Tony Fountain, President, BP North American Gas and Power
14
Tony Fountain, President, BP North American Gas and Power
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Transcript of Tony Fountain, President, BP North American Gas and Power
Tony Fountain, President,
BP North American Gas and Power
2000 Consumption
0
5
10
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20
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30
US+Canada Brazil China India
TC
F/y
r
NA – the world’s largest market - strong projected growth
Source:EIA
2000-2010 Growth
US+Canada Brazil China India
0
1
2
3
4
5
6
TC
F/y
r
Market is opportunity-rich for well positioned players
• Large and growing market- 1999 sales - $340bn
• Liberalizing- Progressing by state
• Pressure for green/clean energy solutions
Source:Mckinsey
Size of Open Markets and Use ($ Billions p.a.)
220
145
50
66
80
95
54140
235
0
50
100
150
200
250
300
350
400
1999 2002 2005
Open Competition
Closed
Gas
Power
Current/Projected
BP’s strong focus on NA natural gas
Source: Annual Reports.
* Includes ARCO and Vastar
1999 Gas Production
BP*
Major competitors
Other42%
NA58%
Otheravg 67%
NAavg33%
Power generation is driving projected demand growth
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5
10
15
20
25
30
199
7
200
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200
3
200
6
200
9
201
2
201
5
201
8
Bcf
/d
EIA Demand U.S.Forecast
PowerIndustrial
Residential
Commercial • All sectors growing, but power is the driver
- Gas turbine orders underpin power growth
Total North America Resource
0
2500
$1.00 $5.00
0
50Advanced
Technology
Current
Technology
TCFYears of
Supply
Source:BP/Industry estimates
Gas Price
Industry responding to increase near term production
Source: EIA
12 Month Averages
250
300
350
400
450
500
550
600
650
700
750
800
Jan
-89
Jan
-90
Jan
-91
Jan
-92
Jan
-93
Jan
-94
Jan
-95
Jan
-96
Jan
-97
Jan
-98
Jan
-99
Jan
-00
Ac
tive
Ga
s R
igs
- U
.S.
46
47
48
49
50
51
52
53
U.S
. Pro
du
cti
on
(b
cf/d
)Rigs
Production
Production
Gas Rigs
Current Drilling> 800
Market projected price response to industry actions
Source: Prophet
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
199
0
199
1
199
2
199
3
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4
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5
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6
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7
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199
9
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200
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200
2
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3
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200
5
Henry Hub Natural Gas Prices
$
LNGDW GOM
Alaska/Mackenzie
Onshore
BP is part of the supply solution
Dynamic changes in competitive landscape
?
Noram
SCE
Sithe
Com EnergyPhillips JV
UPRPG&E
Pan- Energy
Mobil
TridentChevron
Destec
Illinova
Calpine
SkyGen
Panda
CGCAVintage
EL PASO
PacifiCorpTenneco
DeepTech
Sonat
Coastal
PG&EPGE
Integrated
Energy Traders
Providing the right offer at right time
• Advantaged supply position • Extending the model. . .
- World class trading skills- Risk management expertise- C & I market leader- Green leadership
• LNG capability• Leading NGLs position• Power market
- Trading - Leveraging natural gas length into advantaged power- Build power base with advantaged sites
Opportunities in advantaged power
Carlson
Cherry Point
Texas CityChocolate Bayou
Decatur
JolietWood River Paulsboro
Baltimore
Cleveland
BP Gas & Power’s differentiated position
Integrated Energy Trader
Integrated Energy Trader
World Class Trading Skills
Risk Management Expertise
NGL Leadership
Advantaged Generation Sites
ProgasIGI
WGL, BGE Green Mountain
Cove Pt.Lake Charles
Distincti
venessSupply Position
Projected D
oubling of S
ales Volumes & N
et
Income in 2000
Decatur
In summary. . .
• Largest growth market in world
• Rapidly changing competitive environment
• BP creating distinctive leadership position
• Right offer at the right time
• Sustained diversified leadership supply position
