WORLD OIL/GAS RESERVES: FUTURE SUPPLY & PROSPECTS

NOV 2012

FSTP CLASS D

PRESENTATION ELEMENTS
BACKGROUND: GLOBAL ENERGY DEMAND
BASIC CONCEPTS GLOBAL STATISTICS: OIL & NATURAL GAS RESERVES REGIONAL R/P RATIO FUTURE DEMAND/SUPPLY OIL & NATURAL GAS GLOBAL RESERVE GROWTH RATE & DEPLETION GLOBAL CHALLENGES STRATEGIES FOR ENHANCING RESERVES DRIVING IT HOME: THE NIGERIAN SCENARIO CONCLUSION

BACKGROUND: GLOBAL ENERGY DEMAND

THE WORLD WILL CONTINUE TO NEED ENERGY

BACKGROUND: GLOBAL ENERGY DEMAND

GLOBAL ENERGY DEMAND IS INCREASING.....

SOURCE: BP STATISTICAL REVIEW 2012

BASIC CONCEPTS
Hydrocarbon Initially in Place (HIIP) - This is the amount of hydrocarbon which

can either be crude oil or natural gas estimated to be in a reservoir. Recovery Factor (RF) - This refers to the ratio of the recoverable oil reserves to the oil initially in place in a reservoir. Reserves - Reserves are those quantities of Hydrocarbon (oil/gas) which are estimated to be recovered from known accumulations using current technology and under existing economic condition. Proved Reserves Unproved Reserves Probable Reserves Possible Reserves

BASIC CONCEPTS
Type Of Estimate Low Deterministic Terminology Proved (1P) Probabilistic Terminology P90 Statistical Description 10TH percentile

Best
High

Proved and Probable (2P)

Proved, probable and possible (3P)

950
P10

Medium
90th percentile

Conventional Hydrocarbon Resources: This usually means sand, shaly sand or carbonate reservoir formations with intergranular pore systems, intermediate to high porosity, intermediate to high permeability that contain gas or intermediate to light oil.

Unconventional Hydrocarbons: The objective is to produce hydrocarbons that are very difficult to extract, either because they are located in beds of very low permeability, or because their very nature makes them difficult or impossible to move.

BASIC CONCEPTS HYDROCARBON ACCUMULATION

GLOBAL STATISTICS: PROVED OIL & NATURAL GAS RESERVES

GAS

7360.9 MMMSCF OIL

1652.7 MMBBL

GLOBAL STATISTICS: PROVED OIL & GAS RESERVES

0 50 100 150 200 250 300
296.5 265.4 175.2 154.58 115.35 111.5 97.8 77.4 48 39.8 37.2 25.38 20.682

Venezuala Saudi Arabia Canada

Iran Iraq Kuwait UAE Russia Libya Kazakstan Nigeria Qatar US

PROVED OIL RESERVES BY COUNTRIES (Billion Barrels)

PROVED OIL RESERVES TOP 10 COUNTRIES

10

20

30

40

50 44.8

Russia
Iran Qatar 29.61 25.37

Saudi Arabia
United States Turkmenistan United Arab

7.807
7.716 7.504

6.453 5.292
5.065 4.502

Nigeria
Venezuala Algeria

Trillion cubic meters

PROVED NATURAL GAS RESERVES TOP 10 COUNTRIES

REGIONAL R/P RATIO

Reserves-to-Production (R/P) Ratio (Years)

14
41.2

41.7

North America South & Central America Europe & Eurasia Middle East

78.7 22.3

102

Africa
Asia Pacific

R/P RATIO FOR OIL

Reserves-to-Production (R/P) Ratio (Years)

35 12.5 71.7

45.2

North America

South & Central America

75.9 Europe & Eurasia Middle East Africa Asia Pacific 165

R/P RATIO FOR GAS

FUTURE DEMAND/SUPPLY OIL

PROJECTION OF OIL DEMAND BY REGION (Million BPD)
2010 2015 2020 2025 2030 2035

North America Western Europe OECD Pacific

23.9 14.5 7.8

24.1 14.2 7.7 46.0 5.7 3.7 4.8 6.8 11.6 9.2 41.8 3.3 1.9

23.8 14.0 7.4 45.2 6.0 4.0 5.8 7.6 13.8 9.9 47.2 3.3 2.0

23.4 13.7 7.2 44.2 6.3 4.4 6.8 8.4 15.6 10.7 52.2 3.4 2.2

22.9 13.3 6.9 43.1 6.6 4.7 8.0 9.1 17.1 11.6 57.0 3.4 2.3

22.3 12.9 6.7 41.9 6.8 5.1 9.2 9.9 18.4 12.5 61.9 3.4 2.5

OECD 46.1 Latin America 5.2 Middle-East & Africa South Asia Southeast Asia China OPEC Developing Countries Russia Other Transition economies Transition economies World 3.4 4.0 6.2 8.9 8.1 35.9 3.1 1.7

