energy security and trends in latin america october 18, 2007 confidential © 2007, all rights...
TRANSCRIPT
Energy Security and Trends in Latin America
October 18, 2007
CONFIDENTIAL© 2007, All rights reserved, Cambridge Energy Research Associates, Inc., 55 Cambridge Parkway, Cambridge, Massachusetts 02142No portion of this presentation may be reproduced, reused or otherwise distributed in any form without prior written consent.
2
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Terms of Use
● CERA content and information, including but not limited to graphs, charts, tables, figures, and data, are not to be disseminated outside of a client organization to any third party, including a client’s customers, financial institutions, consultants, or the public.
● Content distributed within the client organization must display CERA’s legal notices and attributions of authorship.
The accompanying materials were prepared by Cambridge Energy Research Associates, Inc. (CERA), and are not to be redistributed or reused in any manner without prior written consent, with the exception of client internal distribution as described below.
CERA strives to be supportive of client internal distribution of CERA content but requires that
Some information supplied by CERA may be obtained from sources that CERA believes to be reliable but are in no way warranted by CERA as to accuracy or completeness. Absent a specific agreement to the contrary, CERA has no obligation to update any content or information provided to a client.
3
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security and Trends in Latin America
● What is energy security and how it has traditionally been approached?
● What are the new trends affecting energy security?
● How does energy security present itself in Latin America and how relevant is it?
● What are the key trends and impacts of energy security in Latin America, and in the Southern Cone in particular?
4
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security – Global Context Regions’ share of global oil demand and productive capacity
Source: Cambridge Energy Research Associates.
Percentage
Share of Demand - 2006
Share of Supply - 2006
0
10
20
30
40
NorthAmerica
AsiaPac Europe LatinAmerica
MiddleEast
Eurasia Africa
5
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security – Global Context High Concentration of Productive Capacity
Source: Cambridge Energy Research Associates.
12%
13%
8%
4%6%
14%
9%
Asia Pacific
Africa
Northwest Europe
United States
Canada
Latin America
Eurasia
33%
Middle East
Marine transportation routes possible chokepoints
6
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security – Global Context WTI price and linkage to OPEC spare capacity
Source: Cambridge Energy Research Associates.*Estimated.
WTI price US$/Barrel
Oil Embargo
Producers fighting for
market shares
Low spare capacity as OPEC compensates for loss production
from Iraq, Venezuela, Nigeria
and US golf CERA Base Case
CERA High Price Case
0
10
20
30
40
50
60
70
80
90
100
1970 1975 1980 1985 1990 1995 2000 2005 2010*
7
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Traditional Measures to Manage Energy Security
● Energy Security System (1973)
— IEA, monitoring, storage, energy conservation, collaboration in case of disruption
● Diversification of Supply
— Source of supply and type of supply (nuclear, ethanol, renewable energy…)
● Security Margins
— Spare capacity, storage, strategic reserves, stockpile of equipment…
● Energy Integration
● Energy Conservation
8
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security Changing Trends : Mounting PressuresConcentration of Productive Capacity to 2012—“O-15”
Source: Cambridge Energy Research Associates.
Non OPEC
OPEC
“O-15” Share of Global Capacity
30%
40%
50%
60%
70%
1995 2002 2007 2012
Non OPEC
OPEC
9
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security Changing Trends : Growing Preoccupation with Natural Gas
EU30- Gross Inland Consumption
Source: Cambridge Energy Research Associates.*Estimated.
Percentage
In 2006, 44% of Europe’s gas demand was imported (28% via pipelines, 16% via LNG), an increase from 33% in 2000
By 2008, the share of import is expected to rise to 48%
In 2006, 44% of Europe’s gas demand was imported (28% via pipelines, 16% via LNG), an increase from 33% in 2000
By 2008, the share of import is expected to rise to 48%
0
10
20
30
40
50
60
70
80
90
100
2000 2015
Renewables
Nuclear
Gas
Oil
Solids
10
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security Changing Trends : Growing Role of Asia Oil and Natural Gas Demand Growth 2006-2020
Source: Cambridge Energy Research Associates.*Estimated.
