PARTEX - Oil & Gas

ORDEM dos ENGENHEIROS
Lisboa, 1 de Outubro de 2015
PETRLEO e GS: a Evoluo dos Preos, as

Mudanas Estratgicas nos Mercados e as
Consequncias Geopolticas
Antnio Costa Silva

Presidente da Comisso Executiva
Ordem dos Engenheiros
Sumrio
1. A GEOPOLTICA DA ENERGIA
2. EVOLUO dos PREOS do PETRLEO e GS no MUNDO
e CONSEQUNCIAS ECONMICAS e GEOPOLTICAS
3. O PAPEL do SHALE GAS
4. IMPLICAES para o FUTURO
01-10-2015

Antnio Costa Silva Presidente da Comisso Executiva
1. A GEOPOLTICA DA ENERGIA
01-10-2015

Para onde vai o Sculo XXI?
A GEOPOLTICA e a
ECONOMIA
OS RECURSOS
AS AMEAAS GLOBAIS
. Climtica (migraes)
. Recursos cada vez mais

escassos
. Efeitos da globalizao
. Terrorismo
. Declnio do Estado-Nao
. Pirataria
. Emergncia de Novos
Actores
. Estados falhados
- Minerais
. Colapso da ordem em
zonas do Globo
- Energticos
. Proliferao Nuclear
- gua
. Transferncia parcial do
poder financeiro
. Crise global do sistema

capitalista
01-10-2015
. Armas de destruio
macia
. Intensificao da luta
pelos recursos:
- Alimentares
. Controle de matriasprimas estratgicas

Population, GDP and Primary Energy Consumption
Source: BP Statistical Review of World Energy June 2009
01-10-2015

O RITMO EXPONENCIAL DE
CONSUMO E OS LIMITES DA
GEOLOGIA
A INDSTRIA MINEIRA
Consome hoje de 4 a 10% da energia
primria produzida no mundo
Extraco de metais exige 10 vezes mais
energia que a extraco fludos
A barreira mineralgica
Nos prximos 20 anos escala do Globo
preciso extrair mais minrios que durante
toda a Histria anterior da Humanidade
Declnio das descobertas e esgotamento
grandes jazigos
Aumento significativo da procura

mundial de minerais
PLANETA TERRA
O sentimento de abundncia
uma iluso?
13 000 km de dimetro
Mais de 100 elementos
qumicos
2 000 espcies de
minerais
Mais de 3 000 mil milhes
de barris de petrleo
AS TECNOLOGIAS
A TABELA PERIDICA DE
MENDELEIEV
O paradoxo de Jevons: mais evoluo

tecnolgica conduz a mais consumo
As descobertas maiores do futuro viro do
fundo do mar
A robtica e os sistemas inteligentes
As nanotecnologias podem reduzir as
necessidades
Novo paradigma industrial: Nano-mquinas
com rendimentos energticos elevados
1980: apenas 10 elementos explorados

para aplicaes industriais
2012: mais de 50
Computadores, Indstria
Aeroespacial, electrnica, Imagiologia,
etc.
UM MUNDO DE RECURSOS
FINITOS
Hoje 26 elementos da Tabela esto em

penria
Debate entre cornucopianos e

maltusianos
Os eternos optimistas e os
eternos pessimistas
01-10-2015

PRODUCTION of SELECTED COMMODITIES, 1950, 1975, and 2000

(in thousand metric tons, unless otherwise noted)
PRODUCTION
Bauxite
Cobalt
PERCENT
INCREASE
1950 - 2000
1950
1975
2000
8,370
25,401
135,000
1,513
30
Copper
2,645
6,960
Iron ore
250,000
887,389
Nickel
146
787
1,250
756
Titanium
814
3,298
5,187
537
33
371
13,200
399
1,061,148
324
Crude oil (billion barrels)
3,8
19,5
27,3
618
Natural gas (tillion cubic feet)
7,2
55,8
85,1
1,082
Source: US Grological Survey, Minerals Yearbook; BP, Statistical Review of Weorld Energy
01-10-2015

POPULATION
7 billion people
GDP
65 trillion US$
2030
2012
WORLD CHALLENGES
POPULATION
8,5 billion people
GDP
130 trillion US
CAR FLEET
CAR FLEET
800 million cars
3 billion cars
OIL USE in DEVELOPED WORLD
OIL USE
14 barrels/person/year
OIL USE in DEVELOPING WORLD
Billions of people with better incomes

go from 3 barrels/person/year up to 3
or 4 times more
3 barrels/person/year
WORLD ENERGY MATRIX

. Oil Production is 5 times greater than
in 1957
. Renewables have established a more
secure foundation
. Oil/Coal /Natural Gas provide 80% of
supply
01-10-2015
WORLD ENERGY MATRIX
. Dominance of Natural Gas?

