4Crude Oil Supply (2006) World Proven Crude Oil Reserves Billions of BarrelsWorld Crude Oil ProductionMillions of Barrels Per DayW. Europe15FSU/E. EuropeFSU/E. EuropeW. EuropeLatin AmericaLatin America796.311612.610.6US/Canada201Proven reserves grew in CanadaComprised of primarily tar sandsCrude is extracted from sands and topped in the field for diluant in pipeline (syncrude)11.3US/Canada36Asia/Pacific26.07431028.4Africa9.8Asia/PacificMiddle EastAsia/PacificAfricaAfricaMiddle EastMiddle EastTotal: 85MMB/DTotal: 1,292 BB
5Crude Oil Demand Demand has risen by 7 MMBD (9%) since 2002. Demand at 85 MMBD or 98% of world daily delivery capacity.Vulnerable to supply disruptions caused by storms, accidents, breakdowns, political unrest.65% of proven reserves within national oil companies and 16% held by Russia.Traditional companies have full access to 7% of reserves and 12% through partners (if allowed).
11Topping Refinery “Tea Pot” Not A Refinery Really Just A Crude GASES650-NAPHTHA ANDGASOIL FEEDSTOCKS“Tea Pot”Not A RefineryReally Just A CrudeDistillerCRUDE OILDU6OIL or ASPHALT(if heavy crude)650+
12“Hydroskimming” Refinery, many exist all over the world Simple RefineryGASESTO MOGAS650-NHTCRUKHTJET/KERODHTTO NO.2CRUDE OILDU“Hydroskimming” Refinery,many exist all over the world6OIL or ASPHALT(if heavy crude)650+
32Current RealitiesCrude production at maximum rates based on existing infrastructureU.S. refining running at maximum capacity (less turnaround activity)No new refineries in the near termExisting refinery expansions must fill gapIncrease crude capacity and conversion capabilities to meet light product demandAsphalt must keep pace with conversion feed values to encourage production
34Future For Asphalt More heavy crude being run (availability and price) Clean fuels capital behind refiners, up-graders next?Asphalt is more expensive in a $70.00 crude worldAsphalt has to trend faster with crude oil pricesAsphalt has to be more competitive with light productsTransportation costs rising – Rail, Barge, TerminallingState asphalt price indexes reduce supplier/contractor risk