WORLD
ENERGY
INVESTMENT
OUTLOOK
Increase in World Energy
Production and Consumption
7,000
6,000
Mtoe
5,000
4,000
3,000
2,000
1,000
0
Production
OECD
Consumption
Transition economies
Production
Consumption
Developing countries
Almost all the increase in production occurs outside the OECD,
compared with 60% in 1971-2000
Global Investment
Outlook
World Energy Investment
2001-2030
Total investment: 16 trillion dollars
E&D
46%
72%
Refining
Other
13%
15%
E&D
55%
LNG Chain
8%
T&D and
Storage
37%
Oil 19%
Electricity
60%
Gas 19%
Coal 2%
Power
generation
54%
T&D
88%
Mining
12%
Shipping
and ports
Production accounts for the majority of investment in the supply
chain – except for electricity
Energy Investment by Region
2001-2030
3,500
20
3,000
2,500
15
2,000
10
1,500
1,000
5
500
0
0
OECD
North
America
China
OECD
Europe
Other Asia
Africa
Russia
Middle East
OECD
Other Latin
Pacific
America
India
Other
Brazil
transition
economies
Almost half global energy investment will be needed in
developing countries
share in global investment (%)
cumulative investment (billion dollars)
4,000
Energy Investment by Fuel
2001-2030
12,000
2%
billion dollars
10,000
20%
8,000
2%
14%
6,000
17%
23%
4,000
61%
62%
2,000
0
OECD
Electricity
Non-OECD
Gas
Oil
Coal
Electricity sector absorbs most energy investment & the oil and
gas industry almost all the rest
Fuel Share in Energy Investment
Requirements
2001-2030
India
China
Other Asia
OECD
Latin America
Other transition economies
Africa
Russia
Middle East
0%
10%
20%
30%
40%
Electricity
50%
Oil
60%
70%
Gas
80%
90%
100%
Coal
Electricity sector dominates investment in most regions, but oil
and gas absorb the lion’s share in Russia and Middle east
Financing Issues
Energy Investment Share in GDP
2001-2030
Russia
Africa
Other transition economies
Middle East
China
India
Other Asia
Latin America
World average
OECD
0
1
2
3
4
5
6
per cent
The share of energy investment in the economy is much higher in
developing countries and the transition economies than in the OECD
Energy Investment & Domestic
Savings
Russia
Africa
Other transition economies
Middle East
China
India
Other Asia
Latin America
OECD
0
5
10
15
20
25
30
35
40
per cent of GDP
Energy investment
Domestic savings
Domestic savings are easily large enough to cover energy financing
needs in all regions, but only by a factor of two in Africa
Domestic Savings & Investment
2000
China
Russia
Middle East
OECD
India
Brazil
Other Asia
Other transition economies
Other Latin America
Africa
0
5
10
15
20
25
30
35
40
per cent of GDP
Domestic savings
Domestic investment
Russia has a large surplus of capital, while Africa and Latin America
have big deficits
Return on Energy Investment
1993-2002
16
14
12
per cent
10
8
6
4
2
0
Oil and gas upstream
Electricity
OECD
Gas downstream
Non-OECD
Higher returns generally in non-OECD countries reflect higher risks –
but not the case for electricity
Oil Investment
Outlook
Oil Investment by Region
Asia
Latin America
Africa
Transition economies
Middle East
OECD
0
5
10
15
20
25
30
35
billion dollars per year
Exploration & development
Non-conventional oil
Refineries
Most investment outside the OECD will be needed in the Middle
East and the transition economies – mainly in the upstream
Indicative Oil Development Costs
& Proven Reserves by Region
14,000
4,000
2,000
Middle East
OECD
6,000
Transition economies
Asia
8,000
Latin America
10,000
Africa
dollars per b/d of capacity
12,000
0
0
200
400
600
800
1,000
proven reserves (billion barrels)
Development costs are lowest in the Middle East – which holds
most of the world’s remaining reserves
Oil Production and Capacity
Additions
250
200
mb/d
150
100
50
0
2000
Production
2030
Expansion to meet demand growth
2001-2030
Replacement to maintain capacity
The bulk of additions to crude oil production capacity will be
needed simply to maintain capacity
Gas-to-Liquids Investment
2001-2030
14
12
billion dollars
10
8
6
4
2
0
OECD Pacific OECD North Latin America
America
2001-2010
Africa
2011-2020
East Asia
Middle East
2021-2030
GTL investment takes off in the second decade, with the Middle
East attracting the largest share
Refining Investment by Region
2001-2030
140
120
billion dollars
100
80
60
40
20
0
Asia
Middle East OECD North
America
Africa
Latin
America
Transition
economies
OECD
Pacific
OECD
Europe
Asia and the Middle East will absorb most refining investment,