. Consolidation of Renewables
. Solution for the transport system:
(electric/biofuels/GTL//fuel-cells)?
ELECTRICITY
ELECTRICITY
1,5 billion people without access
. Reduction or not of inequality?
WATER
WATER
700 million people with scarce resources
. Reduction or not water access?

8
GLOBALIZATION OF
OIL DEMAND
OIL-SUPPLY CAPACITY
IS GROWING
85% of growth from

developing countries
Combined effects of income
and population growth
Improved recovery efficiency

Role of unconventional oil
Impact of Gas Shale
Revolution
Technology improvements
Expansion of oil output
OIL PRICE VOLATILITY
KEY
FEATURES
of the OIL
and the
GAS
MARKETS
Departure of oil prices from

economic fundamentals
Oil price 25% above marginal
cost of production
UNPARALLEL
INVESTMENT CYCLE
GEOPOLITICAL EFFECTS
Market instability
Perception of supply disruptions
The fear factor
Long-term oil price above 70
US$/bbl
01-10-2015
DE-CONVENTIONALIZATION
OF OIL SUPPLY
US Gas Shale Revolution
Impact on Oil Shale and Tight
Oil
Build-up of US, Venezuela and
Canadian production capacity
Brazil and Atlantic Basin PreSalt-discoveries
FINANCIALIZATION
OF OIL
Commodity but also financial
asset
New era of oil pricing dynamics

From 2003 investment growing

1.5 trillion US$ every 3 years
Investment in 2012 may reach
a new record (600 billion US$)
Strong build-up of production
capacity
OIL ON THE EDGE

Break Throughs and High Prices have opened
up new frontiers for Petroleum
01-10-2015

10
CONSTRAINTS ON OIL AND GAS FLOW FROM MIDDLE EAST
01-10-2015

Source: 21st World Upstream Conference Organizer Global Pacific & Partners
11
THE GEOPOLITCS OF OIL
01-10-2015
Source: FT, 30th March 2011
12
THE GEOPOLITICS OF THE PIPELINES
11
1
10
a
b
5
6
9
13
12
01-10-2015

13
JIHAD IN AFRICA
THE DANGER IN THE DESERT
Source: The Economist, January 26th - February 1st
01-10-2015

14
AS FRONTEIRAS MARTIMAS no MEDITERRNEO ORIENTAL
Fonte: Noble Energy
01-10-2015

15
OIL ROUTING AKTAU-MAKHACHKALA-NOVOROSSIYSK
01-10-2015

16
Central Asia Centre System

45-55 Bcm/yr
Nominal Capacity 100
Bcm/yr
01-10-2015
GAS EXPORT

17
ENERGY GAME CHANGERS in XXI CENTURY

UNCONVENTIONAL GAS
INSTABILITY in PRODUCING
COUNTRIES and THREATS
to SUPPLY
01-10-2015
INDUSTRY CATASTROPHIC ACCIDENTS

(e.g. OFFSHORE OIL Spills) and PUBLIC
IMAGE
EMERGENCE of PACIFIC BASIN as

TOP ENERGY CONSUMER

FUKUSHIMA NUCLEAR
ACCIDENT
CLIMATE CHANGE and

ENVIRONMENTAL REVOLUTION
18
2. EVOLUO dos PREOS do PETRLEO e GS no MUNDO

e CONSEQUNCIAS ECONMICAS e GEOPOLTICAS
01-10-2015

19
01-10-2015

20
01-10-2015
21
LEVEL of
INVENTORIES
US stockpiles
Europe stockpiles
Asia stockpiles
THE DOLLAR
EFFECT
Negative correlation
oil prices vs. Dollar
value
Effect of US Federal
Reserve Policy
BALANCE
SUPPLY/DEMAND
2015: 2 MB/D
oversupply
OPEC
IRAN
USA
TECHNOLOGICAL
BREAKTHROUGHS
Shale Gas and
Shale Oil
revolution
New reserves
New generating
capacity
New paradigm
OIL PRICES
EXPLICATIVE FACTORS
GEOPOLITICAL
EFFECTS
OPEC policies
Consumers policies
Instability in key ol
producers
Terrorism attacks
SPECULATION in OIL
and COMMODITIES
MARKETS
Sudden sales of net

positions
Market perception
OIL MARKET
CYCLES
More strong when

supply/demand Balance
is tight
CONTANGO cycle:
future prices higher
than today prices
Backwardation cycle:
today prices higher
than futures
22
ENVIRONMENT
CAR FLEET
COAL
OIL
CHINA ENERGY INDICATORS
01-10-2015
Chinese Net
Oil Imports
Increased 84% in 7 years (2005-2012)
Increment on Oil
Consumption
Last 13 years CHINA recorded the largest increment

in the world 12 times
Chinese Oil imports
December 2012 reached 10.6 MB/D
Domestic Coal
Production
World Coal
Consumption
In 2012 for the first time in History China consumed

more coal than the rest of the world (50.2%)
Growth of China Car

Fleet
1 million cars in 1990

100 million cars in 2012
Share of world new

vehicles
China share was 2% in 2002

China share was 25% in 2012
Sales of New Cars
China overcome the US in sales of new cars in 2011

