Farouk Al-Zanki
KPC CEO
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Global Energy Outlook:
Changing Patterns
Distinguished Guests
Ladies & Gentlemen,
Good morning
It is pleasure to be back and take part of this great event, OTC
week.
I would like to thank the organizers for inviting me to address
this plenary session.
OTC is indeed an established part of the international energy
calendar and provides an outstanding forum for high-level
discussions on issues affecting our industry, so I am pleased
to be part of this event.
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1
OTC
29/4/-3/5/2012
HUSTON. USA
Farouk Al-Zanki
KPC CEO
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Ladies and Gentelmen
Our industry is faced with great challenges. Nevertheless, we
have to continue to plan and invest over the long-term to
provide energy responsibly, reliably and safely, and also to
constantly balance the economic and human progress with
the desire for environmental protection.
Collectively, we must bolster our commitment to solutions
that address the energy supply, security, efficiency, and
environmental goals that we all share.
The indusrty’s history is marked by both its challenges and its
successes.
We face the challenge of meeting the world’s growing energy
needs, while at the same time protecting the environment.
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2
OTC
29/4/-3/5/2012
HUSTON. USA
Farouk Al-Zanki
KPC CEO
__________________________________________________________________________________
We have consistently been able to meet the increased
demand for energy over time.
Energy security will remain the cornerstone of economic
growth.
Energy security centres on availability, reliability and
affordability of supply.
The best way to achieve the energy security that we all need
is through diversification of energy supply.
The market has witnessed a significant upward trend on oil
prices as a result of strong market fundamentals and
geopolitical tensions.
This has happened despite, OPEC’s production increases in
recent years which is now well above 31 million barrels per
day.
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3
OTC
29/4/-3/5/2012
HUSTON. USA
Farouk Al-Zanki
KPC CEO
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The demand growth picture appears moderate in 2012, being
at 1.0 million barrels per day.
Non-OPEC supply growth continues to fall behind world
demand growth leaving OPEC to meet the bulk of rising
demand.
OPEC’s willingness and ability to supply the incremental
barrel demonstrates the importance it attaches to the future
of the oil industry.
However, there are obstacles, with uncertainties over future
levels of oil demand translating into a wide range of possible
levels of necessary investment in OPEC Member Countries.
The principal target for our industry is to guarantee the
supply of energy to consumers at levels that match demand
and at prices that are reasonable, at the same time enabling
fair and adequate returns to investors.
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4
OTC
29/4/-3/5/2012
HUSTON. USA
Farouk Al-Zanki
KPC CEO
__________________________________________________________________________________
Let me now, show some energy statistics,
Over the period 2010–2035, commercial primary energy
demand will increase by 51%. Fossil fuels, currently
accounting for 87% of primary commercial energy supply, will
still make up 82% of the global energy mix by 2035.
For most of the projection period, oil will remain the energy
type with the largest share, with its share falling from the
cuurent level of 34% to 28%.
Gas use, on the other hand, will rise at faster rates, with its
overall share in the energy mix rising from 23% to 25%.
Over the long-term, increases in conventional oil supply from
the Caspian and Brazil, as well as steady increases in nonconventional oil, mainly from biofuels, oil sands and shale oil,
will more than compensate for the expected decrease in
mature regions.
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5
OTC
29/4/-3/5/2012
HUSTON. USA
Farouk Al-Zanki
KPC CEO
__________________________________________________________________________________
Total non-OPEC non-conventional oil supply thereby rises.
The total increase of non-crude liquids supply will satisfy
more than three quarters of the demand increase to 2035.
OPEC crude supply rises throughout the period to 2035,
reaching just over 39 million barrels per day, including
additional supply necessary for stocks.
The share of OPEC crude in total supply by 2035 is 36%, not
markedly different from current levels.
One of the most profound shifts in energy usage through
2035 will come from the transportation sector.
The expansion of hyprid and other advanced vehicles along
with improvements to conventional – vehicle efficiency will
result in flattening demand for personal transportation, even
as the number of personal vehicles in the world doubles.
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6
OTC
29/4/-3/5/2012
HUSTON. USA
Farouk Al-Zanki
KPC CEO
__________________________________________________________________________________
In contrast, demand for fuel for commercial transportation –
trucks, airplanes, trains and ships will continue to rise
sharply.
The electricity generation sector is essential to meeting
modern energy needs.
Utilities and other electricity producers transform different
types of primary energy.
That is everything from natural gas to coal to wind and hydro
electric power into electricity to be used in houses and
business.
Through 2035, global demand for electricity will continue to
rise steeply as the fuel need for electricity generation
continue to shift to lower- carbon sources, crude natural gas,
nuclear and renewables.
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7
OTC
29/4/-3/5/2012
HUSTON. USA
Farouk Al-Zanki
KPC CEO
__________________________________________________________________________________
In Kuwait, the oil & gas growth 2030 strategy is aimed
towards bridging the demand gap, as well as making energy
more accessible to consumers in emerging economies and
the developing world.
This strategy include: building production capacity to 4MM
BOPD from the current level of 3MM BOPD by year 2020.
In addition, we develop the non-associated gas which has
been recently discovered in 2006, to reach intensely 600
Million SCF per day by 2014 and to ultimatelly 2 Billion SCF
per day by 2020.
Currently, our non-associated gas production averages 130
Million SCF per day, so there is a big challenge lies ahead.
As for the refining and petrochemical sector, our plan is to
raise capacity from the current level of 930,000 BPDOE to 1.4
million BPDOE by 2015, through building grassroot refinery of
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8
OTC
29/4/-3/5/2012
HUSTON. USA
Farouk Al-Zanki
KPC CEO
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the capacity of 614 MBPDOE for the production of low sulfur
fuel for power generation inside Kuwait, and upgrading two
existing refineries for the production of clean products such
as diesel, gas oil with sulfur content not exceeding 10 ppm
and this is mainly for export purpose.
As for petrochemical, our plan is to build olefin 3 by 2018, to
achieving overall capacity of 3 million tons.
So far, I have generally been talking about local expansions in
Kuwait.
However, we are also expanding our activities outside Kuwait
mainly in international growing market such as China and
India through joint ventures.
We expect to invest more than 270 billion US dollars on
upstream and downstream projects over the next five years.
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9
OTC
29/4/-3/5/2012
HUSTON. USA
Farouk Al-Zanki
KPC CEO
__________________________________________________________________________________
Solar energy is playing an increasingly important role in
meeting world energy demands, accordingly, KPC has taken a
strategic decision to conserve Kuwait hydrocarbon resources
by introducing solar energy technology to replace part of the
usage of hydrocarbon fuels in its operating companies, which
is also considered by the Corporation as one of the initiatives
of its long-term strategy concerning carbon management
that aims at minimizing the emissions of green gases like
carbon dioxide and other harmful gases of its subsidiaries.
Distinguished guests,
Just to conclude my speech, I’d like to state that the
availability, reliability and affordability of energy are vital for
future well-being and prosperity of everyone in all societies.
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10
OTC
29/4/-3/5/2012
HUSTON. USA
Farouk Al-Zanki
KPC CEO
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If we succeed to foster parnership on win-win basis, then we
can deliver reliable access to affordable energy and build a
brighter energy future for all.
In this regards, I wish to stress that Kuwait is fully committed
to its international role as a reliable producer of crude oil,
and will devote its utmost efforts to fulfill its role and
responsibilities towards stable world oil markets.
Thank you very much.
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11
OTC
29/4/-3/5/2012
HUSTON. USA