Energy in 2017: two steps forward, one step back Spencer Dale, group chief economist BP Statistical Review of World Energy © BP p.l.c. 2018

Growth in GDP and energy Annual change, % 6% 5% 4% 3% 2% 1% 0% -1% 2006-16 2017 GD P Primary Energy GD P Primary Energy GDP Primary Energy energy productivity energy productivity energy productivity World OECD Non-OECD BP Statistical Review of World Energy © BP p.l.c. 2018

Growth in GDP and energy Annual change, % 6% 5% 4% 3% 2% 1% 0% 2006-16 2017 -1% GD P Primary Energy GD P Primary Energy GDP Primary Energy energy productivity energy productivity energy productivity World OECD Non-OECD BP Statistical Review of World Energy © BP p.l.c. 2018

Growth in GDP and energy Annual change, % 6% 5% 4% 3% 2% 1% 0% 2006-16 2017 -1% GD P Primary Energy GD P Primary Energy GDP Primary Energy energy productivity energy productivity energy productivity World OECD Non-OECD BP Statistical Review of World Energy © BP p.l.c. 2018

Primary energy fuel mix Consumption growth by fuel Shares of primary energy consumption Annual change, Mtoe 350 300 250 200 150 100 50 -50 -100 50% Coal 40% Oil Coal Gas Hydro Nuclear Renew. Nuclear Hydro Oil Renew. Gas 30% 20% 10% 0% 2006-16 2016 2017 1965 1978 1991 2004 2017 Note: Oil includes biofuels BP Statistical Review of World Energy © BP p.l.c. 2018

Oil BP Statistical Review of World Energy © BP p.l.c. 2018

BP Statistical Review of World Energy © BP p.l.c. 2018

Previously in the Statistical Review… BP Statistical Review of World Energy © BP p.l.c. 2018

Previously in the Statistical Review… Oil production and consumption back in balance, but inventories at record highs; BP Statistical Review of World Energy © BP p.l.c. 2018

Previously in the Statistical Review… Oil production and consumption back in balance, but inventories at record highs; Vienna group begun to implement production cuts to reduce inventories BP Statistical Review of World Energy © BP p.l.c. 2018

Previously in the Statistical Review… Oil production and consumption back in balance, but inventories at record highs; Vienna group begun to implement production cuts to reduce inventories But US tight oil started to pick up BP Statistical Review of World Energy © BP p.l.c. 2018

Previously in the Statistical Review… Oil production and consumption back in balance, but inventories at record highs; Vienna group begun to implement production cuts to reduce inventories But US tight oil started to pick up What happened next…….? BP Statistical Review of World Energy © BP p.l.c. 2018

Oil demand growth Growth by importers and exporters Mb/d 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5 Importers Exporters Total growth 10-year average 2015 2016 2017 BP Statistical Review of World Energy © BP p.l.c. 2018

Other products Total growth Oil demand growth Growth by importers and exporters Growth by product Mb/d 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5 Mb/d 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5 Gasoline Gasoil/Diesel Importers Exporters Total growth Jet/Kero Fuel oil Other products Total growth 10-year 2015 2016 2017 10-year 2015 2016 2017 average average BP Statistical Review of World Energy © BP p.l.c. 2018

Oil supply Annual change, Mb/d 2.0 1.5 1.0 0.5 0.0 -0.5 -1.0 -1.5 Total supply growth 2016 2017 BP Statistical Review of World Energy © BP p.l.c. 2018

Oil supply Annual change, Mb/d 2.0 1.5 1.0 0.5 0.0 -0.5 Total supply growth Vienna group OPEC-12 Non-OPEC -1.0 -1.5 2016 2017 BP Statistical Review of World Energy © BP p.l.c. 2018

Oil supply Annual change, Mb/d 2.0 1.5 1.0 0.5 0.0 -0.5 -1.0 Total supply growth Vienna group OPEC-12 Non-OPEC Non-Vienna group US Others -1.5 2016 2017 BP Statistical Review of World Energy © BP p.l.c. 2018

Production cuts Venezuela Saudi Arabia Rest OPEC-12 Non-OPEC Mb/d Vienna group production cut Vienna group (LHS) Venezuela Saudi Arabia Rest OPEC-12 Non-OPEC Mb/d Mb/d 0.0 -0.5 -1.0 -1.5 -2.0 -2.5 Actual cut (April 2018) Target reduction -3.0 BP Statistical Review of World Energy © BP p.l.c. 2018