12 million vehicles in China vs. 11 million in US
Most Polluted
Cities in the world
Increased 135% last 10 years

Every 5 days a new coal plant opens in China
70% of Chinese Energy Matrix based on coal
Huge environment problems
Out of the 20 most polluted cities in the world China

has 16
Electric vehicle will be unavoidable
Huge geopolitical implications
23
Source: 21st World Upstream Conference Global Pacific & Partners
01-10-2015

24
Risk of changes
of Central Bank
policies:
. Increase of interest
rates
. Abandon debt
purchase
. Less financing
available
GDP Drop (0.3%

for each 8 US$/bbl
increase in Euro
zone)
Aggravation of
recession
sequels:
. Unemployment
. Loss of income
. Debt increase
HIGHER OIL
IMPORT BILL
Reduction of
available income
for families and
enterprises
Higher Production
Costs
HIGH OIL
PRICE
EFFECTS
in the
Economy
Higher
Commodity
prices
(more 95 billion
US$ for each 10 US$
/bbl increase In EU)
Aggravates fragile
recovery of world
economies
(average growth
3.3% in 2011 vs
3.9% in 2010)
01-10-2015
Accelerates
process of
transference of
wealth from
developed
countries to OPEC
producers (980 billlion US$ in 2008)
Hgher Inflation
25
25
PETRO-DOLLARS: whos rich whos not
01-10-2015

26
Rising Oil price threatens fragile recovery
01-10-2015

27
Fonte: Pblico, 23 Agosto 2014
01-10-2015

28
EFFECT OF SHALE
BOOM IN US
PRODUCTION DECLINE IN
SOME KEY COUNTRIES
Libya (less 80%)
Iran sanctions/violence (less 1.5
MB/D)
Nigeria violence/sabotage (less
0.3 MB/D)
Venezuela (underinvestment)
Political chaos: in total less 3.5
MB/D in production
OIL PRICE CRASH?

Next 5 years world may
experience oversupply
Non-OPEC oil output rise by 1.7
MB/D (2014)
Total Global demand grows by
1.4 MB/D
Weak demand due to economic
slowdown in Europe and China
Question: combination of
slowing demand and plentiful
supplies will overlap the
geopolitical tensions in Middle
East and North Africa?
01-10-2015
OIL PRICE
2011-2013
has been
STABLE
( most stable
period in
industry)

US oil production 2008: 6

MB/D
US oil production 2013: 9
MB/D
Canada added 1 MB/D
North America shale boom
has been a calming factor
Production lost in key
countries has been replaced
by US shale boom and
Canada increase in
production
IMPACT ON WORLD
ENERGY TRADE
US oil imports 2005: 60% of
total consumption
US oil imports 2014: 28%
Most oil US used to import
now goes to Asia
Helped markets to be wellsupplied and prices immune
to turmoil
29
The Economist, 18-24 October 2014
01-10-2015
30
30
GLOBAL ECONOMIC
RECOVERY
SUPPLY/ DEMAND
BALANCE
Crude demand slowed
remarkably Q2 2014
Weak economic growth in
Europe and China
Raise in global inventories
IEA: global crude demand
slowed to below 500,000 B/D
First significant drop in last 2.5
years
Oil is a leading indicator

Global economic recovery
weaker than forecasted
OIL PRICE
DROP IN 2014
__________
Price of Brent
fall below 100
USD/bbl first
time last
years
GEOPOLITICAL TENSIONS
AND SUPPLY
Geopolitical upheavals only in
Libya/Irak not affected significantly
production
Excess of oil in Atlantic Basin and
North Sea
European refineries cut back amid
weak margins
Structural changes in consumers
behaviour towards more efficient
technologies
MARKET STRUCTURE
Shift to Contango
(prices for future delivery
exceed spot prices)
Prompt agents to build stocks
Given volatility of situation in
the Middle East and North
Africa this is a benefit to
Global Energy Security
SAUDI ARABIA EFFECT

SA cutted selling prices
Unlikely to curb production amid an excess of
crude supply
SA lost market share in 2013/2014 in Asia
and Mediterranean to Irak and Iran (heavy
discounts)
Low-cost OPEC producers seeking to expand
their market share.
01-10-2015

31
01-10-2015
Source: The Economist, 05-11 September 2015
32
Sheikhs v shale
Analysis
More complex situation
Saudi Arabia Role
Erosion of OPEC influence
No control on Non-OPEC
production
Iran in difficulties
Russia, Iran, Venezuela and Nigeria
need oil above 100 US$bbl to avoid
huge fiscal deficits
Undermine competitor advantages
including alternative energies
But economics of shale oil is very
flexible
Break-even: 57 to 65 US$/bbl
Based on wells
Investment one well: 1.5 M US$
Gain in productivity:
US economic pragmatism
In the long-term shale industry may
prevail
01-10-2015

