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WWW.IEFS.ORG.SA CASPIAN ENERGY FORUM, MOSCOW, 15-16 JULY 2008

Noé van Hulst

Secretary General

International Energy Forum

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WWW.IEFS.ORG.SA CASPIAN ENERGY FORUM, MOSCOW, 15-16 JULY 2008

Main Global Energy Trends

Key Global Energy Challenges

IEF Role in Energy Dialogue

Outline

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WWW.IEFS.ORG.SA CASPIAN ENERGY FORUM, MOSCOW, 15-16 JULY 2008

Main Global Energy Trends

World Energy Demand Grows

Significantly

Fossil Fuels Dominate the

Energy Mix

Increasing Interdependence

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WWW.IEFS.ORG.SA CASPIAN ENERGY FORUM, MOSCOW, 15-16 JULY 2008

World Primary Energy Demand

11 429 MTOE 17 721 MTOE*

IEA WEO 2007*MTOE – Million Tons of Oil Equivalent

20302005

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IEA WEO 2007 Reference Scenario

Net Oil Trade

mb / d

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Net Gas Trade

IEA WEO 2007 Reference Scenario

bcm

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WWW.IEFS.ORG.SA CASPIAN ENERGY FORUM, MOSCOW, 15-16 JULY 2008

Key Global Energy Challenges

Availability

Oil & Gas Resources

Deliverability

Investment

Affordability

Oil Price

Sustainability

CO2

Emissions

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WWW.IEFS.ORG.SA CASPIAN ENERGY FORUM, MOSCOW, 15-16 JULY 2008

Distribution of Proved Oil & Gas Reserves 2007 (percentage)

5.6

9.0

9.5

11.6

61.0

3.3

Middle East

Africa

Europe & Eurasia

S. & C. America

North America

Asia Pacific

4.5

4.4

8.2

33.5

41.3

8.2

Middle East

Africa Europe & Eurasia

S. & C. America

North America

Asia Pacific

OIL GAS

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Cumulative Investment in Energy-Supply Infrastructure 2006 – 2030

($ billion in Year 2006 dollars)

IEA WEO 2007 Reference Scenario

1377

7692968

246

OilOECD

Transition Economies

Developing Countries

Inter-Regional Transport

Middle East: 1074 Russia: 568

$5 360billion

1774

657

1716

82

Gas

Russia: 492

$4 229billion

Middle East: 430

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0

5

10

15

20

25

30

35

40Standard deviation

05 July 08

Rolling Variance of Daily Spot Price of WTI Relative to the Mean of the Past 20 Days (month)

Volatility of Spot Oil Prices

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WWW.IEFS.ORG.SA CASPIAN ENERGY FORUM, MOSCOW, 15-16 JULY 200811

• Lower crude oil spare capacity

• Limited refining capacity

• Fears of supply disruptions

• Concerns over resource base

• Pressure of distillates on prices

Recent oil price developments (1)Causes are multiple, complex and with varying degrees of influence…

Market Fundamentals

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Other important causes…

• Increasing interaction between oil and financial

markets

•Uncertainties about policies

• monetary, fiscal, energy, investment, trade and environmental

•Unrealistic assessment of oil market situation

and price projections by some

Recent oil price developments (2)

Non-Fundamentals

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Present oil price rise and persistent volatility, if unchecked, will be detrimental to long-term oil market stability and world economy.

•Adverse impact on economic growth, especially in

least-developed countries

•Higher inflation risks

• Increased flow of investment into alternative fuels

•Price volatility gives confusing signals to investors

• Increased activity of funds in oil futures markets

Consequences of oil price developments

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Energy Related CO2 Emissions by Fuel and Scenario

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How?

High-level platforms involving governments and industry

Practical ways to improve:

•Market transparency in oil & gas

• Investment conditions

What?

Enhance and deepen global consumer-producer dialogue

Promote more stable and transparent energy markets

Mission of IEF

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How?

Enhance international oil market transparency through exchange and release of monthly oil data at the global level

What?

Improve global oil market stability and predictability

Support sound planning and enhance global energy security

Joint Oil Data Initiative

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Investment

Unpacking Uncertainty

BottlenecksNOC / IOC

Cooperation

Investment Conditions

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Key Results IEF Rome 20-22 April 2008

Investment

Tackle Key Uncertainties

(e.g. biofuels, skill shortages, scarcity fear)

Transparency

Boost JODI and Extend to Gas

Sustainability

Boost Energy Efficiency and

Carbon Capture & Storage (CCS)

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• Increase Upstream and Downstream Investment to Increase Supply

• Promote Energy Efficiency to Dampen Demand

• Improve Transparency and Regulation of Financial Markets

• Enhance Transparency of Oil Data through Improvement and Extension of JODI

• Strengthen Collaboration between IEA/OPEC/IEF on Shared Analysis of Oil Market

• Intensify Development Assistance to Least-developed Countries

• Improve Co-operation between IOCs/NOCs/Service Companies

Key Points – Joint Statement - Jeddah

22 June 2008

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• More Oil & Gas Needed in Coming Decades

• Growing Interdependence of Consumers & Producers

• Achieve Results in Improving Investment, Transparency & Sustainability towards Mexico 2010

• IEF Catalyst for Action-oriented Global Energy Dialogue

Key Messages

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International Energy Forum

WWW.IEFS.ORG.SA

WWW.JODIDATA.ORG