehicle fleet composition Fuel mix in Final Energy Demand for LDVs Millions Billions % Other Plug-in hybrids Other Plug-in hybrids Electricity Biomass Gas Oil Electric vehicles Diesel Electric vehicles Diesel Gasoline Gasoline 2013 2040 2013 2040 2013 2040 100 140 3 120 80 100 2 60 80 60 40 1 40 20 20 0 0 0 Ref Ren Riv Ref Ren Riv Ref Ren Riv Source: IEA (history), Statoil (projections) 8
Fuel mix change in electricity Large investments in new renewables required, especially in Renewal Electricity generation mix Solar and wind generation capacity % GW Geothermal Solar Wind Solar Wind Biomass Hydro Nuclear Gas Oil Coal 2013 2040 2013 2040 100 7,000 6,000 80 5,000 60 4,000 3,000 40 2,000 20 1,000 0 0 Ref Ren Riv Ref Ren Riv 9
Oil and gas dominate in other sectors … contributing to maintaining demand for fossil fuels Fuel mix in Final Energy Demand for Transport Fuel mix in Final Energy Demand for excluding LDVs Residential, Commercial & Industrial sectors % % Electricity Biomass Gas Oil Coal Heat Electricity New RES Biomass Gas Oil Coal 2040 2013 2040 2013 100 100 80 80 60 60 40 40 20 20 0 0 Ref Ren Riv Ref Ren Riv 10
Oil and gas are here to stay… … for decades Oil demand*, and supply from existing fields Gas demand, and supply from existing fields Million barrels per day Billion cubic meters 140 5000 120 Demand 4000 range Demand 100 range 3000 80 60 2000 Production Production Decline Decline 40 range range 1000 20 0 0 2015 2020 2030 2040 2015 2020 2030 2040 Assumming production from existing fields declining at 3-6% p.a. Assumming production from existing fields declining at 3-6% p.a. Source: IEA (WEO 2015), Statoil (projections) 11
… which requires significant investments… …in addition to investments in new renewables and electricity systems New oil production in 2040 New gas production in 2040 Incremental RES production 2015-40 Billion toe Billion toe Billion toe Reform Renewal Rivalry Reform Renewal Rivalry Reform Renewal Rivalry 5 5 5 4 4 4 3 3 3 12 500 TWh 56 mbd 2 2 2 2700 bcm 1 1 1 0 0 0 Ref Ren Riv Ref Ren Riv Ref Ren Riv Source: IEA (history), Statoil (projections) 12
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