Source: The Economist, 06-12 December 2014
33
The Economist, 18-24 October 2014
01-10-2015
Source: The Economist, 25-31 Oct 2014
34
34
Source: The Economist, 05-11 September 2015
01-10-2015
35
35
QUICK WINNERS
Large oil importing
countries
Motorists
Countries where car
is dominant and
lightly taxed
QUICK LOOSERS
Large oil exporting
countries
Large oil companies
Emerging countries
depending on
oil/commodity revenues
IMPACT OF CHEAP OIL

on MARKETS
ARRAY OF POSSIBILITIES
FOR INVESTORS IS MORE
COMPLICATED
Oil prices feed into inflation
Affect actions of central
banks
Oil price spike in 2008 led
to a huge mistake in
monetary police by ECB
(raising rates on the eve of
a credit crisis)
IMPACT of OIL
PRICE DECLINE
on INVESTMENT
STRATEGIES
GS analysis
Brent at 84 US$/bbl
5% earnings growth for
S&P 500 stocks in 2014
and 8% in 2015
Brent 74 US$/bbl
More earnings up 1%
Brent at 114 US$/bbl
1% earnings growth (2014)
WITH CHEAP OIL

SECTORS to INVEST?
SHIFTS in OIL
BRING RISKS
Requires big shifts
in asset allocation
01-10-2015
EFFECT on STOCK
MARKET is COMPLEX
Oil is expense for many

Revenue for some
Adjustment of oil
companies have effects
for investors and
consumers
Where price moves to?
Information technology
Health care
Transportation stocks
(up 11% in 2014 MSCI)
Gambling groups
Manufactures
Large retailers
36
OIL PRICES
Companies as beneficiaries?
MSCI index world energy
sector down 5.5% (2014)
while equities up 3%
Oil companies cut capex and
pay shareholders through
dividends and buybacks
Keep their share price
Source: FT, 8-9 November 2014
01-10-2015

37
Impacto Econmico da Dependncia Excessiva de Combustveis Fsseis
Fonte: DGEG
01-10-2015

38
Evoluo do Consumo de Petrleo em Portugal
Fonte: BP Statistical Review of World Energy Junho 2015
39
Evoluo do Consumo de Gs Natural em Portugal
01-10-2015
40
Peso da Importao dos Produtos Energticos

no PIBpm ()
Fonte: DGEG
01-10-2015

41
Fontes de Energia Primria

Portugal, 2010
Fonte: Prof. Jos Sucena Paiva
01-10-2015

42
PORTUGAL: O PROBLEMA-CHAVE DOS TRANSPORTES
Sector dos transportes consome 36% do total da energia final;
Transportes rodovirios concentram 33% deste consumo e correspondem

a um Consumo Energtico Intensivo fortemente dependente dos
combustveis fsseis;
Geram um desperdcio colossal;
TRANSPORTES SO O PRINCIPAL
PROBLEMA ENERGTICO DO PAS
O problema agravou-se entre 1990 e 2004: aumento de consumo de 4.5% ao

ano com a expanso do parque automvel;
Nos ltimos anos verificou-se tendncia ligeira para a reduo do consumo

devido aos aumentos dos preos dos combustveis: necessidade de
consolidao desta tendncia.
01-10-2015

43
IMAGEM TRMICA do
DESPERDCIO de ENERGIA
Washington, 2012
Estrada Congestionada
Veculos em filas lentas
S 15% da energia fornecida
pela gasolina utilizada
01-10-2015

44
TRANSPORTES: QUESTES
Enorme dependncia externa do petrleo e seus derivados;
Poluio elevada e emisses de CO2;
Congestionamento do trfego nas cidades, mais desperdcio e baixa de

produtividade;
Volume desproporcionado do transporte individual em relao ao pblico;
Portugueses no tm hbito de utilizar preferencialmente os transportes

pblicos;
SOLUES
Desenvolver um novo paradigma para a mobilidade urbana baseado no

transporte pblico;
Criao de uma nova cultura com restries na circulao do carro

individual e dificuldades de estacionamento nos centros urbanos de alta
densidade;
Rever polticas de planeamento e ordenamento urbano;
Apelo e educao para a utilizao dos transportes pblicos;
Melhor gesto de acessibilidade s cidades e solues de integrao com a

rede de transportes pblicos.
01-10-2015

45
3. O PAPEL do SHALE GAS
01-10-2015

46
The Revolution of the SHALE

GAS
The Conceptual Innovation for
Shale Production
US Learning Curve
Footprint Concerns
Induced Seismicity
Knowledge of Rocks and
Evaluation of the Potential
Can the US Shale Model be
exported?
01-10-2015

