Transcript ICAA presentation

Does Australian oil refining really matter?
Des King
CEO & Managing Director
Caltex Australia Limited
Institute of Chartered Accountants in Australia
3 April 2008
1
Outline
• World
– energy demand growth
– oil demand and supply
– refining capacity
• Australia
– refining
– demand growth for fuels
– growing fuel imports
2
World energy demand
2004
470 exajoules
3
Source: IEA World Energy Outlook 2006
An exajoule is 1018 joules
2030
715 exajoules
World energy supply
2004
470 exajoules
4
Source: IEA World Energy Outlook 2006
An exajoule is 1018 joules
2030
715 exajoules
Global oil supply forecasts
AVERAGE
OF OIL
COMPANY
ESTIMATES
5
Source: National Petroleum Council 2007
Oil supply sources
140 -
Total oil supply
(MBD)
Unconventional supply
Gap
Unconventional supply
(MBD)
16 -
NGLs, condensate, processing
gains, etc.
Biofuels
12 Middle East, West Africa, and FSU
0-
Source: Chevron
Venezuelan XHO
4-
North America, Latin America,
Asia-Pacific, and Europe
2005
6
8-
Canadian X-Heavy Oil (XHO)
2030
02005
2010
2015
2020
2025
2030
World carbon dioxide emissions
7
Source: IEA World Energy Outlook 2006 Reference Case
Global refining capacity to remain tight
Million barrels per day
100
Global refining capacity
80
60
Global refined product demand
40
20
0
1990
8
Source: P&G, IEA & PFC
1995
2000
2005
2010
2015
World overview
• Energy demand will increase 50% by 2030
• Oil, coal and gas will remain dominant
• Alternatives to conventional crude oil required to
meet demand growth
• Oil refinery capacity will remain tight medium term
9
Australian refining
industry
10 Caltex delivers diesel to the Ashton Coal Project, Hunter Valley
Australia’s refineries
Bulwer Is
Kwinana
Northern
Territory
Queensland
Lytton
Western
Australia
South
Australia
New
South
Wales
Clyde
Petroleum Products*
Production: 34,000 ML
Demand: 43,000 ML
Product imports: 22%
Kurnell
Pt Stanvac
Mobil
Geelong
CLOSED
11
Source : Australian Institute of Petroleum, DITR
Altona
Mobil
CAPACITY
REDUCED
* Petrol, diesel and jet fuel
Australian product demand and imports
• Demand for petroleum products is increasing
• Petrol
• Diesel
• Jet fuel
0 - 1%pa
4%pa
3 - 4%pa
• Percentage of petroleum products* imported
• 2006-7
• 2015
• 2030
* Petrol, diesel and jet fuel
12
Source : Caltex estimates
22%
30 - 40%
50 - 70%
Regional supply and demand remains tight
in medium term
Million barrels per day
30
25
Forecast
Asian Demand
20
15
Asian Supply
19
8
19 8
9
19 0
9
19 2
9
19 4
9
19 6
98
20
00
20
02
20
04
20
06
20
08
20
10
10
13 As at January 2007. Source: BP Statistical Review (1970–2006);
East-West (2007); CAL Analysis
Asian Product
Supply and Demand
Jamnagar refinery, India
14
Refining location advantage US$2.88/barrel
Product imports
US$5.08/barrel
freight
Crude imports
US$2.20/barrel
freight
15
Source : Freight rates are for Caltex refineries for 2007 (Caltex data).
Crude oil and petroleum product sources are for total Australian imports (DITR data).
Australian greenhouse gas emissions
• Total Australian GHG emissions 559 Mt CO2eq
• Contribution of petroleum products
16
• Petrol (motorists)
• Diesel (transport/industry)
8%
8%
• Jet/other fuels
4%
• Refinery emissions
1%
Source : Australia's National Greenhouse Accounts,
National Greenhouse Gas Inventory 2005
Other regulatory issues
• Biofuels
• Environmental requirements
• Fuel price regulation
17
Does Australian refining really matter?
• Energy security is emerging strategic issue for all
Australian industry
• Petroleum product imports are increasing – what level is
the “tipping point” for insecurity?
• Liquid fuel security can be achieved – but we have to
recognise the problem and take it into account now
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