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Europe’s Indigenous Oil and Gas Production. GSE Workshop Brussels – 24th May 2007. Who are OGP?. International Association of Oil & Gas Producers: - Exploration and production - 67 companies and associations
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Europe’s Indigenous Oil and Gas Production GSE WorkshopBrussels – 24th May 2007
Who are OGP? • International Association of Oil & Gas Producers:- Exploration and production- 67 companies and associations • Members account for morethan half of the world‘s oiloutput + about 1/3 of globalgas production • Office in London for global affairs since 1974Office in Brussels for representation towards the EU since 1992 Courtesy of Statoil
European energy demand Europe Average Growth / Yr. Share 2005 2030 Oil 39% 35% Gas 24% 27% Coal 17% 15% Other 20% 23% ~60% from oil and gas Source: ExxonMobil 2006 Source: ExxonMobil, 2006
Europe – a major oil and gas producer ... 2 4 6 8 10 12 14 16 18 20 Source: BP Statistical Review 2006
… especially in the North Sea Source: OGP 2005
European production and consumption Figures for 2005 in billion barrels of oil equivalent (BOE) • EU 25 (+ Norway)production:- Oil: 1.9 = 35% of- Gas: 1.8 = 60% of • Indigenous potential is up to 100 billion BOE = more than 27 years (at current production) ! • EU 25 (+ Norway)consumption:- Oil: 5.4- Gas: 3.0 Source: BP Statistical Review 2006 Source: IEA Word Energy Outlook 2006
Diversification of sources Diversification of supply routes Transparent and non-discriminatory transits Maximise indigenous supplies EU/ Producer country dialogue and policies LNG Commercial gas storage New technology R&D Joint university / industry initiatives Stable and competitive fiscal regime Timely planning approval Open markets Service sector capacity Upstream long term contracts Timely investment Transparent, stable and applied regulation Essentials for Supply Security
450 400 350 300 Storage Out 250 Production Flex Storage In Base Load 200 Demand 150 100 50 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Role of Production Flexibility Amount of prod. flex decreases with time Production flexibility is not re-usable
... make the most of what we have • Recovery factor up… • North Sea currently ~ 45% • Increase by1% equals 2.5 + years European consumption • Technology to access unconventional oil & gas • Oil sands • Tight reservoirs • Difficult geography and geology Norway Oil Recovery Factor Ultra Tight Gas Por: 5 to 15 % Perm: 10µD – 0.1mD
….by technology penetration • Key challenges: • Developing improvedtechnologies to find and produce oil and gas with a minimal environmental footprint • To use fossil fuels more sustainably through carbon capture and storage technologies. • Examples of technologies under development: • Seismic and Electromagnetic imaging • Snake wells • Enhanced oil recovery • Swellable elastomers • Tight gas • Deep water • Oil shale
… within a competitive market • The oil and gas producing industry is an integral part of EU industry and : • It operates in a globally competitive energy sphere • It’s continued contribution to EU Security of Supply depends on appropriate policy frameworks that recognise this context • Oil and Gas mega-projects requiring high capital expenditure and having up to 10 years lead time and long life cycles require the industry to take a long term view. • To ensure that the considerable remaining potential of EEA indigenous production is exploited requires an enduringly competitive and stable regulatory regime.