mainly for new refinery construction
Major World Oil Trade
Movements
2002 & 2030 (mb/d)
The Middle East will account for the bulk of increased exports,
much of it to Asia-Pacific
Access to Oil Reserves
Iraq
10%
National
companies only
(Saudi Arabia,
Kuwait, Mexico)
35%
Concession
21%
Production
sharing
12%
Limited access National
companies
22%
1,032 billion barrels
Access to much of the world’s remaining oil reserves is restricted
Middle East Oil Investment
billion dollars
600
400
200
0
2001-2010
2011-2020
Exploration & development
2021-2030
Total
2001-2030
Refining
Middle East oil investment needs – mainly upstream – grow rapidly
over the projection period
Middle East Oil Production
& Capacity Additions
90
80
70
mb/d
60
50
40
30
20
10
0
1990
2000
Production for domestic market
2010
2020
Production for export
2030
2001-2030
Capacity additions
The Middle East will need to add almost 80mb/d of cumulative capacity
– mainly to replace depleted wells and to meet export demand
Saudi Arabia Budget Surplus
& Crude Oil Prices
15
50
10
40
billion dollars
30
0
20
dollars per barrel
5
-5
10
-10
-15
0
1998
1999
2000
Budget
2001
2002
2003*
Price (right axis)
Saudi Arabia currently needs an oil price (WTI) of at least $25 to
balance its budget
Iraq Oil Investment Scenarios
60
cumulative investment (billion dollars)
2030
50
2030
40
2030
2020
30
20
2020
2020
2010
10
2010
2010
0
2
3
4
5
6
7
8
9
10
production (mb/d)
Restoration of production capacity
Slow production expansion
Reference Scenario
Rapid production expansion
Iraq will need to invest around $5 billion to raise oil production
capacity to almost 4mb/d by 2010 in the Reference Scenario
Upstream Investment Needs &
Production in OPEC Middle East
60
20
production (mb/d)
15
40
30
10
20
5
10
0
2000
0
2010
2020
Average annual investment by decade (right axis)
2030
Production
OPEC Middle East oil production and investment surge in
Reference Scenario due to region’s balancing role
investment (billion dollars)
50
OPEC Middle East Share in
Global Oil Supply
50
per cent
40
30
20
10
0
1970
1980
1990
2000
Restricted Investment Scenario
2010
2020
2030
Reference Scenario
OPEC Middle East’s share of global oil production is assumed to
remain flat at under 30% in Restricted Investment Scenario
OPEC Revenues in Different
Scenarios
2001-2030
billion dollars
12,000
10,000
8,000
6,000
OPEC
Reference Scenario
OPEC Middle East
Restricted Investment Scenario
Oil revenues in OPEC Middle East producers are substantially
lower in the Restricted Investment Scenario
Change in Investment Needs
Restricted Investment vs Reference
Scenario
120
2021-2030
80
billion dollars
2011-2020
40
2001-2010
0
-40
-80
-120
Middle East OPEC
Other countries
World
Global oil investment rises in the Restricted Middle East Oil Investment
Scenario – because development costs outside the region are higher
Natural Gas
Investment Outlook
Global Gas Investment
140
billion dollars per year
120
100
80
60
40
20
0
1991-2000
2001-2010
Exploration & development
2011-2020
Transmission
Distribution
2021-2030
LNG
Storage
E&D will continue to account for most gas investment, but the
share of LNG jumps in the current decade
Gas E&D Investment &
Incremental Production
2001 - 2030
Incremental Production
E&D Investment
OECD
10%
Othe
20%
Transition
economies
18%
Other
32%
OECD
48%
Africa
9%
Middle East
8%
Transition
economies
15%
$ 1.7 trillion
Middle
East
23%
Africa
17%
2,767 bcm
OECD countries will account for almost half total upstream gas
investment, but only 10% of additional production
Oil & Gas Investment & Indexed
Production
90
250
billion dollars per year
200
70
60
150
50
40
100
30
20
50
10
0
production index (year 2000=100)
80
0
2000
2001 - 2010
Oil investment
Oil production index
2011 - 2020
2021 - 2030
Gas investment
Gas production index
Investment in gas supply will increase faster than that in oil, and
will be almost as big by the end of the projection period
Indicative Gas E&D Costs and
Proven Reserves by Region, 2002
0.4
Transition
Transitioneconomies
economies
Middle East
OECD Europe
OECD North America
0.1
Asia
Latin America
0.2
Africa
dollars per cm of capacity
0.3
0.0
0
20
40
60
80
100
120
140
160
proven gas reserves (tcm)
The Middle East and transition economies have the lowest
development costs and most remaining gas reserves
Annual Gas Capacity Additions
400
bcm
300
200
100
0
2001-2010
2011-2020
Expansion to meet demand growth
