Transcript Document

PETROLEUM STORY
Petroleum structure
• Petroleum is a naturally occurring, yellow-toblack liquid found in geologic
formations beneath the Earth's surface, which
is commonly refined into various types of
fuels. It consists of hydrocarbons of various
molecular weights and other liquid organic
compounds.
Petroleum structure
• The name petroleum covers both naturally
occurring unprocessed crude oil and
petroleum products that are made up of
refined crude oil.
• A fossil fuel, petroleum is formed when large
quantities of dead organisms,
usually zooplankton and algae, are buried
underneath sedimentary rock and subjected
to intense heat and pressure.
Composition by weight
Element
Percent range
Carbon
83 to 85%
Hydrogen
10 to 14%
Nitrogen
0.1 to 2%
Oxygen
0.05 to 1.5%
Sulfur
0.05 to 6.0%
Metals
< 0.1%
OIL RESERVES
Structure of Oil Resrves
Unit of volume
• An oil barrel (abbreviated as bbl) is a unit of volume
whose definition has not been universally
standardized.
• In the United States and Canada, an oil barrel is
defined as 42 US gallons, which is about 159 liters
•
1 barrel [US, petroleum] = 158.9872972 liter
158.9872972 * 0.88 = 139.908821536 kilograms
1 metric ton is 1000 kilograms:
139.908821536 / 1000 = 7.1475121
Top oil producers
• According to IEA top 10 oil producer countries
produced over 64 % of the world oil production in
2012.
• The top oil producers in 2012 were: Saudi Arabia 544
Mt (13 %), Russia 520 Mt (13 %), United States 387 Mt
(9 %), China 206 Mt (5%), Iran 186 Mt
(4 %), Canada 182 Mt (4 %),United Arab Emirates 163
Mt (4 %), Venezuela 162 Mt (4 %), Kuwait 152 Mt (4 %)
and Iraq 148 Mt (4 %).
• In 2012 total oil production was 4,142 Mt. In 2011 the
world oil production was 4,011 Mt demonstrating an
annually rising trend in oil production.
World
84,820,000
100%
10,900,000
13.28%
1
Russia
2
Saudi Arabia
9,900,000
12.65%
3
United States
8,453,000
9.97%
4
Iran
4,231,000
4.77%
5
China
4,073,000
4.56%
6
Canada
3,592,000
3.90%
7
Iraq
3,400,000
3.75%
8
United Arab Emirates
3,087,000
3.32%
9
Venezuela
3,023,000
4.74%
Mexico
2,934,000
3.56%
10
11 Kuwait
2,682,000
2.96%
12 Brazil
2,633,000
3.05%
13 Nigeria
2,525,000
2.62%
14 Norway
1,998,000
2.79%
15 Algeria
1,885,000
2.52%
16 Angola
1,840,000
2.31%
17 Kazakhstan
1,635,000
1.83%
18 Qatar
1,631,000
1.44%
19 United Kingdom
1,099,000
1.78%
20 Colombia
1,011,992
0.97%
Influence of oil prices
• The demand for oil is highly dependent on
global macroeconomic conditions.
• According to the International Energy Agency,
high oil prices generally have a large negative
impact on the global economic growth.
Oil prices 1987- 2013
„Seven Sisters“
• The "Seven Sisters " was a term coined in the
1950s by businessman Enrico Mattei, thenhead of the Italian state oil company Eni, to
describe the seven oil companies which
formed the "Consortium for Iran" cartel and
dominated the global petroleum
industry from the mid-1940s to the 1970s.
„Seven Sisters“
• The Anglo-Persian Oil Company (APOC) was an
English company founded in 1908 following
the discovery of a large oil field in Masjed
Soleiman, Iran. It was the first company to
extract petroleum from Iran.
• In 1935 APOC was renamed the Anglo-Iranian
Oil Company (AIOC) and in 1954 it became the
British Petroleum Company (BP), one of the
antecedents of the modern BP plc.
„Seven Sisters“
• The group comprised Anglo-Persian Oil
Company (now BP); Gulf Oil, Standard Oil of
California(SoCal) and Texaco (now Chevron);
Royal Dutch Shell; and Standard Oil of New
Jersey (Esso) and Standard Oil Company of
New York (Socony) (now ExxonMobil).
„Seven Sisters“
• Prior to the oil crisis of 1973, the members of
the Seven Sisters controlled around 85
percent of the world's petroleum reserves, but
in recent decades the dominance of the
companies and their successors has declined
as a result of the increasing influence of
the OPEC cartel and state-owned oil
companies in emerging-market economies.
„Seven Sisters“
• Being well-organized and able to negotiate as
a cartel, the Seven Sisters were initially able to
exert considerable power over Third World oil
producers.
• However, in recent decades the dominance of
the Seven Sisters and their successor
companies has been challenged by the
following trends:
New Trends
• the increasing influence of
the OPEC cartel (formed in 1960),
• a declining share of world oil & gas reserves held
by OECD countries and
• the emergence of powerful state-owned oil
companies in emerging-market economies.
