1. International Market

2. Top 50 Energy Companies by Market Capitalisation, end 2000, % Other Oil 19.3 ExxonMobil 16.6 Royal Dutch/Shell 11.7 TotalFinaElf 6.0 BP 10.0 Power & gas firms 36.4 Total $1.8tm Total $1.8tm Source: Petroleum Finance Company

3. International “Oil & Gas Deals” Concession from country (10-20 years) Structure: 40% company and 60% country Multi-national financing, project financing, debt financing (debt for equity swap) World Bank, EBRD

4. O& G Journal - 9/25/2000

5. International Perspective Developed and Developing Countries Fossil Fuels Climate Change Market Economies Political Alliances $2 trillion/yr Global Energy Market

6. Energy Consumption per Head*, 1995 Source: World Energy Assessment North America Western Europe Central and Eastern Europe Pacific Asia Latin America Sub-Saharan Africa South Africa 050100150200250350300gigajoules * Includes non-commercial energy

7. Global Primary Energy Consumption 12,000 10,000 8,000 6,000 0 14,000 4,000 2,000 OECD Development countries 8085 90 95200005101520 Forecast Source: International Energy Agency Transition economies Million Tonnes of Oil Equivalent

8. Energy issues Europe (Green movement/ nuclear) Russia/FSU (E. Europe, the “Stans” ) market share (v. OPEC) Latin American (opportunity) SE Asian (production, demand, control) Africa (war, politics, corruption)

9. Kyoto Accord Discord

10. O& G Journal - 7/10/2000

15. Oil Price, Supply and Demand, Inequities Physical constraints (pipelines, refineries) Economic conditions (poor economy-price increase hurts; strong economy-price increase not as significant) Taxes (discourage consumption; favor one fuel over another; fund gov’t services; environment) Developing countries may subsidize consumption to stimulate economy Leaders subsidize cost to stay in power (unsustainable)

16. World Natural Gas Reserves Gas is of increasing significance worldwide Est. 900 of the 2,000 tcf of world undiscovered gas reserves “stranded” New technologies/solutions: LNG, GTL “Clean fuels” strategies become more important world wide

17. LNG The large LNG plants are in Indonesia, Algeria, Nigeria and Trinidad. One of largest underway at Sakhalin (9.6mmt/yr) LNG is one way to move “stranded gas” to market. Some countries, eg. Japan, rely heavily on LNG imports. LNG in the US: is it economic? Environmental pros/cons; energy security/balance of payments issues

22. Russia Heavily dependent on oil revenue Russia needs $18.50/bbl to meet its budget obligations Daily output of 7mmbo Increased drilling by 50% Govt building 2 new pipelines to Baltic and Black seas. EU market share Privatized energy companies World leader in proven gas reserves Siberia far from market

23. Caspian Production Potential Caspian reserve est: 40 billion barrels oil* strategic location World reserve est: 1 trillion barrels oil * ~4% of world reserves

24. O& G Journal - 8/21/2000

26. Tengiz Field, Caspian Region Permian carbonate reefs 1000’ pay H 2 S Overpressured Jurassic salt (great seal)

31. Venezuela Exports 50% of oil production to US Have South America’s largest proven gas reserves (147 tcf). Ranks 8th in world gas. Hope to generate $1billion new investment in (non-oil assoc) gas exploration (2001- 2005) w/ international investment Foster domestic use of natural gas Market LNG a goal Economy dependent on energy revenues Political instability?

39. O& G Journal - 9/25/2000

47. Global Energy Systems Transition Source: GHK Company 0 20 40 60 80 100 Percent of Market 1997 Increasingly sustainable economic growth Decentralised, less capital-intensive technologies 1850190019502000205021002150 Non-sustainable economic growth Centralised, capital-intensive technologies hydrogen wood & hay coal & nuclear gases solids liquids whale oil oil & natural gas liquids oil & hydroelectric petroleum oil “city gas” hydrogen natural gas

48. World Consumption of End-Use Fuels, % Coal Renewables Heat Electricity Gas Oil 1997 2020 Forecast 9,117 Mtoe* 11 1 4 17 18 49 8 2 3 20 18 49 Source: International Energy Agency 5,808 Mtoe * Million tonnes of oil equivalent

49. End

52. O& G Journal - 8/21/2000