Energy Outlook 2030

BP Energy Outlook 2016 edition

Outlook Spencer Dale, group chief economist to 2035

bp.com/energyoutlook #BPstats Disclaimer

This presentation contains forward-looking statements, particularly those regarding global economic growth, population growth, energy consumption, policy support for renewable energies and sources of energy supply. Forward-looking statements involve risks and uncertainties because they relate to events, and depend on circumstances, that will or may occur in the future. Actual outcomes may differ depending on a variety of factors, including product supply, demand and pricing; political stability; general economic conditions; legal and regulatory developments; availability of new technologies; natural disasters and adverse weather conditions; wars and acts of terrorism or sabotage; and other factors discussed elsewhere in this presentation. BP disclaims any obligation to update this presentation. Neither BP p.l.c. nor any of its subsidiaries (nor their respective officers, employees and agents) accept liability for any inaccuracies or omissions or for any direct, indirect, special, consequential or other losses or damages of whatsoever kind in connection to this presentation or any information contained in it. Unless noted otherwise, data definitions are based on the BP Statistical Review of World Energy, OECD and historical energy data up to 2014 are consistent with the 2015 edition of the Review. Gross Domestic Product (GDP) is expressed in terms of real Purchasing Power Parity (PPP) at 2010 prices.

2016 Energy Outlook 2 © BP p.l.c. 2016 Economic backdrop

GDP Contribution to GDP growth 2014-35 Trillion, $2010 Trillion, $2010 250 0 10 20 30 Other 200 India Other Africa India 150 China OECD Africa 100 China 50 OECD OECD 0 1965 2000 2035 Population Productivity

2016 Energy Outlook 3 © BP p.l.c. 2016 Global energy demand

Consumption by region Consumption growth by region Billion toe 10 year average, % per annum 18 12% Other Other Asia 15 Other Asia 10% China 8% World 12 China Other OECD OECD 6% 9 4% 6 2% Industry 3 0% 0 Transport -2% 1965 2000 2035 1975 1995 2015 2035

2016 Energy Outlook 4 © BP p.l.c. 2016 What drives energy demand?

2016 Energy Outlook 5 © BP p.l.c. 2016 Global GDP and energy

World GDP and energy demand Energy intensity by region Index (1965=100) Toe per thousand $2010 GDP 1200 0.7 GDP 1000 0.6 China Primary energy US 0.5 800 World 0.4 EU 600 India 0.3 Africa 400 0.2 200 0.1 0 0.0 1965 2000 2035 1965 2000 2035

2016 Energy Outlook 6 © BP p.l.c. 2016 Slower global GDP growth

Annual growth rates 2014-35 Historical growth rates % per annum % per annum, 20-year moving average 5% 5% GDP Primary energy 4% Base case 4% GDP

3% 3%

2% 2% Primary energy 1% 1%

0% 0% China World China World 1985 1995 2005 2015

2016 Energy Outlook 7 © BP p.l.c. 2016 Energy intensity and energy demand

Decline in world energy intensity World energy demand % per annum Billion toe

0% -1% -2% -3% -4% 25 1965-2014 1994-2014 1965-2014 20 Base case Fastest Flat demand 1994-2014 20-year 15 average Thousands Base case 10 2014-35 5 Flat demand 0 1965 2000 2035

2016 Energy Outlook 8 © BP p.l.c. 2016 Q: What drives energy demand?

A: Global economic growth

2016 Energy Outlook 9 © BP p.l.c. 2016 Fuel mix

Shares of primary energy Annual demand growth by fuel Mtoe per annum 50% 250 Oil 40% 200 Renew.* Hydro 30% Coal 150 Nuclear 20% Gas 100 Coal

10% Hydro 50 Gas Nuclear Oil 0% Renewables* 0 1965 2000 2035 1994-2014 2014-35 *Includes biofuels 2016 Energy Outlook 10 © BP p.l.c. 2016 Key factors shaping the fuel mix

What have we learned about US shale?

