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Oil and Money
14th November 2012
Howard V RogersDirector of Natural Gas ResearchOxford Institute for Energy Studies
OX
FO
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IN
ST
ITU
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Na
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0
5
10
15
20
25Ja
n-07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
$/m
mbt
u
Gas Prices 2007 – September 2012
Henry Hub
NBP
Europe Oil Indexed Contract est.
Asian LNG Spot
Average Japan LNG Price
Brent
Nat
ural
Gas
Res
earc
h P
rogr
amm
e European Price Spreads
3
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
€/M
Wh
German Contract NBP
Indicative Uncertainty Range Given Contract Concessions
Nat
ural
Gas
Res
earc
h P
rogr
amm
e Japanese Power Company Financial FY 2011
4
http://www.oxfordenergy.org/2012/06/a-realistic-perspective-on-japan%E2%80%99s-lng-demand-after-fukushima/
Nat
ural
Gas
Res
earc
h P
rogr
amm
e Lord Browne’s (CEO BP) view of
gas price negotiations in 1994“I cannot wait to move our gas sales contracts onto a gas market index. At the moment what happens when we want to develop a new gas field is this: our people sit down with the buyers and have a leisurely series of lunches that goes on for 2 years, at the end of tha t period they come up with a price that any two moderately intelligent people could agree on in 10 minutes. Th en they index it to something completely irrelevant. I can guarantee that by the time the gas is flowing, the price we get for it bears no relation to its value”
5
