1. The role of oil and gas companies in global climate policies
Energy Outlook, Arendal, 16 August 2016 Eirik Wærness, Senior Vice President and Chief Economist

2. The triple energy challenge – a balancing act
Population growth
Economic growth
Increasing energy demand
Fighting decline from existing fields
Satisfy demand
Clean and affordable energy for all
Limiting greenhouse gas emissions
Policy gap between targets and measures
Price uncertainty
Cost challenges
Risks
Policy uncertainty
Risk/reward balance
Sustainability

3. Three possible scenarios to 2040: Rivalry, Reform, Renewal*
Large uncertainties call for scenarios – Energy Perspectives 2016:
Energy intensity Index, 1990=100
World GDP and energy demand Index, 1990=100
Global energy mix %
2013
2040
Source: IEA (history), Statoil (projections)
*Rivalry: Geopolitical uncertainty, regional conflicts; Reform: COP21 followed up and tightened; Renewal: Energy revolution delivering emissions consistent with 2°-C target

4. A strong trend affecting economics and energy
All growth in energy demand in emerging economies, in particular in Asia
The global population centre is in Asia
World energy demand per region Bn toe
Each small square represents 1 million people
Source: BigThink, IEA, Statoil (projections)
© Statoil ASA

5. Speeding up the change in global energy mix
… with Renewal displaying a paradigm shift
Bn toe
Source: IEA (history), Statoil (projections)
© Statoil ASA

6. Huge investments needed in oil, gas and renewable electricity
…to replace declining production and ensure sustainability
New oil production Mbd
New gas production Bcm
Incremental New RES production Thousand TWh
Source: Statoil

7. What is required to deliver on demand and sustainability?
A huge change in parts of the energy sector…
Sales Light Duty Vehicles Millions
Light Duty Vehicle fleet composition Billions
Fuel mix in electricity generation %
2013
2040
Source: IEA (history), Statoil (projections)
© Statoil ASA

8. …because other sectors are more challenging to change
… and because demand here will grow as the economy grows…
Fuel mix in Final Energy Demand for Transport excluding LDVs Bn toe
Fuel mix in Final Energy Demand for Residential, Commercial & Industrial sectors Bn toe
2013
2040
Source: IEA (history), Statoil (projections)

9. So what is the role of oil and gas companies?
… given the triple energy challenge?
Deliver clean, affordable and available energy for all
Replace existing reserves and develop low-carbon sources of energy
Ensure attractive cost/risk balance
Improve energy and carbon efficiency
Statoil:
Developing low-carbon energy
CO2 emissions 50% of average
Reducing flaring from low levels
50 USD/ton carbon price
Oil and Gas Climate Initiative:
Supporting policies consistent with a 2°C future
Evaluating + reporting on climate risk
Satisfy demand
Risk/ reward balance
Sustain-ability