INTERNATIONAL ENERGY AGENCY World Energy Outlook 2004World Energy Outlook 2004 Russia Presentation Background World Energy Outlook 2004 Exhaustive energy statistics and projections by fuel and region to 2030 Special features of 2004 WEO: In-depth study of Russian energy supply and demand prospects An alternative policy scenario for a more sustainable energy world Analysis of the high-oil price phenomenon and the reliability of oil reserves data An analysis of the links between energy and development Share of Russia in World Energy, 2002 Russia’s energy production remains low relative to its reserves of coal and gas, but is high for oil 0 5 10 15 20 25 30 Coal Oil Gas per cent Proven reserves Production Exports Demand Russian Primary Energy Demand by Fuel Russia’s energy production remains low relative to its reserves of coal and gas, but is high for oil 17% 28% 4% 4% 47% 53% 6% 3% 21% 17% Coal Oil Gas Nuclear 776 Mtoe 619 Mtoe 1992 2002 Renewables Growth in Industrial Production in Russia Oil & gas sector contributed more than half of the increase in Russia’s industrial production in 2002 and 2003 -4 -2 0 2 4 6 8 10 1996 1997 1998 1999 2000 2001 2002 2003 percent Oil industry Gas industry Other Contribution of Oil & Gas Sectors to GDP, 2002 Importance of oil & gas sector in the Russian economy has grown sharply in recent years, approaching that of some OPEC countries 0% 5% 10% 15% 20% 25% 30% 35% Canada Norway Russia Algeria Iran Russian Energy Trends: Reference Scenario Outlook for Russian Primary Energy Demand by Fuel Russian energy demand is projected to grow steadily, with natural gas remaining the dominant fuel 0 100 200 300 400 500 600 700 800 900 1992 1997 2002 2007 2012 2017 2022 2027 Mtoe Coal Oil Gas Nuclear Hydro Other Energy Intensity Indicators in Russia There is considerable scope for reducing energy intensity & improving the efficiency of energy use in Russian industry 0 20 40 60 80 100 120 140 160 180 1990 2000 2010 2020 2030 Index(2002=100) Primary energy demand/GDP using PPPs Primary energy demand per capita Energy Intensity of Industrial Production in Selected Sectors There is considerable scope for reducing energy intensity & improving the efficiency of energy use in Russian industry 0 0.5 1 1.5 2 Iron and steel Chemical and petrochemical Non-ferrous metals Non-metallic minerals Food and tobacco toe per thousand $ (2000) Russia United States Japan Germany (1999) United Kingdom Russian Oil Balance Production is projected to slow, causing exports to peak by around the end of the current decade 0 2 4 6 8 10 12 1990 1995 2000 2005 2010 2015 2020 2025 2030 mb/d Net exports Consumption Production Russian Oil Production Prospects Capacity additions will have to come more from new greenfield developments in W. Siberia & other, less mature basins Russian Oil Market Uncertainties Sustainability of production growth Impact on upstream investment of: expected fall-back in oil prices on upstream recent tax reforms on investment Export infrastructure constraints Industry restructuring and role of the state Russian Oil Industry Structure & the Role of the State The government is reasserting state control over the sector Private crude oil pipelines will not be permitted Transneft, the pipeline monopoly, will remain in state hands Taxes on producers are being increased and malpractices being pursued more vigorously Big new foreign stakes in Russian companies unlikely Back-door privatisation if Gazprom-Rosneft snaps up Yugansk stake Russian Gas Production Higher Gazprom and independent production will meet both rising domestic and export demand 0 250 500 750 1 000 1992 2002 2010 2020 2030 bcm Primary domestic consumption Exports to OECD Europe Net exports to other transition economies Exports to Asia/Pacific Russian Gas Production Prospects Russia will need to bring several new fields on stream to stem the decline from the three old super-giants Russian Gas Market Uncertainties Market reforms & stable business regime needed to secure the necessary financing and promote competition Tariff reform and elimination of subsidies, to raise domestic prices gradually to full-cost levels Access for independent producers to the national transmission system operated by Gazprom Russian Coal Balance There is considerable scope for reducing energy intensity & improving the efficiency of energy use in Russian industry 0 50 100 150 200 250 300 350 1992 2002 2010 2020 2030 milliontonnes Domestic primary consumption (incl. stock changes) Net exports Net Additions to Russian PowerGeneration Capacity There is considerable scope for reducing energy intensity & improving the efficiency of energy use in Russian industry -10 0 10 20 30 40 2002-2010 2010-2020 2020-2030 GW Coal Oil Gas Nuclear Hydro Other Proposed Structure of Russian Electricity Industry after Planned Reforms Effective competition in electricity supply is expected to boost system efficiency and attract much-needed investment Russian Fossil-Fuel Exports as Share of World Inter-regional Trade 0% 5% 10% 15% 20% 25% 30% Coal Oil Gas 2002 2010 2020 2030 Russia will continue to play a central role in global energy supply and trade, with major implications for energy security Energy Investment Needs in Russia, 2003-2030 Export-oriented oil & gas projects will be easiest to finance $ 1 trillion Oil 40% Electricity 27% Gas 32% Coal 1% Russian Energy-Related CO2 Emissions Emissions increase, but not enough to reach the Kyoto ceiling, allowing Russia to sell surplus emission credits 0 500 1 000 1 500 2 000 2 500 1992 2002 2010 2020 2030 MtofCO2 Industry Transport Power generation Other 1990 level = 2326 Mt Russian Energy Trends: Alternative Policy Scenario Alternative Policy Scenario Analyses impact of new environmental & energysecurity policies worldwide Key assumptions for Russia: More gas-fired and nuclear power generation, less coal Fewer thermal losses in power generation & transmission Stricter building codes & more efficient industrial equipment Basic macroeconomic & population assumptions as for Reference Scenario, but energy prices change Change in Primary Energy Use & CO2 Emissions in the Alternative Scenario -21% 0% 2020 2030 ChangecomparedtotheReferenceScenario Primary energy demand Emissions New government policies cut demand and boost the use of lower or zero-carbon fuels, cutting emissions even more Summary & Conclusions Summary & Conclusions Russian economy has become more dependent on the oil & gas industry in recent years Russia will continue to play a central role in global energy supply and trade The prospects for Russian oil production are very uncertain Market reforms crucial to gas and electricity investment and supply prospects Energy investment of almost $700 billion (2003- 2030) – more than half for upstream oil & gas A stable and predictable business regime will be critical to energy financing