1. Shaping oil and gas for a competitive future
Ashley Sherman, Senior Research Analyst
September 2017

2. Building a competitive advantage on strong foundations
Over the last 40 years, Wood Mackenzie has evolved naturally along the energy value chain to capture all the key components affecting global markets.
Our integrated approach allows us to spot trends and forecast future dynamics before anyone else

3. Wood Mackenzie’s ‘carbon-constrained scenario’
Long-term demand growth for hydrocarbons is not assured
World primary energy demand (scenario),
World energy demand change (scenario),
Hydrocarbons dominate, but…
Oil demand flat
Gas growth at expense of coal
Renewables growth is global
*Other Solid Fuels (OSF) includes biofuels and waste.

4. Even in base case, 17 million b/d required to fill ‘supply gap’ to 2025
By 2025, liquids supply required from projects that break even at >US$70/barrel
Supply gap to 2025
New supply required to fill the gap
OPEC Capacity Growth
Supply gap

5. Future oil and gas project delivery – leaner and quicker
Caspian pre-FID* projects can fit the global trend
Wood Mackenzie global upstream project tracker: pre-FID benchmarking
Reserve size:
500 mmboe
Caspian region:
pre-FID
project
* Pre-FID = pre Final Investment Decision.
Discount date: January Discount rate: 15%. Valuations run using Wood Mackenzie’s base price assumption.

6. Can Kazakh oil and gas meet the challenge?
Affordable /
Competitive
Reliable
Sustainable
improvement
Cost savings at major projects
Commercialise other offshore discoveries
Maintain high efficiency
Incentivise and prioritise exploration
Stable investment has economic and social multipliers
Licence extensions

7. Key takeaways Affordable: Cost optimisation must ‘stick’
Reliable: Current investment phases will set benchmark
Sustainable: Carbon footprint of oil and gas operations

8. Ashley Sherman
Senior Research Analyst – Russia & Caspian Upstream Research
Biography
Ashley joined Wood Mackenzie in 2012 and works as the Senior Research Analyst in the Caspian Upstream Research Team, focused on Kazakhstan, Azerbaijan and Central Asia.
He was previously an Analyst in the Oil & Gas team at an emerging markets- focused investment bank. He provided valuation support for debt and equity financing for E&P companies in Central Asia and Africa.
In 2012, he completed an MSc in International Public Policy at University College London, with his dissertation focused on unconventional gas development in China.
In 2010, Ashley graduated from Oxford University with a degree in Russian and French.
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9. Disclaimer Strictly Private & Confidential
This report has been prepared for the XI KAZENERGY Eurasian Forum by Wood Mackenzie Limited. The report is intended solely for the benefit of attendees and its contents and conclusions are confidential and may not be disclosed to any other persons or companies without Wood Mackenzie’s prior written permission.
The information upon which this report is based has either been supplied to us by clients or comes from our own experience, knowledge and databases. The opinions expressed in this report are those of Wood Mackenzie. They have been arrived at following careful consideration and enquiry but we do not guarantee their fairness, completeness or accuracy. The opinions, as of this date, are subject to change. We do not accept any liability for your reliance upon them.