1

Oil Market Update

December, 2015

Vladimir Drebentsov

Head of Russia and CIS Economics, BP plc.

Vice President, BP Russia

2

80

100

120

140

фев.11 мар.12 апр.13 май.14

Eerie calm on oil market

Source: includes data from the International Energy Agency © OECD/IEA 2015 and Platts.

$/bbl

Dated Brent

BP Statistical Review of World Energy

© BP p.l.c. 2015

3 BP Statistical Review of World Energy

© BP 2014

Cumulative change since 4Q10, Mb/d

-3

-2

-1

0

1

2

3

4

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

Source: includes data from US Energy Information Administration

Note: Other includes Sudan/S Sudan, Syria & Yemen

Oil supply disruptions and US production growth

Libya Iran Other US Net

4

Oil market in 2014

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

10 year

average

2014 10 year

average

2014

Annual change, Mb/d

Consumption Production

Non-OECD

OECD

OPEC

Non-OPEC

Note: consumption and production totals include biofuels.

BP Statistical Review of World Energy

© BP p.l.c. 2015

5

6

Changing oil cost curve

7

9 118

9 610

9 096

9 202

8 000

8 500

9 000

9 500

10 000

500

700

900

1 100

1 300

1 500

янв

03

, 20

14

мар

03

, 20

14

май

03

, 20

14

ию

л 0

3, 2

01

4

сен

03

, 20

14

но

я 0

3, 2

01

4

янв

03

, 20

15

мар

03

, 20

15

май

03

, 20

15

ию

л 0

3, 2

01

5

сен

03

, 20

15

но

я 0

3, 2

01

5

OIL RIGS, total Field Production of Crude Oil (RHS)

US oil output has been declining since early June,

yet still is higher than a year ago; moreover there

has been increased resilience lately

Units Kbd

Source: US EIA, PIRA

8

US new-well production per rig

BP Statistical Review of World Energy

© BP 2015

0

50

100

150

200

250

300

350

400

450

2007 2009 2011 2013 2015

Gas Oil

Boe/d per rig

Source: US EIA

9

Industry costs falling

20

40

60

80

100

120

140

160

100

150

200

250

2000 2005 2010 2015

Cost Index (2000=100) Brent $/bbl

Capital Costs

Operating Costs

Brent (RHS)

Source:: IHS

10

Supply side reaction to lower oil price

11

OPEC production exceeds 2014 level by 1.6 Mbd

12

Iraqi oil output growth is slowing, yet is still 1 Mbd

higher than a year ago

Source: PIRA

Kbd

13

Oil demand grows strongly in both 2015

and 2016

14

Weekly U.S. Net Imports of Crude Oil and

Petroleum Products

4000

8000

12000

16000

Kbd

Source: US EIA

15

Oil market will likely remain oversupplied until

3Q16

16

OECD oil stocks are at record levels and might

approach physical limits in 1Q16

17

US Total Stocks of Crude Oil and Petroleum

Products (Excl. SPR)

800

900

1000

1100

1200

1300

1400

янв

05

, 19

90

янв

05

, 19

91

янв

05

, 19

92

янв

05

, 19

93

янв

05

, 19

94

янв

05

, 19

95

янв

05

, 19

96

янв

05

, 19

97

янв

05

, 19

98

янв

05

, 19

99

янв

05

, 20

00

янв

05

, 20

01

янв

05

, 20

02

янв

05

, 20

03

янв

05

, 20

04

янв

05

, 20

05

янв

05

, 20

06

янв

05

, 20

07

янв

05

, 20

08

янв

05

, 20

09

янв

05

, 20

10

янв

05

, 20

11

янв

05

, 20

12

янв

05

, 20

13

янв

05

, 20

14

янв

05

, 20

15

Million barrels

18

Forward price contango is insufficient to incentivize

floating storage

Brent forward curve spread

Source: includes data from the International Energy Agency © OECD/IEA 2015 and Platts.

$/bbl

Brent Forwards, as of Dec 4, 2015

$/bbl

19

Brent weekly

$/bbl

35,38 36,84

0

20

40

60

80

100

120

140

160

Source: Thomson Reuters