4.8 86.6

5.1 92.9

5.3 97.8

5.5 102.0

5.7 105.8

5.9 109.7

FUTURE DEMAND/SUPPLY OIL

PROJECTION OF OIL SUPPLY BY REGION (Million BPD)
2010 2010 US & Canada Mexico 12.0 3.0 2015 2015 12.3 2.9 4.2 0.6 20.0 4.9 4.4 3.7 4.2 17.3 10.2 1.9 2020 2020 12.5 2.9 4.0 0.6 20.0 5.2 4.5 3.7 4.3 17.7 10.2 2.0 2025 2025 12.7 2.8 4.0 0.7 20.1 5.3 4.5 3.8 4.3 17.9 10.2 2.2 2030 2030 12.9 2.7 4.0 0.7 20.2 5.5 4.5 3.9 4.3 18.2 10.3 2.3 2035 2035 13.0 2.6 3.9 0.7 20.3 5.7 4.5 4.0 4.3 18.4 10.3 2.5

Western Europe 4.4 OECD Pacific OECD Latin America Middle-East & Africa Asia China DCs, excl. OPEC Russia 0.6 19.9 4.7 4.4 3.7 4.1 16.9 10.1

Other Transition 1.7 economies Transition 4.8 economies Processing Gains 2.1 OPEC NGLS OPEC GTLs OPEC Crude World 4.8 0.1 29.3 86.4

5.1 2.1 6.2 0.3 31.3 93.1

5.3 2.2 7.2 0.4 33.2 98

5.5 2.3 8.0 0.5 35.4 102.2

5.7 2.3 8.9 0.6 37.4 106

5.9 2.4 9.4 0.6 39.3 109.7

FUTURE DEMAND/SUPPLY NATURAL GAS PROJECTION OF NATURAL GAS PROJECTION OF NATURAL GAS
DEMAND BY REGION SUPPLY BY REGION

SOURCE: EXXONMOBIL ENERGY OUTLOOK 2012

GLOBAL RESERVE GROWTH RATE & DEPLETION WORLDWIDE CONVENTIONAL OIL WHEN WILL
PRODUCTION PEAK?

SOURCE: UK ENERGY RESEARCH CENTRE

GLOBAL RESERVE GROWTH RATE & DEPLETION

SOURCE: US ENERGY INFORMATION ADMINISTRATION

GLOBAL CHALLENGES
WORLD ECONOMICS Current crude price and projected future production Rising Oil Prices will stimulate Exploration and Development Cost of exploration and development GLOBAL GEOPOLITICS Global Issues (Political Stability, Climate Change) Security Challenges World Politics(Local/International) OPEC and Non-OPEC production regulations TECHNOLOGY AND INNOVATION Technological developments Skilled Manpower

STRATEGIES FOR ENHANCING RESERVES

TECHNOLOGY Development & Innovation in 3D/4D Seismic (Acquisition, Processing & Interpretation)

Advances in Directional Drilling Technology; Horizontal Drilling Technology, Multiple Reservoir Contact (MRC) Technology.

Offshore Technology Development projects Enhanced oil recovery (EOR) techniques

STRATEGIES FOR ENHANCING RESERVES

UNCONVENTIONAL RESERVES Heavy and Extra-heavy Oil , Tar Sands, Tight Oil, Shale Oil Tight Gas, Shale Gas , Coal bed Methane (CBM) Arctic Region

Deep and Ultra Deep Water

CAPACITY BUILDING Extensive Research

DRIVING IT HOME: THE NIGERIAN SCENARIO

RESERVES ADDITION?? FROM WHERE?? PROSPECTIVE BASINS Anambra Basin Benue Basin Bida Basin Chad Basin Sokoto Basin Niger Delta Basin Ultra Deep Basin of the Niger Delta

ENORMOUS RESERVES POTENTIAL EXIST BUT KEY ISSUES NEEDS TO BE ADDRESSED (PIB, POLITICAL INSTABILTY,SECURITY CHALLENGES)

CONCLUSION
World Energy Demand is increasing due to major drivers such as population growth, economic growth and rapid industrialization Crude Oil and natural gas will remain a major source of energy for world consumption as projected by world energy analysts Projected Crude supply will come from conventional and unconventional sources. Unconventional sources will contribute substantially to the crude oil and natural gas supply requirement. Countries like the US (Oil Shale) and Canada (tar sands) have developed core technologies of exploiting these resources and have increased their

CONCLUSION
Uncertainties exist over when conventional oil peak will occur. the world

Critical issues such as world economics (crude price and cost of exploration and development), global geopolitics and human resources requirement will substantially affect projected demand and supply in the future
Large reserves and key regions in the world still remain unexplored, this include the deep and ultra deep offshore locations and Arctic region. Advances in Technology will enhance reserves addition from these locations. Technology will play a vital role in future discovery of

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