RUSSIAN OIL AND GAS RESERVES
Ray Leonard YUKOS June10, 2002 Factors to consider
• Existing Reserves • Production Capability • Export Capability • Future Discoveries New outlook for oil reserves in Russia and Middle East: reality or political numbers game?
Russia & Russian companies’ 1988 Middle East (OPEC) oil oil reserves reserves leap 100 93 (bn bbl) (bn bbl) 90 81.8 700 80 634
70 600 60 46.5 50 40.2 500 40 400 360 30
20 300 10 0 200
100 00 )
% of C2 0 0 rves of Top World Energy Proved (internat. Provede (A+B+C1)Proved (A+B+C1)rves of Top 10** rves of Top 4* e Council (1998)auditede 99- res * and 5 res 10* res 1987 1988 * LUK, YUKOS, SurgutNG,TNK ** 4 with Onako + Sidanco, Rosneft, Tatneft Sibneft Slavneft Bashneft Oil Equivalent Reserves
800 700 600 500
400 Oil 300 Ga s 200 BO 100 0 Middle Russia and Other Non OPEC East Cas pian OPEC ex porters RUSSIANRUSSIAN ANDAND CASPIANCASPIAN PRODUCTIONPRODUCTION COMPAREDCOMPARED TOTO WORLDWORLD PRODUCTIONPRODUCTION
16,0 25,0 Caspian Russian 14,0 % WORLD Production
20,0 19,3 12,0 3,5 0,8 15,2 10,0 16,5 15,0 0,9
8,0 9,4 1,1 mmbo/d 10,8 10,0 6,0 0,7
10,8 10,5 % Production World 8,8 4,0 6,9 5,0 5,8 2,0
0,0 0,0 1986 1991 1996 2001 2010 TCF GAS
35
30 2,82 2,12 1,41 25 4,87 1,06 5,82 0,07 3,88 20 1,94
15
3,74 22,59 10 19,06 20,47 20,47
5 1,69 9 2,93 0 1970 1980 1990 2000 2010 2020
RUSSIA CURRENT PRODUCTION AREAS CENTRAL ASIA EAST SIBERIA RUSSIAN OFFSHORE YUKOS PRODUCTION
220,000 50 58 70 200,000
180,000
160,000
140,000
120,000 2000 2001 2002 YUKOS PRODUCTION
110
100
90
million80 tons
70
60
50 Yearly Production, 40 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Average daily rate per new well by Russian oil companies in 2001
75,4 80,0
70,0 58,0
60,0
50,0
t / d t / 40,0 27,7 24,2 22,4 30,0 22,3 21,3 19,7 18,5
12,8 20,0 8,3 4,0 10,0
0,0
YUKOS ONAKO Lukoil Slavneft Surgutneftegas Tatneft Sibneft SIDANCO TNK Rosneft Bashneft Total 30%
25% Decline Rate for Old Wells
20% Russia West Siberia Surgutneftegaz 15% Yuganskneftegaz
10%
5%
0%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 -5%
-10%
-15% Flow Rate for New Wells Russia West Siberia Surgutneftegaz Yuganskneftegaz
60
50
40
30 t/well per day per t/well 20
10
0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
(United Financial Group, S. O’Sullivan)
4.5 Lifting costs 4.0 3.5 3.0 2.5 $/bbl 2.0 1.5 1.0 0.5 - Yukos Sibneft LUKoil Tatneft
1998 1999 2000 2001F FSU oil is competitive on the world market
Worldwide full-cycle upstream cost* of oil in 2001
$/bbl Angola 16 Including Government expenses USA, Mexican Gulf (deep) 12
USA onshore Venezuela(conv)
8 Russia stripperUSA, wells North Sea
4 Indonesia China (onshore) China Other Mexico Western Canada Western Brasil Kazakhstan Iraq Saudi Arabia Siberia Western Algeria Nigeria
Iran Best Kuwait UAE USA, Alaska Companies** Venezuela(x-heavy) Other Latin Latin America Other 100 200 300 400 500 600 700 800 Reserves, * - finding, development and production ** - 2001 finding, development and production cost –3.7 $/bbl, excl. transportation and taxes (CERA,Sept. 2001) bln.bbl OIL EXPORT ROUTES POTENTIALPOTENTIAL EXPORTEXPORT OFOF RUSSIANRUSSIAN OILOIL TOTO U.S.AU.S.A GAS EXPORT ROUTES Future Potential Reserves
250
200
150 Oil 100 Gas Total BOE 50
0 Russia and Middle Deep Caspian East Water EXPLORATIONEXPLORATION MATURITYMATURITY Potential of Russian Shelf
• Seven major basins, each equal to or larger than the Gulf of Mexico or the North Sea • Extensions of producing trends in Pechora Sea, Kara Sea and Sea of Okhotsk • Thick sedimentary basins with all elements for hydrocarbon accumulations in other Arctic and Pacific Basins SUPPLY AND DEMAND 2000-2010
W.EUROPE CONSUMPTION
15 MMBOD 16 MMBOD 16 2,0 3,0 RUSSIA +CA SPIA N 12 US CONSUMPTION 3,0 4,0 A FRICA MIDDLE EA ST 8 3,0 25 4,0 EUROPE
22 MMBOD mmbod 20 MMBOD 4 7,0 1,0 5,0 20 1,0 2,0 OTHER 0 2,5 3,0 RUSSIA+CASPIAN 2000 2010 15 2,5 4,0 MIDDLE EA ST RU
6,0 A FRICA mmbod 10 5,0 WEST HEMISPHERE EAST ASIA CONSUMPTION USA 5 8,0 7,0 30 24 MMBOD 0 25 2,0 2000 2010 18 MMBOD 1,0 OTHER 20 1,0 RUSSIA+CASPIAN 15 A FRICA 16,0
mmbod 11,0 MIDDLE EA ST 10 EA ST A SIA 5 6,0 5,0 0 2000 2010 CONCLUSIONS
• Russian oil reserves are probably in the range of 90-105 Billion barrels • These reserves will be capable of sustaining an additional 35% increase over current levels (7.5 MMBOD) for an extended period • New export oil and gas pipelines will allow additional Caspian oil to be marketed and supply Russian oil and gas to the Far East • A combination of mature, developing and frontier exploration can add an estimated 40-50 billion barrels and larger amounts of natural gas • Russian and Caspian oil exports will reach the level of one half of the Middle East by 2010 • Russian gas reserves allow a significant increase from current production and will assume increasing importance as world production eventually peaks and begins to decline