mario_matuk.pdf
TRANSCRIPT
Shell Global Scenarios to 2025
Ing. Mario MatukStrategy and Business Development - Royal Dutch Shell Convención Minera Arequipa , PeruSeptember 2007
Agenda
• Scenarios: why and what?• Predetermined trends and Critical
uncertainties• Trilemma framework and Global
Scenarios to 2025• Implications for energy and mining
• Preguntas y respuestas
30 min
15 min
Scenarios ask the right question…..
X Will it happen?
What would we do if it did happen?
Plausible - not easily dismissed
Recognisable from the signals of the present
Relevant and of consequence for the user’s decisions
Challenging
Internally consistent - based on analysis
X Predictions – Projections - Preferences
Features of a good scenario
Expert forecasts can be wrong…
1996
1993
1990
1987
1984
1981
2010 20201990 2000
Year
0
20
40
60
80
100
1970 1980
US(
'90)
/bbl
Actual2000
Scenarios versus Forecasts
CurrentRealities
(mental maps)
MultiplePaths
AlternativeFuture Images
SCENARIOS
The Present The Path The Future
FORECAST
Predetermined trends
Dependent elderly as percent of population
0
10
20
30
40
50
60
1970 1990 2010 2030
USAUK
France
Japan
Sweden
Italy
China
Pharmaceutical evaluation and design
Wide body passenger aircraft design
"Retrofit" large scale civil engineering
Investmentbanking
World-class legal services
Peasant agriculture Textiles and footware
Commercialising computer games
Oil and gas exploration
Map making
Retailbanking
Plantation agriculture
Small scale building services
Making insulated wire
Petrochemicals
Complexity index
20
40
60
80
100
20000 40000 60000 80000 100000Median income in the industry, US$1997
Commodities
Complex activities, complex
infrastructure
Highly “specified”and usually free-standing activities
Complexity and commoditization
2001–2005: The dual crisis of ‘security’ and
‘market trust’
Joe Zeff Design, Inc.
The dual crisis
Three forces shaping our global business environment
EfficiencyMarket incentives
Social cohesionThe force of community
Low Trust Globalisation“Carrots and Sticks”
A legalistic world
Realpolitik, coalitions of the willing
NGO alliances with investors and/or states
State steps in, with market-friendly yet tough hand
Open Doors “Incentives and Bridges”
Pragmatic world
The value chain of trust
Precautionary principle
Civil society works with investors
State acts consensually through incentives and soft power
Flags: “Nations and Causes”
Dogmatic world
Competing claims from self-centriccommunities
Security sought through gated communitiesGovernments seek to overcome social divides through populist and nationalistic policies
2025 GDP:40% higher in Open Doors vs.
Flags
3.83.1 2.6
0
1
2
3
4
5
Open Doors Low TrustGlobalisation
Flags
Implications for energy and
mining
Three energy discontinuities
Three energy discontinuities
Energy demand growthprimarily in developing
world
0
100
200
300
400
2000 Flags Low TrustGlobalisation
Open Doors
Developing world
Developed world
pipelines
major demand
Natuna Malampaya
Tarim Sichuan
Ordos
major supply
Turkmenistan
Yakutsk Sakhalin
West Baikal
Iran
LNG flows
Asian Gas Grid 2020
Oman
The Energy Ladder
0.1
1
10
1000 10000 100000
GDP (US$ per capita)
Ener
gy C
onsu
mpt
ion
(toe
per c
apita
)
China India
Vietnam Sri Lanka
Indonesia Pakistan
South Korea Thailand
Malaysia Philippines
Turkey Algeria
South Africa Israel
Saudi Arabia Brazil
Chile Peru
Mexico Argentina
Spain Portugal
Greece Italy
Hungary Poland
Czech Republic Slovak Republic
Japan Australia
New Zealand Germany
United Kingdom France
Netherlands Austria
Belgium Ireland
Switzerland Finland
Norway Sweden
Denmark USA
Canada
Energy ladder – the Scurve
India
China
USA
Germany
Brazil
Indonesia
United Kingdom
France
Japan
Canada
Peru
Argentina
Mexico
Chile
Increased energy intensity of global economic growth
World Total Primary Energy Growth vs GDP Growth
GDP & Energy y-o-y Growth
GDP Energy Ratio
0%
3%
5%
66-70 71-75 76-80 81-85 86-90 91-95 96-00 01-05e0.0
0.4
0.8
1.2
1%
Ratio Energy/GDP
0.1
1
10
1000 10000 100000
GDP (US$ per capita)
Ener
gy C
onsu
mpt
ion
(toe
per c
apita
)
Energy ladder – the S curve
China
USA
United Kingdom
South KoreaJapan
If by 2030 China consumes as much energy per person as South Korea does today, its total energy consumption would be 2.7 times the US current consumption.
