© BP 2004

BP Statistical Review Update

Energy in focus

Michael D. Smith, Head Energy AnalysisLondon, 8th December 2004

BP Statistical Review of World Energy 2004 © BP

Presentation outline

• Key messages from 2004 Statistical Review

• Oil market update

• China & Russia

• Conclusions

BP Statistical Review of World Energy 2004 © BP

Oil Reserves

0

200

400

600

800

1000

1200

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

OPEC Non-OPEC FSUThousand million barrels

BP Statistical Review of World Energy 2004 © BP

World natural gas reserves

0

20

40

60

80

100

120

140

160

180

200

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Middle East FSU North America S & C America Europe Africa Asia Pacifictcm

BP Statistical Review of World Energy 2004 © BP

2.0%

2.1%

2.9%

0.4%

-2.0%

6.9%

Nuclear

Hydro

NaturalGas

Oil

Coal

PrimaryEnergy

World Primary Energy Consumption Growth 2003

0%

1%

2%

3%

4%

5%

6%

7%

NAmerica

S&CAmerica

Europe &Eurasia

Mid East Africa AsiaPacific

Year-on-year change

BP Statistical Review of World Energy 2004 © BP

World Coal Consumption excl. China

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Change year on year

BP Statistical Review of World Energy 2004 © BP

Natural Gas Consumption Growth, 2003

-4%

-2%

0%

2%

4%

6%

8%

10%

N America S & CAmerica

Europe FSU Middle East Africa Asia Pacific

BP Statistical Review of World Energy 2004 © BP

Global reactor additions by year of start-up

0

5

10

15

20

25

30

35

1965 1970 1975 1980 1985 1990 1995 2000

number of reactors

BP Statistical Review of World Energy 2004 © BP

16%

19%

8%

5%

16%

36%

Renewable Energy

Germany

SpainUSA

Denmark

India

Rest of world

Total: 40.3 Total: 40.3 gigawattsgigawatts0

100

200

300

400

500

600

1994 1996 1998 2000 2002

Rest of worldUSAEuropeJapan

MW per annum

Installed Wind Generation Installed Wind Generation Capacity Capacity -- end 2003end 2003

Global Solar PV productionGlobal Solar PV production

BP Statistical Review of World Energy 2004 © BP

85

90

95

100

105

110

115

120

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Index (1990 = 100)

World

World Carbon Emissions Index

Annex 1 exc. US, Australia

BP Statistical Review of World Energy 2004 © BP

Highlights of 2004

• Strong world economic growth

• Oil market strength: prices, demand, OPEC production

• Even stronger growth in Chinese energy demand

• Burst of Russian, Norwegian gas exports

• Continued weakness in US gas demand

• Kyoto headed towards ratification

• Saudi capacity increases announced

BP Statistical Review of World Energy 2004 © BP

Oil Market Update

BP Statistical Review of World Energy 2004 © BP

Oil Prices (Dated Brent) 2003-2004

20

25

30

35

40

45

50

55

Jan-03

Mar-03

May-03

Jul-0

3Sep

-03Nov-0

3Ja

n-04Mar

-04May

-04Ju

l-04

Sep-04

Nov-04

US$

/bbl

Iraq War commences

End of Formal Iraq Hostilities

Unexpected OPEC Quota Cut

Hurricane Ivan

Weak Alaska/N. Sea supply

Terrorist Incidents in Saudi Arabia

Iraq Disruptions

US crude stock builds. Reduction in speculative net length

Demand strength

BP Statistical Review of World Energy 2004 © BP

OECD Commercial Oil Stocks re-build from lows

2300

2350

2400

2450

2500

2550

2600

2650

2700

2750

2800

Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04

1998 - 2002 Range

Million barrels

Source: International Energy Agency

BP Statistical Review of World Energy 2004 © BP

Crude prices disconnect from historical inventory relationship

0

5

10

15

20

25

30

35

40

45

50

-200 -150 -100 -50 0 50 100 150 200 250

Delta OECD commercial inventories vs. 5-year (1999-2003) seasonal average

Next month Dated Brent price ($/barrel)

Apr 04May 04

Jun 04

Jul 04 Aug 04

Sep 04

Oct 04

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Annual oil demand growth 1984-2004

-0.5

0

0.5

1

1.5

2

2.5

3

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

Million b/d

Average

BP Statistical Review of World Energy 2004 © BP

OPEC crude oil production

20

22

24

26

28

30

32

1q 03 2q 03 3q 03 4q 03 1q 04 2q 04 3q 04 4q 04

OPEC-10 Crude IraqMillion b/d

Notional capacity

BP Statistical Review of World Energy 2004 © BP

Brent-Dubai price spread

-2

0

2

4

6

8

10

12

14Ju

l-87

Jul-88

Jul-89

Jul-90

Jul-91

Jul-92

Jul-93

Jul-94

Jul-95

Jul-96

Jul-97

Jul-98

Jul-99

Jul-00

Jul-01

Jul-02

Jul-03

Jul-04

$ per barrel

BP Statistical Review of World Energy 2004 © BP

Freight: Ras Tanura – Corpus Christi

0

1

2

3

4

5

6

7

8

Jan-

85

Jan-

86

Jan-

87

Jan-

88

Jan-

89

Jan-

90

Jan-

91

Jan-

92

Jan-

93

Jan-

94

Jan-

95

Jan-

96

Jan-

97

Jan-

98

Jan-

99

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

$/barrel

BP Statistical Review of World Energy 2004 © BP

China and Russia

BP Statistical Review of World Energy 2004 © BP

Chinese energy demand growth 2003-2004

0% 5% 10% 15% 20% 25%

Nuclear

Hydro

Gas

Oil

Coal

Energy

GDP

2003 2004(f)

+72.3%

BP Statistical Review of World Energy 2004 © BP

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1985 1987 1989 1991 1993 1995 1997 1999 2001 2003

China: Net Oil Imports 1985-2003

2004 projection

Million b/d

BP Statistical Review of World Energy 2004 © BP

Russian oil production/consumption

0

2

4

6

8

10

12

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

(f)

Production ConsumptionMillion b/d

BP Statistical Review of World Energy 2004 © BP

Russian gas exports to Europe

100

110

120

130

140

150

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004(f)

Billion cubic metres

BP Statistical Review of World Energy 2004 © BP

Summary and Conclusions

• Proved reserves of oil & gas still increasing

• Strong energy demand growth in 03/04

• Coal taking market share from gas since 2000

• Strong growth in global carbon emissions

• Oil prices at record (nominal $) highs in 2004– pressure on available capacity from exceptional demand growth

– breakdown in traditional price-inventory relationship

• Russian oil export growth exceeding Chinese import growth

© BP 2004

BP Statistical Review of World Energy 2004

Energy in Focus

www.bp.com/statisticalreview2004