47
What is the SHALE GAS?
A world class source rock and a potential

shale gas reservoir the DevonianMississippian Woodford Shale
01-10-2015

48
PRODUCTION SOLUTION:
HYDRAULIC FRACTURING
Fracture Technology is responsible for
USA success in gas shales
Use large amount of

water in a short period
of time to develop a gas well
Addition of sand or other

material (proppants) to the
fluid to keep induced fractures
open
Most wells are horizontal with

one or more horizontal legs
extending to the target sections
The legs may extend more than
2 Km from the surface location
of the well
01-10-2015

49
WORLD TOTAL GAS RESERVES
Source: The Economist, 6th August 2011
01-10-2015

50
The U.S. may be the worlds fastest-developing shale gas industry,

but China is thought have more of the cleaner alternative to coal.
China's shale gas basins are massive. The orange depicts

prospective basins while the yellow shows proven grounds. The red
lines are pipelines. International Energy Agency
51
The IEA calculates that electricity prices for German industry have tripled since 2000
Fonte: The Economist, 14th June 2014
01-10-2015

52
Private Ownership
of the Land
Fosters dynamism
and individual
initiative
Avoids burocracy and
complication
DYNAMICS of US
ENERGY MARKETS
US ENERGY LAW
Promotes
Entrepreneurship
Role of small/medium
size Independent
Companies
Design mechanisms
Incentives
CREATIVITY/
/INNOVATION
SERVICE
COMPANIES
Drilling/Fracturing
Logging/Operations
Very active
Easy access
Ability to challenge
existing paradigms
Invent new concepts
SUCCESS FACTORS of US
SHALE GAS MODEL.
INFRASTRUCTURE
Can it be exported?
PRODUCTION
SYSTEM
Availability of
pipelines and
transmission/
distribution system
Easy access
Use based on a pay
tariff
No Monopolies
Active and mature

industry
Production close to
pipelines and
consumers
Water needs
GEOLOGY
Huge basins with vast
resources
Ability to design
incentives to tap
resources
01-10-2015
ENVIRONMENTAL
REGULATIONS
Identity
environmental
impacts
Act through
regulation not
through prohibition
ACCESS to
FINANCING
Easy
Simplified
Supportive

53
US OIL SHALE: TEXAS HEARTLAND HEADS THE US OIL REVIVAL
Source: FT, 8th July 2013
01-10-2015

54
Source: BP
01-10-2015

55
FOOTPRINT CONCERNS
AIR:
Emissions (CO2 & others)

Noise and dust (trucks , operations)
LAND:
Disposals (solid waste)

Wildlife/Habitat disruption
Surface Footprint
Roads & Traffic
Induced Seismicity
Pipelines
Soil erosion
WATER:
Aquifers quality / contamination

Availability / supply
Sustainable management (flow back)
Transparency in Operations
Regulatory Response
01-10-2015

56
ENVIRONMENT SOUND WAY?
01-10-2015

57
R
I
V
E
R
S
APPLICATIONS
DECARBONIZATION OF ECONOMY
. Gas is most versatile of fossil fuels

. Used both in power generation and
transportation
. GTL may be competitive solution for
transport in Medium Term
F
O
R
. Gas is the least poluent of fossil
fuels
. May play key role in transition of
energy paradigm
F
U
R
T
H
E
R
R
I
V
E
R
S
F
O
R
F
U
R
T
H
E
R
GAS
DRIVERS
G
A
S
G
A
S
D
E
V
E
L
O
P
M
E
N
T
S
D
E
V
E
L
O
P
M
E
N
T
S
EFFECTS OF JAPAN NUCLEAR CRISIS

. Decision of some countries to slowdown
nuclear power (Germany, Italy, Japan)

. Opens a more decisive role for Gas
01-10-2015

58
4. IMPLICAES para o FUTURO
01-10-2015

59
01-10-2015

60
Source: ExxonMobil 2015 Outlook for Energy
01-10-2015
61
01-10-2015
Source: ExxonMobil 2015 Outlook for Energy
62
01-10-2015
63
ENERGY MIX CONTINUES TO EVOLVE
Source: Exxon, The Outlook for Energy: A View to 2040
01-10-2015

64
TRANSPORTATION FUELS TO SEE RISING DEMAND
Source: Exxon Mobil, the 2010 Outlook for Energy: A view to 2030
01-10-2015

65
THE GASEIFICATION of
US ECONOMY
SECULAR DOWNTURN of US
FUEL CONSUMPTION
Gas replacing coal-power plants
Peak oil consumption in 2005

Last 7 years US oil demand dropped
by 14%
GAS in the transport sector

(cities/trucks)
TECHNOLOGY IS
CHANGING THE WAY WE
LIVE, THE WAY WE WORK
AND THE WAY WE PLAY
EMERGING TRENDS in US
TRANSPORT SECTOR
Even so US DRIVERS reached
in 2012 4.8 trillion km (14 000
trips to the sun)
The change in way we live,

change the use of energy
Growing urbanization
SHIFT in HABITS?
Car-pooling schemes more
popular in US
ZIPCAR more than 800,000 users
No car taxes, no parking fees, no
mechanics bill, no car
dependence
New generation with new vision?
The growing virtualization of life
and Internet shopping
01-10-2015