China’s transport sector would then consume 1.6 times the energy used by the US transport sector today.
Three energy discontinuities
Discovered volumes are decreasing
0 10 20 30 40 50 60 70 80 90
1910 1930 1940 1950
1960
1970
1980
1990 2000
2010
2020
2030 2040
bln boe
20-year average
Annual Discovered Volumes
1920
Big Oil: who the majors really are
Oil and gas reserves 2004 (Source: CSFB)
0
50
100
150
200
250
300
350
Aram
coNIO
C QPADNOCIra
q N
OC Gaz
prom KPC
PDVSANN
PCNOC
Libya
Sona
trach
Rosn
eft
XOM BP RDS
bln
boe gas
oil
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
0.00 2.00 4.00 6.00 8.00 10.00 12.00Institutional Integrity Index (Transparency)
GD
P/C
apita
(Wea
lth)
States accounting for >80% of proven Oil reserves
States accounting for >80% of proven Oil reserves
MRHs, Wealth, and Transparency
Three energy discontinuities
The hydro-carbon industry
Global CO2 markets are developing
What Shapes Long Term Energy y metales?
The contributors
By 2050
• demography: 8-10 billion people
• incomes: average $15-25k/capita
• urbanisation: 80% living in cities
• liberalisation: markets increase possibilities
• demand (2-3 times increase)
The contributors
• demography• incomes• urbanisation• liberalisation
What Shapes Long Term Energy?
The critical
• resource constraints• technology• social and personal priorities
million bbls per day
3,000 bln bbls
+ 350 bln bblsof NGLs
+ 850 bln bblsheavy oil andbitumen
excluding shales
Ultimate Recoverable Resource
Source: based on USGS mean estimates, June, 2000
0
25
50
75
100
125
2% per annum
7.5% per annum
1950 1975 2000 2025 2050
The Oil Mountain
2010 2020 2030
Gas?
Nuclear?
Renewables?
Branching Point 2025
Source: NREL, 2000
Diverse StorageThermal Pumped hydroCompressed airChemical
Ubiquitous Solar 2030
The Orderly Oil Transition 2040
A Highly Diverse and Complex Energy System
EJ
HydroNuclear
Biofuels
Solar Thermal
GeothermalSolar PV
WindBiomass
Gas
Oil
Coal
Traditional0
250
500
750
1000
1970 1990 2010 2030 2050
Thresholds Crossed
What options would 12 litres of fuel for 400 kilometres create?
Freedomwith
Fuel Convenience
Primary Energy ComparisonEJ
HydroNuclear
Gas
Oil
CoalTraditional
New Renewables
Coal CH4/H2
0
250
500
750
1000
1250
1970 1990 2010 2030 2050
EJ
0
250
500
750
1000
1970 1990 2010 2030 2050
Oil Price Comparison2000 $ per barrel
Spirit of the Coming Age
Dynamics as Usual
0
10
20
30
40
1970 1980 1990 2000 2010 2020 2030
“Fundamental questions that face us all”
“No matter what happens, the US Navy is
not going to be caught napping”
Frank Knox, U.S. Secretary of the Navy
4th December 1941
The Shell Global Scenarios
Back-up slides