International Association of Oil and Gas Producers Oil and Gas Security of Supply for Europe Athens, 3 rd November, 2005

2 Agenda  Global Energy Demand  Oil and Gas Resources  EU Gas Issues  Investment, Demand Growth and Spare Capacity  Indigenous Production  Technology  Summary

3 Global energy demand - growth continues Source: ExxonMobil, 2004  Energy demand fuelled by economic and population growth  Fossil fuels will retain their market share  Renewables enjoy significant growth but remain marginal  Energy efficiency gains included in forecast  Energy price trends and developing countries’ demand remain uncertain

4... and large oil and gas resources exist Trillion Barrels Oil Equivalent World Hydrocarbon Resources Technically RecoverableAlready Produced Source: IEA

5...with substantial potential  Claude Mandil (IEA): -“Quenching the world’s oil thirst …. is a major investment in modern technology.” Source: IEA Availability of oil resources as a function of economic price

6 Resources not a constraint  Oil resources -Ample conventional resources exist -Unconventional volumes untapped  Gas resources -Significant upside to support growing demand -Market incentives exist to develop remote resources

7...with abundant gas reserves  Proven gas reserves -1984: 96 Tcm -1994:143 Tcm -2004:180 Tcm  Reserves-to-production ratio: 66.7 years  Highly concentrated  70–80% within economic reach of Europe Technically recoverable conventional gas: ~ 450 Tcm

8 Source : WoodMackenzie, Cedigaz, Total albeit from more distant sources Europe* (EU34) * EU25 + Bulg / Cro / Rom / Turk + Norw/Bos/Mac/Serb/Switz Dom. Prod. LNG Imports Pipeline Imports Demand in Bcm  LNG -Imports to triple  Pipeline gas -Imports to grow by > 50%  Total imports by 2015: -~450 Bcm/y  Increased competition for supplies

9... and Europe is well positioned Nigeria LNG Algeria Norway Libya Egypt 48 Tcm 30 Tcm Qatar Iran Iraq Russia Caspian 9 Tcm … but it needs  Supply diversification  Integration of gas networks  Dialogue with producing countries  Contractual flexibility -Long term contracts  Regulatory stability  Improving market efficiency -Interoperability

10 The development challenge Resources + access + investment + technology + market + lead times …. Production

11 Industry investment is increasing  Upstream investments -Up nearly 60% since In 2003 at $160 billion  Predictions for $180 billion  Annual requirement to $200 billion Global Upstream Investment Source : J.S Herold / Harrison Lovegrove

12 OPEC spare production capacity - historic lows Source: DOE / EIA / BP  Recent oil price rise seems to reflect: -Reduced spare capacity -Risk premium Million Barrels per Day

13 European basin – a leading global producer Source: BP Stat review Year 2004 Production Mboe per day

14... with a major contribution to EU economy  Indigenous potential up to 100 billion boe  Supports European manufacturing and service Industry  Sustains employment  Contributes tax revenues  Facilitates access to global resources

15... supported by new technologies  More oil becomes accessible -Deep water -Reservoirs with higher pressures -Difficult geography  Recovery factor up - Current average around 35% - 1% increase = 1 year global energy consumption

16 … a need for stability

17...in summary A shared challenge

18 Summary Thank you for your attention!

19... to meet oil demand growth Forecast History Source: EIA, Short-Term Energy Outlook, September 2005

20 German Gas – Growing Reserves through Technology

21 German Gas – Growing Reserves through Technology

22 German Gas – Growing Reserves through Technology

23 German Gas – Growing Reserves through Technology 3D seismic, sub salt imaging, horizontal drilling, sour gas processing ….

24 German Gas – Growing Reserves through Technology 3D seismic, sub salt imaging, horizontal drilling, sour gas processing ….