2021-2030
Replacement
The bulk of new capacity additions will increasingly be needed
simply to replace exhausted wells
Net Inter-regional Trade
& Production
5,400
4,800
4,200
bcm
3,600
3,000
2,400
1,800
1,200
600
0
2001
Production
2010
LNG trade
2020
2030
Pipeline trade
A growing share of gas will be traded between regions, much of it
in the form of LNG
Liquefaction & Regasification
Capacity
1,000
900
Liquefaction
800
Regasification
million tonnes
700
600
500
400
300
200
100
0
2001
2010
Asia - exporters
Russia
Japan
2020
2030
2001
Africa
Latin America
Other Asia - importers
2010
2020
2030
Middle East
OECD Europe
OECD North America
Regasification capacity will grow less rapidly than liquefaction as
spare capacity declines – especially in Japan
LNG Shipping Fleet
400
350
number of ships
300
250
200
150
100
}
50
0
in operation (2001)
Liquefaction project developers
Oil & gas companies
Projected
On order
in 2001
additions 2002-2030
LNG buyers
Ship owners
A 6-fold increase in LNG trade between 2002 and 2030 will call for
massive investment in new carriers
Length of Transmission Pipelines
800
thousand km
600
400
200
0
North
America
Transition
economies
OECD
Europe
Asia
Installed transmission pipelines (2000)
Middle East
Latin
America
Africa
OECD
Pacific
Pipeline additions (2001-2030)
North America, which already has the largest transmission
system in the world, will expand its system the most…
Length of Distribution Networks
3,000
thousand km
2,500
2,000
1,500
1,000
500
0
North
America
OECD
Europe
Transition
economies
Asia
Installed distribution pipelines (2000)
Latin
America
Middle East
OECD
Pacific
Africa
Pipeline additions (2001-2030)
…and its distribution networks too
Indicative LNG Unit Capital Cost
700
dollars per tonne of capacity
600
500
400
300
200
100
0
Mid-1990s
Liquefaction
2002
2010
Shipping
2030
Regasification
The recent dramatic fall in LNG costs is expected to continue
Levelised Cost of LNG Imports
into US Gulf Coast
3.50
3.00
Henry-Hub average price, 19982002
$/MBtu
2.50
2.00
1.50
1.00
0.50
0.00
Trinidad
Upstream
Nigeria
Venezuela
Liquefaction
Shipping
Egypt
Qatar
Regasification
Lower capital costs are making LNG imports more economic – and
more competitive with domestic supply projects
Coal Investment
Outlook
Coal Industry Investment
2001-2030
Mining by
region
Shipping
$34
OECD
$128
China
$121
Mining
$351
Ports
$13
Transition
economies
$32
Other
Developing
countries
$70
Total investment: $ 398 billion
Almost all coal investment will be for mining – a third of it in
China alone
Coal Mining Investment
2001-2030
140
120
billion dollars
100
80
60
40
20
0
China
OECD OECD
North Pacific
America
OECD
Europe
Mining - expansion
India
Africa
Other Russia Indonesia Latin
transition
America
economies
Mining - replacement
Other
Sustaining
Most mining expansions will occur in China and other Asian
countries
Mining Investment by Type and
Region
2001-2030
Other
Developing
countries
20.0%
OECD
36.5%
new capacity
46%
sustaining
33%
sustaining
54%
new capacity
67%
new capacity
65%
sustaining
35%
sustaining
32%
China
34.4%
Transition
economies
9.1%
new capacity
68%
The share of sustaining investment is highest in OECD countries
Coal Production by Region
2030
6954 Mt
2000
4595 Mt
India
7%
Africa
5%
EU 15
7%
Indonesia
2%
OECD North
America
23%
China
27%
India
9%
EU 15
3%
Other OECD
Europe
5%
OECD North
America
19%
China
33%
OECD Pacific
7%
Latin America
1%
Other
transition
economies
6%
Indonesia
4%
Other OECD
Europe
7%
Africa
6%
OECD Pacific
8%
Other
3%
Russia
5%
Latin America
2%
Other
transition
economies
5%
Other
2%
Russia
4%
China’s share of global production will grow most rapidly
Additional Coal Mining Capacity
2001-2030
2,500
Mt of Capacity
2,000
1,500
1,000
500
0
China
OECD
North
America
India
OECD OECD
Pacific Europe
Africa
Other Indonesia Russia Latin
Other
transition
America
economies
Expansion to meet demand growth
Replacement
The share of sustaining investment is highest in OECD countries
Weighted Average Productivity,
Coal Price, and Investment Costs
80
70
10
60
8
50
6
40
30
4
20
2
10
0
0
1980-1985
1985-1990
1990-1995
Productivity
Steam coal export price
1995-1999
1999-2003
Investment cost
dollars per tonne
productivity (1,000t / miner-year)
12
Main Inter-Regional Coal Exports
2000 (Mtce)
Australia is by far the world’s biggest exporter…
Main Inter-Regional Coal Exports
2030 (Mtce)
