Crude oil natural gas How are they formed

Crude oil, natural gas: How are they formed? � � � � Decomposing buried organic material over millions of years through the action of micro-organisms Overlying layers of sand silt compress lower layers into sedimentary rock; Heat and pressure at depth slowly converts buried organic material into petroleum Petroleum formed deposits may consist mainly of larger (heavy) hydrocarbons, which have thick, nearly solid consistency of asphalt. As the petroleum matures, and as the breakdown of large molecules continues, successively “lighter” hydrocarbons are produced. In the final stages, most or all of the petroleum is broken down further into very simple, light, gaseous molecules— natural gas. Some natural gas deposits may form from deposits of plant material buried in sediment without association oil 1

World oil reserves - end of 2008 Region Billion barrels % of World Total North America 70. 9 5. 6% South & Cent. America 123. 2 9. 8% Europe & Eurasia 142 11. 3% Middle East 754. 1 59. 9% Africa 125. 6 10% Asia Pacific 42 3. 3 Asia Pacific North 3% America 6% Africa 10% South and Central America 10% Europe and Eurasia 11% Middle East 60% Data Source: BP Statistical Review 2009 2

Historical trend of oil reserves Mid East Total – 754. 1 bn bbls = 102 thousand million tonnes Data Source: BP

World oil production Oil production 30000 thousand barrels/day 25000 North America 20000 S. & Cent. America 15000 Europe & Eurasia Middle East 10000 Africa Asia Pacific 5000 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 0 Data Source: BP

Oil production in Europe and Eurasia 20000 Azerbaijan 18000 Denmark 16000 Italy Kazakhstan 12000 Norway 10000 Romania 8000 Russian Federation 6000 Turkmenistan 4000 United Kingdom 2000 Uzbekistan 0 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 '000 barrels 14000 Total Europe & Eurasia

World gas reserves - end of 2008 Region Trillion Cubic metres % of World Total North America 8. 87 4. 8 South & Cent. America 7. 31 4. 0 Europe & Eurasia 62. 89 34. 0 Middle East 75. 91 41. 0 Africa 14. 65 7. 9 Asia Pacific 15. 39 8. 3 2008 North America S. & Cent. America Asia Pacific 5% 4% 8% Africa 8% Europe & Eurasia 34% Middle East 41% Data Source: BP

Historical trend of gas reserves Data Source: BP

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Billion cubic metres World gas production Gas production 1200, 0 1000, 0 800, 0 North America S. & Cent. America 600, 0 Europe & Eurasia Middle East 400, 0 Africa Asia Pacific 200, 0

Natural gas production in Europe and Eurasia Natural gas 1200, 0 Azerbaijan Denmark 1000, 0 Germany Italy Kazakhstan cubic metres 800, 0 Netherlands Norway Poland 600, 0 Romania Russian Federation 400, 0 Turkmenistan Ukraine United Kingdom 200, 0 Uzbekistan Other Europe & Eurasia Total Europe & Eurasia 0, 0 1990199119921993199419951996199719981999200020012002200320042005200620072008 Data Source: BP

Oil trade movements Source: BP 10

Natural gas trade movements Source: BP 11

Oil and gas pipelines in Europe Source: EIA

Oil and gas pipelines to Europe

Demand in oil and gas � Oil demand in 2009 estimated at 85. 0 mb/d (-1. 4% or -1. 2 mb/d year-on-year) but expected to rise to 86. 6 mb/d in 2010 (+1. 8% or +1. 6 mb/d versus 2009) to 120 mb/d in 2030 � gas demand expected to rise by 41% from 3. 0 trillion cubic metres in 2007 to 4. 3 tcm in 2030 � world energy demand is projected to increase by over 40% between now and 2030. � Non-OECD countries account for over 90% of demand - China and India alone for over half.

Outlook for oil demand 15 Source: IEA Oil Market Report 2010

Oil supply growth non-OPEC Source: IEA Oil Market Report 2010 16