US LOVE AFFAIR with

CARS SHIFTING?
Effect of high oil prices and
financial crisis
Number of passengers in
Amtrak in 2012 the highest
since 1971
Oil consumption in California
in 2012 the lowest since 1998
Chicago and other cities:
growing PEDESTRIAN and
more bicycle lanes
LA public transport sector
reaching records (9 million
passengers per month in
2012)
66
Energy Road Map and Solutions:

Many Possible Paths Leading to Same Destination
01-10-2015

67
RISE OF THE AUTOMOTIVE PATENT TECH WARS
01-10-2015

68
BUILDINGS
. Lighting 20% of world electricity
. LED / SSL
. Buildings: context
. Energetic Performance
. "Zero-Energy Homes"
- Micro-generation
Emerging Technologies:
Decarbonisation Economy
. Energy Efficiency
. Economic Competitiveness
. Security
. Environmental Sustainability
TRANSPORTATION
SYSTEMS
. Batteries and plug-in cars
. Electric vehicles
. Advanced biofuels
. Natural gas vehicles
. Evolving smart grids
. Advances in internal combustion
. Increasing fuel efficiency
. Advanced diesels
. New lighter materials
. Chemical Propulsion:
- Space Industry
ELECTRICAL AND THERMAL

GENERATION
. Sequestration and storage of CO2:
NANOTECHNOLOGIES
. Production / Storage of Energy
. Energy Efficiency
. New techniques to process
hydrocarbons
01-10-2015
- Post-Combustion
- Pre-Combustion
- Oxy-Fuel
. Electricity 30% plus expensive
"CLEAN COAL" FutureGen (USA):
1st Integrated Central
- Electricity Production
+ Hydrogen with CO2 sequestration
. Coal Gasification: Conversion in
gas (H + OC)
. Hydrogen Production
. Renewables: Wind / Solar / Waves/
Geothermal / Biomass/
Nuclear Energy: 3rd and 4th
Generation

SMART GRIDS
. Producer / Consumer
. Decentralized and distributed
networks
69
Send high voltages over long-distances to passive

customers
Main concerns: supply
electricity and meet peaks in
demand
Vertical Integrated
Big
Centralized
Regulated
High Costs
Deal with the most inefficient
part of the power industry:
the generating capacity that
is held in reserves to meet
Peak Demand
Old Business Model of
delivering through the grid
over long-distances is in
retreat
Need to take a long view
Model under pressure: new
entrants and new forms of
STORAGE and GENERATION
are eating the OLD
Business Model
Analogy to computing
industry: switch from main
frames and terminals to
CLOUD STORAGE and the
Internet
Need to do new things and
respond to COMPETITION
New Entrants
NEW ENERGY LANDSCAPE

Era of abundance in Energy
Revolution of shale gas and
shale oil
Abundant gas reserves (2 to 3 x
conventional)
Renewables playing an
increasing role
Solar energy impressive cost
reduction (75% decline last 6
years)
The Hawaii core example
Technological breakthroughs
in Storage, Energy Efficiency,
Management of Demand,
Intelligent Consumption
The revolution of NegaWatts:
the unused electricity
Clever technology with
increased efficiency is shaping
the future
Capital markets more tilted in
financing solar, storage, energy
efficiency
Costs of pollution:
decarbonisation
Demand for energy: increase
37% over next 25 years
(Internet of the Things ; new
devices to be connected)
Services provided:
Demand response
Supply
Storage
Energy efficiency
Competitive Advantages
(the Internet Model
Algorithms
Sensors
Processing power
Good Marketing
Cheaper power + better storage +

increased resilience: shape the grid
of the future
Transmission costs for electricity are
declining
Energy efficiency + Renewables +
shale gas provide abundance of
energy, accessible with new
technologies
More effective management of
supply and demand: sensors,
computer power and algorithms
Pressure and changes on Business
Models: Management of demand
response; microgrids; Prosumers
Storage business is booming:
biggest advantage avoids need of
generating capacity held in reserves
to meet peak demand
1 Mw of storage replaces 10 Mw of
such generating capacity
Batteries approaching crucial
benchmark: cost of storage 100
US$/Kwh
PRESENT/FUTURE
PAST/PRESENT
Traditional Utilities
OLD MODEL
FINANCE ENERGY FORUM
01-10-2015