• As of 2010, the surviving companies from the
Seven Sisters are BP, Chevron, ExxonMobil and
Royal Dutch Shell, which form four members of
the "supermajors" group.
"New Seven Sisters"
• The Financial Times has used the label the "New Seven
Sisters" to describe a group of what it argues are the most
influential national oil and gas companies based in
countries outside of the OECD. According to the Financial
Times this group comprises:
• Saudi Aramco (Saudi Arabia)
• China National Petroleum Corporation (China)
• Gazprom (Russia)
• National Iranian Oil Company (Iran)
• Petrobras (Brazil)
• PDVSA (Venezuela)
• Petronas (Malaysia)
OPEC
• OPEC (Organization of the Petroleum Exporting
Countries) is an oil cartel whose mission is to
coordinate the policies of the oil-producing countries.
• The goal is to secure a steady income to the member
states and to secure supply of oil to the consumers.
• The OPEC Reference Basket (ORB), also referred to as
the OPEC Basket is a weighted average of prices
for petroleum blends produced by OPEC countries. It is
used as an important benchmark for crude oil prices.
OPEC
• OPEC is an intergovernmental organization that
was created at the Baghdad Conference on 10–14
September 1960, by Iraq, Kuwait, Iran, Saudi
Arabia and Venezuela. Later it was joined by nine
more governments: Libya, United Arab
Emirates, Qatar, Indonesia, Algeria, Nigeria, Ecuad
or, Angola, and Gabon. OPEC was headquartered
in Geneva, Switzerland before moving
to Vienna, Austria, on September 1, 1965.
OPEC
• OPEC was formed at a time when the international oil
market was largely separate from centrally planned
economies, and was dominated by multinational
companies.
• OPEC's ‘Policy Statement' states that there is a right of
all countries to exercise sovereignty over their natural
resources.
• Because OPEC is an organization of countries (not oil
companies), individual members have sovereign
immunity for their actions, meaning that OPEC is not
regarded as being subject to competition law in the
normal way.
OPEC
• In the 1970s, OPEC began to gain influence
and steeply raised oil prices during the 1973
oil crisis in response to US aid to Israel during
the Yom Kippur War which lasted until March
1974.
• OPEC added to its goals the selling of oil for
socio-economic growth of the poorer member
nations, and membership grew to 13 by 1975.
OPEC
• In the 1980s, the price of oil was allowed to rise before
the adverse effects of higher prices caused demand
and price to fall.
• The OPEC nations, which depended on revenue from
oil sales, experienced severe economic hardship from
the lower demand for oil and consequently cut
production in order to boost the price of oil.
• During this time, environmental issues began to
emerge on the international energy agenda.
• Lower demand for oil saw the price of oil fall back to
1986 levels by 1998–99.
OPEC
• In the 2000s, a combination of factors pushed up oil
prices even as supply remained high.
• Prices rose to then record-high levels in mid-2008
before falling in response to the 2007 financial crisis.
• OPEC's summits in Caracas and Riyadh in 2000 and
2007 had guiding themes of stable energy markets,
sustainable oil production, and environmental
sustainability.
• OPEC has twelve member countries: six in the Middle
East, four in Africa, and two in South America.
Country
Region
Joined OPEC
Population
(July 2012)
Production (bbl/day)
Algeria
Africa
1969
37,367,226
2,125,000 (16th)
Angola
Africa
2007
18,056,072
1,948,000 (17th)
Ecuador
South
America
2007
15,223,680
485,700 (30th)
Iran
Middle East 1960
78,868,711
4,172,000 (4th)
Iraq
Middle East 1960
31,129,225
3,200,000 (12th)
Kuwait
Middle East 1960
2,646,314
2,494,000 (10th)
Libya
Africa
1962
5,613,380
2,210,000 (15th)
Nigeria
Africa
1971
170,123,740
2,211,000 (14th)
Qatar
Middle East 1961
1,951,591
1,213,000 (21st)
Saudi Arabia
Middle East 1960
26,534,504
8,800,000 (2nd)
United Arab
Emirates
Middle East 1967
5,314,317
2,798,000 (8th)
Venezuela
South
America
28,047,938
2,472,000 (11th)
Total
1960
369,368,429
33,327,700 bbl/day
Brent Crude
• Brent Crude is a major trading classification
of sweet light crude oil that serves as a
major benchmark price for purchases of oil
worldwide.
• Brent Crude is sourced from the North Sea, and
comprises Brent Blend, Forties
Blend, Oseberg and Ekofisk crudes (also known as
the BFOE Quotation). The Brent Crude oil
marker is also known as Brent Blend, London
Brent and Brent petroleum.
Global Price Benchmark
• The other well-known classifications (also
called references or benchmarks) are
the OPEC Reference Basket, Dubai
Crude, Oman Crude, and West Texas
Intermediate (WTI).
• Brent is the leading global price benchmark
for Atlantic basin crude oils.
• It is used to price two thirds of the world's
internationally traded crude oil supplies.