China’s changing energy needs

Prospects for renewables and other non-fossil fuels

2016 Energy Outlook 11 © BP p.l.c. 2016 US tight oil and shale gas

US tight oil forecasts US shale gas forecasts Mb/d Bcf/d 8 90

6 60

30 Forecast year: 2 2013 2014 2015 2016 0 0 2005 2015 2025 2035 2005 2015 2025 2035

2016 Energy Outlook 12 © BP p.l.c. 2016 Global tight oil and shale gas Ten year supply increments: Tight oil Shale gas Mb/d Bcf/d 5 40 S & C America 4 30 Middle East 3 Europe & Eurasia 20 2 Africa 10 Asia Pacific 1 North America 0 0 2005-15 2015-25 2025-35 2005-15 2015-25 2025-35

2016 Energy Outlook 13 © BP p.l.c. 2016 Market shares of tight oil and shale gas

Shares of total oil/gas production

40% Shale gas

30% Tight oil

20%

10%

0% 2015 2020 2025 2030 2035

2016 Energy Outlook 14 © BP p.l.c. 2016 Market shares of tight oil and shale gas

Shares of total oil/gas production

40% Shale gas

30% Tight oil Stronger shale case

20% Stronger shale case 10%

0% 2015 2020 2025 2030 2035

2016 Energy Outlook 15 © BP p.l.c. 2016 Key factors shaping the fuel mix

What have we learned about US shale?

China’s changing energy needs

Prospects for renewables and other non-fossil fuels

2016 Energy Outlook 16 © BP p.l.c. 2016 China’s changing energy needs

GDP and primary energy growth Shares of primary energy % per annum 10% 80% GDP Coal 8% Primary energy

6% 40% 4% Oil Non-fossils 2% Gas 0% 0% 2000-14 2014-25 2025-35 1985 2010 2035

2016 Energy Outlook 17 © BP p.l.c. 2016 Key factors shaping the fuel mix

What have we learned about US shale?

China’s changing energy needs

Prospects for renewables and other non-fossil fuels

2016 Energy Outlook 18 © BP p.l.c. 2016 Renewables and other non-fossil fuels

Renewables in power forecasts Mtoe 1500

1000

500 Forecast year: 2016 2015 2014 2013 2012 2011 0 2010 2015 2020 2025 2030 2035

2016 Energy Outlook 19 © BP p.l.c. 2016 Renewables and other non-fossil fuels

Renewables in power forecasts Revisions to non-fossil fuels Mtoe Mtoe vs 2011 Outlook

1500 400 Renewables Hydro Biofuels Nuclear 200 Total 1000

500 Forecast year: 2016 2015 -200 2014 2013 2012 2011 0 -400 2010 2015 2020 2025 2030 2035 2015 2020 2025 2030

2016 Energy Outlook 20 © BP p.l.c. 2016 Oil demand and supply

Demand Supply Mb/d 115 2035 level 110 Other 105 Mid East Other 100 Other Asia Brazil US 95 India 90 China 85 80 2014 OECD Non-OECD 2014 Non-OPEC OPEC decline growth growth growth

Liquids fuel demand by sector Vehicle fleet Mb/d Billion vehicles 70 3 Transport Non-OECD 60 Industry OECD Other 50 Power 2 40 30 1 20 10 0 0 1965 2000 2035 1965 2000 2035

Gas production by type and region Shares of global gas consumption Bcf/d 500 Non-OECD shale 40% OECD shale Total trade 375 Non-OECD other 30% OECD other

250 20% Pipeline

125 10% LNG

0 0% 1990 2005 2020 2035 1990 2005 2020 2035

% per annum Decline in energy 4% intensity

GDP 3% Decline in carbon 2% intensity

CO2 0% 1994-2014 2014-35

Carbon emissions

Billion tonnes CO2 40 Base case Faster transition IEA 450 30

0 1975 1995 2015 2035

Carbon emissions Changes in intensity Billion tonnes CO % per annum 2 Energy intensity 40 Base case 0% -1% -2% -3% Faster transition 0% IEA 450 1994-2014 30 Base -1% case 20 Carbon intensity 10 -2%

IEA 450 0 1975 1995 2015 2035 -3%

Carbon emissions Changes in intensity Billion tonnes CO % per annum 2 Energy intensity 40 Base case 0% -1% -2% -3% Faster transition 0% IEA 450 1994-2014 30 Base -1% case 20 Carbon intensity Faster transition 10 -2%

IEA 450 0 1975 1995 2015 2035 -3%

Consumption by fuel Annual demand growth by fuel Billion toe Mtoe per annum 5 250 200 Renew.* 4 150 Hydro Oil Nuclear 100 3 Coal 50 Gas Coal Gas 0 2 Oil -50 Total 1 -100 Hydro & 1994- Base Faster Nuclear Renewables* CO2 0 2014 case transition 1965 2000 2035 2014-35 *Includes biofuels 2016 Energy Outlook 29 © BP p.l.c. 2016 Conclusions

Global demand for energy continues to rise − to power increased levels of activity as the world economy continues to grow Fuel mix changes significantly − coal losing, renewables gaining, and oil and gas combined holding steady Growth rate of carbon emissions slows sharply − but further policy changes are needed

Outlook to 2035

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