71
TECHNOLOGICAL
BREAKTHROUGHS
ABUNDANT ENERGY
Cycle of low oil prices
Shale gas revolution: gas more abundant
and easier to trade
Gas reserves 2 to 3 times the
conventional; global gas market
Role of renewables
Solar renaissance
Resilience of supply
China effect on renewables: 2013
investment over 56 billion US$
Renewables energy became a serious
part of energy mix
World investment on renewables (2013)
214 billion US$ (53% for solar)
Costs of Solar: 75% reduction in 6 years
STORAGE
Getting cheaper and better
If intermittent energy can be stored
its economics drastically improved
Big advantage of storage: avoid most
inefficient part of power industry the generating capacity held in
reserve to meet peaks of demand
1 Mw storage replaces 10 Mw of
such generating capacity
Electrical batteries: GIGAFACTORY
approaching key benchmark 100
US$/Kwh
Close to grid parity
HOW the WORLD of ENERGY

is CHANCHING:
CURRENT BUSINESS MODEL
UNDER PRESSURE
NEGAWATTS and DEMANDRESPONSE REVOLUTION
Intelligent Consumption: users

generate, store and manage data
efficiently
Clever technology + Energy Efficiency
lead the change
Greater efficiency, local production
and storage
More effective management of
supply and demand
Micro Grids: new way of using
electricity; cheaper; better design;
data processing; changes in
behaviour
The Grid is getting smarter
Deal with unused electricity

Adjust consumption to meet supply
Most expensive electricity consumed
at peak time
Technique of demand response: pay
costumers to switch off at peak level
(2013 US 11.8 billion US$)
For the grid operator the spare power
gained is very useful
US/Japan examples: may lead to huge
small power savings from a large
number of consumers.
Rush Hour Rewards
Spare capacity in Europe in Winter 10
GW (19% of countries combined peak
load)
72
CAPITAL MARKETS
Understanding disruptive effect
of distributed and intermittent
generation combined with
cheaper storage and intelligent
consumption
Growth of a bond market to pay
for energy efficiency (40 billion
US$ in 2014)
Solar City (USA) Model
Price of oil fluctuates; solar is
bound to get cheaper
Business models for new energy
systems are proven and a wave
of money is breaking over the old
model
DISTRIBUTION
HOW the WORLD of ENERGY

is CHANCHING:
CURRENT BUSINESS MODEL
UNDER PRESSURE
Transmission costs for electricity

are declining (solid-state
technology)
With new Technology demand
can be managed to match
supply
Analogy to computing industry:
switch from main frames and
terminals to cloud storage and
the internet
Small producers and storage
creates resilience in the network
Innovation more fast
NEW BUSINESS MODELS

Demand-response
Big data/processing
Sensors, Computing Power,
Algorithms
Energy efficiency: invisible fuel
01-10-2015

73
THE FUTURE OF NATURAL GAS

Gas should make the world a cleaner, safer place
Source: The Economist, 6th August 2011
01-10-2015

74
01-10-2015

75
INTERLIGAES DA REDE DE GASODUTOS
Fonte: Expresso, 30 Agosto 2014
01-10-2015

76
FOUR MAJOR TRENDS

CHANGING WORLD ENERGY
MATRIX
MAJOR ROLE of GAS

Increasing share of world energy matrix
Shale Gas revolution and magnitude of
reserves
Growing electrification
Gas is most versatile of fossil fuels and

least poluent
Decarbonization
Localization
Optimization
Used both in power generation and

transportation (GTL)
Gaseification of economy
GROWTH
LOW CARBON SOLUTIONS

Buildings
and
Electric/Thermal Generation
SUSTAINABILITY
Transportation systems
LNG and EFFECTS of JAPAN

NUCLEAR CRISIS
Decision of some countries to slowdown
nuclear power (Germany, Italy, Japan)
Open more decisive role for gas and

specially LNG
OIL & GAS INDUSTRY

PUBLIC IMAGE
Clean Technologies and
Reduction of CO2 Emissions
Recent record of catastrophic accidents

does not help
Tolerance zero for Gas Flaring

CO2 sequestration and injection into
oil reservoirs (win-win approach)
Control/reduction of VOC emissions
(surface facilities)
Improve Market design mechanisms
to promote energy efficiency
01-10-2015

Need to improve risk management to

address public concerns
Industry engaged in environmental and
emissions cutting technologies
Better communication with the public
Better environmental regulations without
jeopardizing expansion of required
projects
77
01-10-2015

78
CITIES are BEST

INVENTION of MAN
Mark death of distance
Rotating platform for markets and
cultures
Connect human capital
Cities are main drivers of innovation
THE NEED of a
PARADIGM SHIFT for
WORLD CITIES
CHALLENGES for FUTURE

CITIES
More sustainable models
Address energy security
Smart grids
New model for mobility
There is no sustainability for future
without a new vision for the
development of more intelligent
cities
Sustainability is a multidimensional
concept and needs to question the
excess of the constant growth
logic and fight the waste of
resources
Cities occupy 2% of planet surface

50% of world population
Consume 75% of energy produced
Responsible for 80% of CO2
emissions
CITIES with CURRENT