… and will remain so in 2030
Global Coal Investment &
Production
Reference and Alternative Policy Scenarios
160
7,500
140
7,000
120
-7.5%
6,500
80
6,000
60
5,500
40
million tonnes
billion dollars
100
5,000
20
4,500
0
-20
2001-2010
2011-2020
Investment -Reference
Investment - difference
Production - Alternative (right axis)
2021-2030
4,000
Investment - Alternative
Production - Reference (right axis)
Lower coal production worldwide and lower OECD imports yield a
6% reduction in global coal investment
Electricity Sector
Investment Outlook
Electricity Sector Investment by
Region
2001-2030
2,500
billion dollars
2,000
1,500
1,000
500
0
China
Other
Latin Africa
Asia America
Middle
East
US and European OECD
Canada Union Pacific
Other
OECD
Russia Rest of
TE
China will need more electricity investment than any other
country or region
Electricity Investment as Share
of GDP
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
OECD
China
India
1991-2000
Indonesia
Russia
Brazil
Africa
2001-2010
Medium-term electricity sector investment needs will increase
relative to GDP in almost all non-OECD regions
OECD Power Sector Investment
1,600
1,400
billion dollars
1,200
1,000
800
600
400
200
0
2001-2010
2011-2020
Power generation (new and refurbishment)
2021-2030
Transmission
Distribution
Power generation will absorb a growing share of OECD
electricity-sector investment
OECD Electricity Sector
Investment Relative to GDP
1.0%
0.9%
0.8%
0.7%
0.6%
0.5%
0.4%
0.3%
0.2%
0.1%
0.0%
Greece
Canada
Japan
US
Portugal
1995
Ireland
Sweden
Spain
Italy
UK
Netherlands Germany
2000
Electricity sector investment relative to GDP has risen in the US –
bucking the trend in most other OECD countries
Average Age of OECD Power
Plants
2003
1,000
800
GW
600
400
200
0
<20 years
Fossil
>20 years
Nuclear
Most fossil-fuel power stations in North America and Europe are
more than 20 years old
OECD Investment in Alternative
and Reference Scenarios
4,000
3,500
billion dollars
3,000
2,500
2,000
1,500
1,000
500
0
Reference
Generation
Alternative
Transmission
Distribution
Transmission and distribution investments are much lower in
Alternative Scenario, but generation investment hardly falls...
Share of Renewables in
Electricity Generation
30%
25%
20%
15%
10%
5%
0%
2000
2030 Reference
Non-Hydro
2030 Alternative
Hydro
…because the share of non-hydro renewables, which are more
capital-intensive, rises, offsetting the reduction in electricity demand
Power Sector Investment in
Developing Countries
2,500
billion dollars
2,000
1,500
1,000
500
0
2001-2010
2011-2020
Power generation (new and refurbishment)
2021-2030
Transmission
Distribution
Investment in developing countries should rise over time but
there is no guarantee that it will be forthcoming
Power Generation Capacity
Additions in Developing Countries
1971-2000
1,200
1,000
GW
800
600
400
200
0
1971-1980 1981-1990 1991-2000 2001-2010 2011-2020 2021-2030
Developing countries will need to add increasing amounts of new
generating capacity over the next three decades
Power Sector Private Investment
in Developing Countries
50
45
40
billion dollars
35
30
25
20
15
10
5
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Developing countries will need to reverse the slump in private
capital flows if projected investment is to be forthcoming
Investment to Ensure Universal
Electricity Access
2001-2030
2,000
Additional investment breakdown
Isolated
15%
billion dollars
1,500
Grid
extension
Mini-grid
49%
36%
1,000
500
0
China
South Asia
Africa
Reference Scenario
East Asia
Latin
America
Middle
East
Electrification Scenario
More than $660 billion is needed to supply basic electricity
services to the world’s very poor – mainly in Africa and South Asia
Additional Power Generation
Electrification Scenario in 2030
500
450
400
350
TWh
300
250
200
150
100
50
0
Africa
South Asia
Grid extension - urban
Mini-grid
East Asia
Latin America Middle East
Grid Extension - Rural
Autonomous off-grid
Power supply grows most rapidly in Africa in the Electrification
Scenario with universal access to electricity services
Additional Investment in
Electrification Scenario
2001-2030
300
billion dollars
250
200
150
100
50
0
Africa
South Asia
Grid extension
East Asia
Mini-grid
Latin America Middle East
Autonomous off-grid
Most investment needed for grid extensions – which will be more
easily financed than mini-grid and off-grid options