Production cuts Venezuela Saudi Arabia Rest OPEC-12 Non-OPEC Mb/d Vienna group production cut Vienna group (LHS) Venezuela Saudi Arabia Rest OPEC-12 Non-OPEC Mb/d Mb/d 0.0 -0.5 -1.0 -1.5 -2.0 -2.5 Target reduction Actual cut (April 2018) -3.0 BP Statistical Review of World Energy © BP p.l.c. 2018

Production cuts Vienna group production cut Venezuela Saudi Arabia Vienna group (LHS) Mb/d 0.0 Rest OPEC-12 Non-OPEC Mb/d 0.0 -0.5 -0.2 -1.0 -0.4 -1.5 -0.6 -2.0 -0.8 -2.5 Target reduction Actual cut (April 2018) -3.0 -1.0 BP Statistical Review of World Energy © BP p.l.c. 2018

OECD oil inventories Mbbls 3100 3000 2900 2800 2700 2600 2500 1Q14 Oct 2016 OECD commercial stocks 3000 2900 2800 2700 5 year rolling average 2600 2500 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 BP Statistical Review of World Energy © BP p.l.c. 2018

OECD oil inventories Mbbls 3100 3000 2900 2800 2700 2600 2500 1Q14 Oct 2016 OECD commercial stocks 3000 2900 2800 2700 5 year rolling average 2010 - 2014 average 2600 2500 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 BP Statistical Review of World Energy © BP p.l.c. 2018

OECD oil inventories Mbbls 3100 3000 2900 2800 2700 2600 2500 1Q14 Oct 2016 OECD commercial stocks 3000 2900 5 year rolling average 2800 Inventories* 2700 2010 - 2014 average 2600 2500 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 BP Statistical Review of World Energy © BP p.l.c. 2018

US tight oil and oil prices $/bbl 120 Mb/d 6 100 5 80 4 60 3 40 2 20 1 WTI Tight oil (RHS) 2012 2013 2014 2015 2016 2017 2018 BP Statistical Review of World Energy © BP p.l.c. 2018

Production cuts versus tight oil increases Change in supply relative to October 2016 Mb/d 3 Vienna group US tight oil and NGLs Net 2 1 -1 -2 -3 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 BP Statistical Review of World Energy © BP p.l.c. 2018

Permian productivity 1Q2014=100 500 400 Initial output per rig 300 200 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 BP Statistical Review of World Energy © BP p.l.c. 2018

Permian productivity 1Q2014=100 500 Initial output per completed well 400 Initial output per rig 300 200 100 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 BP Statistical Review of World Energy © BP p.l.c. 2018

Permian productivity 1Q2014=100 500 Initial output per completed well 400 Initial output per rig 300 200 Initial output per 1000 lateral foot of completed well 100 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 BP Statistical Review of World Energy © BP p.l.c. 2018

Oil price Dated Brent, $/bbl 140 120 100 80 60 40 Dated Brent Annual average 20 2010 2011 2012 2013 2014 2015 2016 2017 2018 BP Statistical Review of World Energy © BP p.l.c. 2018

BP Statistical Review of World Energy © BP p.l.c. 2018

Natural Gas BP Statistical Review of World Energy © BP p.l.c. 2018

Natural gas consumption and production Consumption Production Annual change, bcm 175 150 125 100 75 50 25 -25 China Russia Iran Turkey Australia Saudi Arabia US Rest of world 10-year average 2017 10-year average 2017 BP Statistical Review of World Energy © BP p.l.c. 2018

Impact of Chinese gas surge China wholesale LNG prices Thousand RMB/tonne China LNG imports and receiving capacity Million tonnes 12 6 Import volume Receiving capacity Average northern China 8 4 4 2 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 BP Statistical Review of World Energy © BP p.l.c. 2018

LNG exports and imports Annual change, bcm LNG imports Annual change, bcm 60 50 40 30 20 10 -10 -20 Australia US Middle East Africa RoW 60 50 40 30 20 10 -10 -20 RoW Imports via FSRU* Japan/Korea China 2015 2016 2017 2015 2016 2017 BP Statistical Review of World Energy © BP p.l.c. 2018 *Floating storage and regasification units RoW: Rest of world

LNG glut? Additional demand/supply from 2014 (million tonnes) 160 140 120 100 80 60 40 20 Demand forecast (range) Supply (implied) 2014 2015 2016 2017 2018 2019 2020 * Source: PIRA, IHS, WoodMackenzie, BP BP Statistical Review of World Energy © BP p.l.c. 2018

LNG glut? Additional demand/supply from 2014 (million tonnes) 160 140 120 100 80 60 40 Demand forecast (range) Supply (implied) Actual supply 20 2014 2015 2016 2017 2018 2019 2020 * Source: PIRA, IHS, WoodMackenzie, BP BP Statistical Review of World Energy © BP p.l.c. 2018

