© BP p.l.c. 2018

BP Energy Outlook2018 edition

William ZimmernLead Economist Energy Transitions

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Agenda

2

• Today’s energy landscape

• Future energy trends

• Key questions

• Q&A

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Today’s energy landscape

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The transport sector made up what proportion of global primary energy demand in 2016?

A. 20%

B. 50%

C. 75%

Question 1

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The transport sector made up what proportion of global primary energy demand in 2016?

A. 20%

B. 50%

C. 75%

Question 1

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Passenger cars made up what proportion of liquids (oil) demand in 2016?

A. 20%

B. 50%

C. 80%

Question 2

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Passenger cars made up what proportion of liquids (oil) demand in 2016?

A. 20%

B. 50%

C. 80%

Question 2

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Primary energy demand by end-use sector

8

0

2

4

6

8

10

12

14

2016

45%

6%

29%

20%

Domestic & commercial buildings, agriculture

Cars, trucks, aviation, shipping

Petrochemicals, lubricants etc

Energy used in the industrial sector

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BP Energy Outlook2018 edition

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0

5

10

15

20

2016 ET ICEban

Lessgas

switch

REpush

FT EFT

Renewables

Hydro

Nuclear

Coal

Gas

Oil

Primary energy consumption by fuel Carbon emissions

0

5

10

15

20

25

30

35

40

1970 1980 1990 2000 2010 2020 2030 2040

Evolving transition (ET)Internal combustion engine ban (ICE ban)Less gas switchingRenewables push (RE push)Faster transition (FT)Even faster transition (EFT)

2040

Alternative scenarios

Billion toe Billion tonnes CO2

10

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Conventional

LNG

Russian pipeline

11

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

World China India Africa OECD Other

Productivity

Population

1990-2016

2016-2040

Economic backdrop

GDP growth by region and factor

% per annum

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0

5

10

15

20 Other

Africa

Other Asia

India

China

OECD

0

5

10

15

20Renewables

Hydro

NuclearCoal

Gas

Oil

Billion toe

0

5

10

15

20Transport

Industry

Non-combusted

Buildings

Primary energy demand

End-use sector Region Fuel

Three windows on the energy transition

12

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Region

13

Primary energy consumption by region Primary energy growth and regional contributions

% per annum

0

5

10

15

20

1970 1980 1990 2000 2010 2020 2030 2040

Other

Africa

Other Asia

India

China

OECD

-0,5%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

2000-2010 2010-2020 2020-2030 2030-2040

Billion toe

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Fuel

14

Shares of primary energy

0

5

10

15

20

1970 1980 1990 2000 2010 2020 2030 2040

Renewables

Hydro

Nuclear

Coal

Gas

Oil

0%

10%

20%

30%

40%

50%

1970 1980 1990 2000 2010 2020 2030 2040

Oil GasCoal NuclearHydro Renewables

Primary energy consumption by fuel

Billion toe

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Diversified fuel mix

15

Shares of primary energy

0%

20%

40%

60%

80%

100%

1900 1920 1940 1960 1980 2000 2020 2040

Oil

Gas

Coal

Non-fossil

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Key questions

16

• What have we learnt about electric cars and the mobility revolution?

• When is global oil demand likely to stop growing?

• What does this mean for carbon emissions?

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Key questions

17

• What have we learnt about electric cars and the mobility revolution?

• When is global oil demand likely to stop growing?

• What does this mean for carbon emissions?

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Electric vehicles

18*Internal combustion engine

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Electric vehicles

19*Internal combustion engine

0

5

10

15

20

25

30

35

40

2016 2020 2025 2030 2035 2040

Electricity

Gas

Liquids

Trillion km

Car kilometres by fuel type

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Global ban on internal-combustion engine (ICE) cars

20

0%

20%

40%

60%

80%

100%

2016 2020 2025 2030 2035 2040

Evolving transition

ICE ban

0%

20%

40%

60%

80%

100%

2016 2020 2030 2040

Evolving transition

ICE ban

Electric car sales as a share of total car sales

Share of total passenger Vkm powered by electricityShareShare

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Global ban on internal-combustion engine (ICE) cars

Carbon emissions from energy

Billion tonnes CO2

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

2016 ET ICE ban

Number of EV’s

Billion

21

0

5

10

15

20

25

30

35

40

1990 2000 2010 2020 2030 2040

Evolving transition

Even faster transition

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Global ban on internal-combustion engine (ICE) cars

Carbon emissions from energy

Billion tonnes CO2

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

2016 ET ICE ban

Number of EV’s

Billion

22

0

5

10

15

20

25

30

35

40

1990 2000 2010 2020 2030 2040

Evolving transitionICE banEven faster transition

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Key questions

23

• What have we learnt about electric cars and the mobility revolution?

• When is global oil demand likely to stop growing?

• What does this mean for carbon emissions?

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Demand for oil and other liquid fuels

24

0

20

40

60

80

100

120

140

2000 2010 2020 2030 2040

Cars TrucksNon-road Non-combustedIndustry BuildingsPower

Liquids demand

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

2005- 2010

2010-2015

2015-2020

2020-2025

2025-2030

2030-2035

2035-2040

Power Buildings

Industry Non-combusted

Transport Total

Mb/d, average annual growthMb/d

Liquids demand growth

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Demand for oil and other liquid fuels

25

0

20

40

60

80

100

120

1970 1980 1990 2000 2010 2020 2030 2040

Evolving transition

ICE ban

Faster transition

Even faster transition

Liquids demand

Mb/d

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Demand for oil and other liquid fuels

26

0

20

40

60

80

100

120

1970 1980 1990 2000 2010 2020 2030 2040

Evolving transition

ICE ban

Faster transition

Even faster transition

Supply with no investment

Liquids demand

(3% decline rate)

Mb/d

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Key questions

27

• What have we learnt about electric cars and the mobility revolution?

• When is global oil demand likely to stop growing?

• What does this mean for carbon emissions?

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Impact of faster transition on global energy

28

Billion tonnes CO2

Carbon emissions

0

10

20

30

40

1970 1980 1990 2000 2010 2020 2030 2040

Evolving transition

Faster transition

Even faster transition

Billion toe

0

5

10

15

20

2016 ET FT EFT

Renew.

Hydro

Nuclear

Coal

Gas

Oil

2040

Primary energy consumption under different scenarios

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Appendix

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0%

4%

8%

12%

16%

0 10 20 30 40 50

Oil (1877)

Gas (1899)

Coal ()

Nuclear (1974)

Hydro (1922)

Renewables (2008)

Years from reaching 1% share

% Share

Shares of global primary energy

Energy transitions are measured in decades

30

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0%

4%

8%

12%

16%

0 10 20 30 40 50

Oil (1877)

Gas (1899)

Nuclear (1974)

Hydro (1922)

Renewables (2008)

(projected)

Years from reaching 1% share

% Share

Shares of global primary energy

Energy transitions are measured in decades

31

© BP p.l.c. 2018

0%

4%

8%

12%

16%

20%

24%

28%

32%

0 10 20 30 40 50

Oil (1877)

Gas (1899)

Nuclear (1974)

Hydro (1922)

Renewables (2008)

ET

EFT

Years from reaching 1% share

% Share

Shares of global primary energy

Energy transitions are measured in decades

32