Demand Growth
2006-2020
(Percentage)
Oil Natural Gas
0
10
20
30
40
50
60
70
80
World Asia World Asia
11
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security in Latin AmericaAbundance of Reserves
Share of natural gas proven reserves in Latin America
Share of oil proven reserves in Latin America
68%
59%
9%
13%
10%
9%
8%
Argentina
BrazilBolivia
VENEZUELA
Mexico
Trinidad & Tobago
12
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
0
2000
4000
6000
8000
10000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Energy Security in Latin America: Difficulties to Transform Underground Wealth in RealityOil production in Latin America
Source: Cambridge Energy Research Associates.*Estimated.
Thousands Barrels per
Day
Mexico
Venezuela
Other Latin American Producers
Brazil
13
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
0
10
20
30
40
50
60
70
80
2006 2007* 2008* 2009* 2010* 2011* 2012*
Energy Security in Latin America: Difficulties to Transform Underground Wealth in Reality Bolivia’s Commitments and projected deliverability
MMcm per day
Bolivia Deliverability (CERA Base Case)
Brazil GSA
Other export to Arg./Bra.
Domestic Demand
Source: Cambridge Energy Research Associates.*Estimated.
Argentina GSA
Mutun project
Bolivia’s Commitments
14
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security in Latin America: Difficulties to Transform Underground Wealth in Reality Argentina’s Gas production reaching its limit?
Source: Cambridge Energy Research Associates.
GasProduction
MMcmper day
0
25
50
75
100
125
150
1994 1996 1998 2000 2002 2004 2006
15
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul 2004 2005 2006 2007
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Energy Security in Latin America: Failures of Regional IntegrationArgentine gas exports cuts to Chile as a percentage of normal requirements
Source: CNE.
16
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security in Latin America: Difficulties to Transform Underground Wealth in RealitySouthern Cone intra-regional natural gas imports
Source: Cambridge Energy Research Associates.*Estimated.
Million Cubic feet per Day
0
500
1000
1500
2000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
17
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Importing LNG Terminals
Announced
Existing
Under Construction/Contracted
Exporting LNG Terminals
Pecem, Brazil7 MMcm per day (2009)
Baia de Guanabara, Brazil14 MMcm per day (2008)
South of BrazilQuintero, Chile6–10 MMcm per day (2009)
Mejillones, Chile
Peru LNG (2010)4.2 million tons per year
Uruguay
Argentina
Energy Security in Latin America: LNG to Replace Regional Flows?Main LNG project in South America
Source: Cambridge Energy Research Associates.
18
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security in Latin America: Growing Pressures in the Coming YearsGas supply growth in the Southern Cone
Source: Cambridge Energy Research Associates.*Estimated.
Gas Supply Growth
(2000=100)
Brazil
Argentina
Chile
0
50
100
150
200
250
300
350
400
450
500
2000 2002 2004 2006 2008 2010 2012
19
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security in Southern Cone: Uneven Use of Traditional Measures to Manage Energy Security
●Diversification of Suppliers
●Energy Diversification
●Security Margins
●Energy Integration
●Energy Conservation
●Integrated Information
Argentina Brazil Chile
20
© 2007, Cambridge Energy Research Associates, Inc. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.
Energy Security and Trends in Latin AmericaKey TakeAways
● Regional disparities are likely to maintain energy security concerns high in the coming years
● Energy security concerns could also become a source of opportunity for resource rich countries
— As large consuming nations try to secure access to resources and generate a new inflow of capital for the E&P sector
● Energy security through diversification and growing interdependence with global markets will come at a price
— Price volatility, higher prices than today, higher sensitivity to global surges of energy security concerns
● Diversification to non-hydrocarbon based energy will increase considerably
● Efficient energy security mechanism will have to encompass more than just energy and suppliers’ diversification
— Integrated information system, energy conservation, reserve margins and storage…
If you have any questions about this presentation orCERA in general, please feel free to contact
Sophie Aldebert+55 21 2220 5151
55 Cambridge ParkwayCambridge, Massachusetts 02142, USA
www.cera.com
BeijingSan Francisco
Washington, DC
Cambridge, MA
Calgary
Mexico City
Rio de Janeiro
Paris
Oslo
Moscow
Johannesburg
Mumbai
Singapore
Bangkok
Tokyo
Dubai