Hubert de Mestier du Bourg

Raw Materials (Energy)
Northeast Asia Perspective
Lecture outline

Part I - Introduction

1986-2006: Historical considerations (politics and money) – the two oil crisis, OPEC and Non-OPEC Countries. Other important political blocks (OECD). Interactions. Sea-lane chokepoints.

1. Economic growth

Relationship economic growth – energy consumption / Energy dependency (Korea), Industrialization, Globalization – Japan paradox – Pollution – The cases of China and Japan. US Dollar economy.

World population and Asia.

Japan Energy Policy, history and perspectives.

2. Importance of Middle East


3. Pollution, Climate change

Kyoto Protocol – quick survey of solutions

(consumption decrease, CO2 capture and sequestration).

4. National companies, Major oil companies

(quick approach)

Cooperation / competition.

5. Oil Major example: Total

TOTAL strategy in a global environment.

6. North East Asia perspective

(Korea, Japan, Taiwan, China)

Evolution, of the mix. (quick survey)

China: current status of energy resources and strategic countermeasures.

Energy infrastructure development.

Film: Alwynn (North Sea)

Part II - Basic Notions

1. Geology of Oil and Gas

The formation of hydrocarbons (coal, oil, gas) – geology – chemical structure – sour crudes/ sweet crudes , API classification – heavy crudes

2. Geography

Geographical repartition of main sedimentary basins (maps)

Proved oil reserves (proved, probable, potential)

Peak oil? Heavy oil, Oil sands. Energy efficiency improvement, diversification.

3. Exploration & Production

(oil and gas)

Considerations and overview: Technical explanations

Exploration / production (upstream) costs evolution.

Legal context : PSC Contracts, Conventional system

The fight for mining rights. National oil companies (JOGMEC)

4. Refining, petrochemistry

Basic notions. Refining adapted to market. (Japan)

Example (indications):

Refining industry in Thailand

Receivable: Asia Pacific data book: Refinery configuration and construction

Part III - The Players

1. OPEC

Significance of OPEC in overall world oil production and in world energy demand.

2. National Companies

Producing countries

Asia: India, South Korea, Japan, Malaysia, China, Indonesia

Middle East: ADNOC (UAE), ADGLC (UAE), QP (Qatar), Qatar Gas, Oman, NIOC (Iran), --- IEA study – GAZPROM.

Their role in promoting hydrocarbon research, development and storage.

Oil stockpile in Asia.

Consuming Countries

Sinochem, Sinopec (PRC), CNOOC (PRC), JNOC-JOGMEC (Japan), Kogas (Korea), CPC (Taiwan), OMGC (India)

3. Private Companies

The oil majors: EXXON, BP, SHELL, TOTAL, CONOCO PHILLIPS, TEXACO, CHEVRON, TOTAL in LNG, SHELL in LNG

Their strategies, Corporate social responsibility

The others: INPEX (Japan), Nippon Oil, Idemitsu, SK (Korea), Formosa Plastics / CPC (Taiwan)

4. The consortia: project companies

Ex. Sakhalin 2, East Kalimantan (Indonesia), others (Ex. in Middle East Producing countries)

Nigeria, Canada, Venezuela

Part IV - The Markets

Oil, gas, coal, LPG

1. Main economic indicators in East Asia

Japan, China, Korea, Thailand, Singapore, Taiwan, Malaysia

2. Primary energy consumption

Japan, South Korea, China, Taiwan

3. Overall energy mix evolution, biofuels

World population, evolution of needs, GDP growth

Final energy demand

Proven oil reserves / world oil supply

4. Oil Trading (oil and oil products)

a. Crude Oil

General - day to day activity, the oil markets – futures – oil pricing – price risks

Short term oil market – medium term oil market – long term oil market

Crude oil direct burning (Japan)

How to respond to the demand side? Supply side?

Contributions from the Majors

b. Product Trading – an overview

Receivable : oil products balances, Asia Pacific databank, supply, demand and prices

5. Gas Trading (LNG and Pipe gas)

Supply and demand – Market overview and importance ---- BTC case

Pricing on long term ( Europe, North America, Asia)

The Hubs (Henry Hub)

LNG – N. E. Asia (Japan, Korea, Taiwan)

China, Thailand, Singapore (Emerging markets in N.E.Asia), India.

Pipes.

Market situation, beginning 2007

A conclusion to parts 4 and 5 (see backup)

6. Biofuels

Ethanol

7. LPG

What is LPG – Definition, specificity

Markets – (World LPG market outlook)

Examples; China, Japan

LPG Terminals Japan/Korea

8. Synthetic fuels, fuel cells


9. Coal (Steam coal)


Part V - Transportation / Shipping

- crude oil (1) / natural gas (2), pipelines

Part VI - The fight against monopolies

The deregulation of oil and gas

Japan case

Deregulation in oil, gas and electric power generation, limits of the policy

The importance of METI

Overview of the situation in Korea, China, Taiwan

Part VII - Sustainable development

1. Climate change problem

GHG emissions, pollution problems (China case/others – Erika)

2. International Institutions

An approach from International Institutions (IEA) – Kyoto Protocol. Asia-Pacific partnership in clean development and climate.

3. Stakeholders Reaction

Reaction from governments and the industry : efforts to curb down green house gas emissions - Oil companies strategy (TOTAL), China example, renewable energies (wind power, solar)

4. Decrease of flaring, smoke emissions


5. Sequestration and Emissions Trade

CO2 sequestration, inadequacy between CO2 emissions and in-ground sequestration,

sulfur trade, carbon trade

6. New Technologies

New technologies, new fuels (synthetic fuels) : the case of GTL / DME / CTL Biofuels / GTX

Methanol market (competitions with DME) – DME, alternative to LPG?

Industrial waste water treatment

CO2 sequestration

7. Coal gasfication

Shell case

Part VIII - Industrial projects

The market of industrial projects in energy field

1. Engineering companies

The structure of engineering companies

Ex.: TECHNIP, LURGI (France, Germany)

TOYO (Japan), Hyundai (Korea), Chengda (China), Air Liquide (France)

2. Consortia

relations with national oil / gas cos (refining, chemical, petrochemical

industrial, lubricants etc.,)

Structure of EPC Project

3. The financing side

IMF reports

Private banks, international institutions (World Bank, Asia Development Bank)

Risk assessments (Technical, political)

Foreign presence in Asia finance

Part IX - Litigations / Arbitration


Conclusions

1. Characteristics of main energy markets in N.E.Asia. Quick evolution

2. Business ethics and risk mitigation for the compannies

3. An oil company strategy in a changing energy scene / Efforts for clean fuel

4. China and India

General conclusion

Oil upstream and refining investments

Energy scenario for 2050

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