LANDSCAPE IMPLY
HUGE RISKS
Frenetic urban growth
Difficulties in resources
management
Drivers of atmospheric pollution
Heat-Islands
Negative impact on earth climatic
system
Key issue: transport system
NEW MODEL for CITIES
01-10-2015
Water management
Energy management
Residuals treatment
New role of transport system based
on public transport + electric cars +
evaporation of traffic jams
New modes of access and
distribution of resources
79
GROWING ENERGY CONSUMPTION and URBANISATION:

HOW TO RUN CITIES, DELIVER SOLUTIONS
and MINIMIZE POLLUTION?
Source: The National, 9 November 2014
01-10-2015

80
DATA SERVICES
Can change cities in
XXI century as much as
electricity did in last
century
GREATER AMOUNT
OF EASILY
AVAILABLE DATA
ERA OF MASS
URBANIZATION
Can change urban life
Major opportunities
Major threats/risks
THE MULTIPLEXED
METROPOLIS
CITIES XXI CENTURY
Cyberterrorism
Big data
Processing
Conversion into knowledge
Ubiquos data services
DANGERS ON FUTURE
CITIES
Wealth
Novelty
Human Interfaces
Data
Electronic panopticians
(everybody is watched)
Hackers / cyber attacks

Labirinthic software
TRANSPORT SECTOR
Further ways to exclude the

poor
Major changes
Serendipity at risk
Automation
Self-driving cars
IT protection
01-10-2015
81
ADDRESS FINANCIAL and

REGULATORY RISKS
Carbon price uncertainty

Increasing legislation and standards on
emissions
Consumer pressure for CO2 emissions
reduction
Government policies on energy pricing
Impact of pricing fluctuations on investment
decisions
Renewal energy policy uncertainty
TECHNOLOGICAL RISKS
Uncertain political commitment
to technological incentives
Policy change undermining the
viability of investment
New technology revolution may
change all aspects of energy
services from sources to
storage
Impact on user-technologies
(light/vehicles/electric motors)
Impact on investment structure
ENERGY
COMPANIES
in the
FUTURE
OPERATIONAL
and
SUPPLY CHAIN RISKS
Future demand uncertainties
Fuel and electricity supply
disruptions
Infrastructure failure in changing
climatic conditions
Transition to cleaner technologies
making infrastructure obsolete
Cyber threats to smart grids
REPUTATIONAL RISKS
Environment pollution and liabilities
Delivery of services compromised by energy
disruptions
Increasing control on emissions performance
standards
Cost and stability of services
01-10-2015
82
OBRIGADO
01-10-2015

83

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ORDEM dos ENGENHEIROS

Lisboa, 1 de Outubro de 2015

PETRLEO e GS: a Evoluo dos Preos, as

Antnio Costa Silva

Ordem dos Engenheiros

Ordem dos Engenheiros

Ordem dos Engenheiros

Ordem dos Engenheiros

Para onde vai o Sculo XXI?

. Recursos cada vez mais

. Crise global do sistema

Ordem dos Engenheiros

Population, GDP and Primary Energy Consumption

Source: BP Statistical Review of World Energy June 2009

Ordem dos Engenheiros

Aumento significativo da procura

O paradoxo de Jevons: mais evoluo

1980: apenas 10 elementos explorados

Hoje 26 elementos da Tabela esto em

Debate entre cornucopianos e

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PRODUCTION of SELECTED COMMODITIES, 1950, 1975, and 2000

Crude oil (billion barrels)

Natural gas (tillion cubic feet)

Ordem dos Engenheiros

800 million cars

OIL USE in DEVELOPED WORLD

OIL USE in DEVELOPING WORLD

Billions of people with better incomes

WORLD ENERGY MATRIX

WORLD ENERGY MATRIX

. Dominance of Natural Gas?

1,5 billion people without access

. Reduction or not of inequality?

700 million people with scarce resources

. Reduction or not water access?

85% of growth from

Improved recovery efficiency

OIL PRICE VOLATILITY

Departure of oil prices from

Ordem dos Engenheiros

From 2003 investment growing

OIL ON THE EDGE

Ordem dos Engenheiros

CONSTRAINTS ON OIL AND GAS FLOW FROM MIDDLE EAST

Ordem dos Engenheiros

THE GEOPOLITCS OF OIL

Source: FT, 30th March 2011

THE GEOPOLITICS OF THE PIPELINES

Ordem dos Engenheiros

Source: The Economist, January 26th - February 1st

Ordem dos Engenheiros

AS FRONTEIRAS MARTIMAS no MEDITERRNEO ORIENTAL

Fonte: Noble Energy

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OIL ROUTING AKTAU-MAKHACHKALA-NOVOROSSIYSK

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Central Asia Centre System

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ENERGY GAME CHANGERS in XXI CENTURY

INDUSTRY CATASTROPHIC ACCIDENTS

EMERGENCE of PACIFIC BASIN as

Ordem dos Engenheiros

CLIMATE CHANGE and

PARTEX - Oil & Gas

PARTEX - Oil & Gas