US LNG exporters’ costs and Asian spot prices $/mmBtu 20 US exporters’ full-cycle costs US exporters’ operating costs Japan Korea Marker (JKM) 15 Henry Hub (HH) 10 5 Jan-2012 Jan-2014 Jan-2016 Jan-2018 * Operating costs = 115* Henry Hub + $2/mmBtu (transport) ; Full costs also include liquefaction fee ($3/mmBtu) BP Statistical Review of World Energy © BP p.l.c. 2018

Gas price correlation and volatility 1.0 0.8 0.6 HH and NBP HH and JKM NBP and JKM 0.4 0.2 0.0 -0.2 2009-2011 2012-2014 2015-2017 HH – Henry Hub, US; NBP – National Balancing Point, UK; JKM – Japan Korea Marker BP Statistical Review of World Energy © BP p.l.c. 2018

Gas price correlation and volatility 1.0 0.8 Gas price volatility Standard deviation ($/mmBtu) JKM (Asia) NBP (Europe) HH (US) 5 4 0.6 HH and NBP HH and JKM NBP and JKM 3 0.4 2 0.2 0.0 -0.2 1 2009-2011 2012-2014 2015-2017 2009-2011 2012-2014 2015-2017 HH – Henry Hub, US; NBP – National Balancing Point, UK; JKM – Japan Korea Marker BP Statistical Review of World Energy © BP p.l.c. 2018

Coal BP Statistical Review of World Energy © BP p.l.c. 2018

Global coal consumption and production Consumption growth and regional contributions Annual change,% Production growth and regional contributions Annual change, % 6% 8% RoW India China RoW US China 6% 4% 4% 2% 2% 0% 0% -2% -2% -4% -4% -6% 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017

Chinese coal prices RMB/tonne 750 650 550 450 350 Chinese Qinhuangdao spot price Red lines 250 Area of increasing concern Sep-16 Jan-17 Target band 150 Jan-16 May-16 Source: includes data from IHS Markit May-17 Sep-17 Jan-18 May-18 BP Statistical Review of World Energy © BP p.l.c. 2018 43

Power BP Statistical Review of World Energy © BP p.l.c. 2018

Growth in power generation By region By fuel Annual change, % Annual change, TWh 8% 1800 Coal Gas Oil Hydro Nuclear Renewables Non-OECD OECD World 1500 6% 1200 4% 900 600 2% 300 0% -2% -300 2005 2009 2013 2017 2005 2009 2013 2017 BP Statistical Review of World Energy © BP p.l.c. 2018

Growth in solar capacity and generation Annual change, TWh Annual change, GW 100 120 Rest of world 100 80 China 80 60 60 40 40 20 20 2001 2005 2009 2013 2017 2001 2005 2009 2013 2017 BP Statistical Review of World Energy © BP p.l.c. 2018

Fuel shares in power generation Coal Non-fossil Oil & gas 50% 40% 30% 20% 10% 0% 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 BP Statistical Review of World Energy © BP p.l.c. 2018

Carbon emissions BP Statistical Review of World Energy © BP p.l.c. 2018

Growth in carbon emissions GDP and carbon emissions Annual change, % 6% GDP 4% 2% CO₂ 0% -2% -4% Energy intensity of GDP Carbon intensity of energy 2001 2005 2009 2013 2017 -6% Note: change in the carbon intensity of GDP is the sum of “energy intensity of GDP” and “carbon intensity of energy” BP Statistical Review of World Energy © BP p.l.c. 2018

Growth in carbon emissions GDP and carbon emissions Annual change, % 6% 4% 2% 0% -2% 2017 vs 2013-16 Annual change, % 2.0% GDP 1.5% Carbon intensity Energy intensity GDP CO₂ 1.0% 0.5% -4% Energy intensity of GDP Carbon intensity of energy 2001 2005 2009 2013 2017 -6% 0.0% 2013-16 2017 Note: change in the carbon intensity of GDP is the sum of “energy intensity of GDP” and “carbon intensity of energy” BP Statistical Review of World Energy © BP p.l.c. 2018

Cobalt and lithium BP Statistical Review of World Energy © BP p.l.c. 2018

Lithium and cobalt: production and reserves Lithium Cobalt Thousand tonnes Thousand tonnes Production Reserves (2017) Production Reserves (2017) 50 150 2000 125 40 3800 1650 3500 2700 100 30 75 500 20 50 1200 7500 10 250 25 2015 2016 2017 Australia Chile 2015 2016 2017 Argentina RoW D.R. Congo Canada Australia Cuba RoW

Energy in 2017: two steps forward, one step back Spencer Dale, group chief economist BP Statistical Review of World Energy © BP p.l.c. 2018