Il ruolo del Mediterraneo nei cambiamenti del commercio globale di petrolio e gas. Giacomo Luciani Fondazione Mediterraneo Napoli, 5 aprile PDF Free Download

Il ruolo del Mediterraneo nei cambiamenti del commercio globale di petrolio e gas Giacomo Luciani Fondazione Mediterraneo Napoli, 5 aprile 2006

Copyright Giacomo Luciani The Mediterranean market complex hardly exists as an independent entity relative to the highly developed markets in northern Europe and the USA. There is no price leader among indigenous crude oils, and in oil products the size of the market is swamped in terms of volume and influence by the Rotterdam market Paul Horsnell, The Mediterranean Basin in the World Petroleum Market, page 120 The current nature of price formation and crude oil trading in the Mediterranean is perhaps best encapsulated by the answer to the question of when was a deal last transacted in flat price terms in the area and reported to a price assessment agency. The answer is 1990. ibid. page 125

Copyright Giacomo Luciani With respect to oil, Mediterranean producers of relevance are, in the order: Libya, Algeria and Egypt. Syria still a net exporter but not for long. The Med receives oil from outside the basin (Russia, Caspian, Iraq, Gulf) as well as from riparian producers.

Libya s Oil Balance in the Reference Scenario 3.5 3.0 2.5 mb/d 2.0 1.5 1.0 0.5 0.0 1971 1980 1990 2003 2010 2020 2030 Domestic consumption Net exports INTERNATIONAL ENERGY AGENCY In 2030, Libya s oil exports will have nearly doubled to 2.5 mbd.

Egypt: Decline in Oil Production and Export Copyright Giacomo Luciani Libya: Appropriate (Pragmatic) Policy, Well-Established Legal and Fiscal Framework In the short to Medium Term, Libya, not Iraq, to Become the Oil Hot Spot, Especially with Regards to Europe

Million Tons 2000 2005 2010 2015 2020 Algeria 62.3 87.6 104 116 123-143 Libya 61 92 116 131 150 Syria 16 13 3-4 -14 Egypt 12 1-12 -25-36 TOTAL 151 193 223 247 273-293

Country/million b/d 2010 2020 Azerbaijan 1 1 Kazakhstan 1.5 2.2 Turkmenistan 0.1 0.1 Russian Caspian 0.3 0.5 Total 2.9 3.8 Source: OME

Crude Oil Pipeline Project DELTA HESS KHAZAR LIMITED INPEX

Russian Export Outlets Use 7 6 5 m b/d 4 3 2 2002a 2007 2010 1 0 Eastern Europe Black Sea Baltic Sea Barents Sea Far East South Total

(million Barrels per Day) 2010 2015 2020 2025 Iran 4.0 4.3 4.7 5.0 Iraq 3.5 4.2 5.3 6.6 Kuwait 2.9 3.5 4.5 5.2 Qatar 0.6 0.7 0.8 0.8 Saudi Arabia 14.0 14.5 15.4 16.3 UAE 3.3 3.6 4.5 5.4 Total Gulf 28.3 30.8 35.2 39.3

Source: OME

An interesting new situation will be created in the East Mediterranean. Azeri and Iraqi oil will become available at Ceyhan a total in excess of 2.5 mb/d. There will be a plurality of sellers (the members of the ACG consortium, SOMO, IOCs which might become involved in Iraq). Conditions may exist for the development of a new reference crude.

To Ceyhan from Baku To Ceyhan from Kirkuk Subtotal Ceyhan To Banias from Kirkuk To Sidon from KSA (Tapline) To Sidi Kerir from KSA (SUMED) Grand Total 0.9 1.6 2.5 0.8 0.5? 2.2 5.5

150 104 100 40-50 116 100

The Mediterranean market will be very competitive. Black Sea oil will aggressively compete in Europe and try to escape to the North and South. Gulf oil may be discouraged from coming in. Actual flows will be determined by prices.

YEAR Total Used Pilot Tankers 1995 46954 17772-1996 49952 20317 4248 1997 50942 19752 4303 1998 49304 18881 5142 1999 47906 18424 4452 2000 48079 19209 4937 2001 42637 17767 6516 2002 47283 19905 7427 2003 46939 21175 6578 Source: Turkish Pilot Association

N NE Copyright Giacomo Luciani S SE

Algeria s Natural Gas Production in the Reference Scenario 200 160 120 bcm 80 40 0 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030 Hassi R'Mel In Salah Tin Fouye-Tabankort Gassi Touil In Amenas 1 Other fields New fields INTERNATIONAL ENERGY AGENCY Gas production from existing fields will plateau soon after 2010. Further gas production will come from new projects yet to be announced.

Algeria s Natural Gas Balance in the Reference Scenario 250 200 150 bcm 100 50 0 1971 1990 2003 2010 2020 2030 Domestic demand Net exports INTERNATIONAL ENERGY AGENCY Gas exports, mainly to Europe, are set to reach 144 bcm in 2030, more than double the current level both via LNG and via pipelines

Egypt s Natural Gas Production by Source 100 80 bcm 60 40 20 0 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Khalda Area NIDOCO Operated Fields Port Fouad Fields Ras El Barr (Ha'py) West Delta Deep Marine West Mediterranean Block 1 Other fields New fields INTERNATIONAL ENERGY AGENCY In the Reference Scenario, natural gas production is expected to reach 92 bcm by 2030 -- two thirds will come from new fields

Egypt s Natural Gas Balance 100 80 60 bcm 40 20 0 1990 2003 2010 2020 2030 Domestic demand Net exports INTERNATIONAL ENERGY AGENCY Egypt s net exports will increase to 2030 despite rapidly increasing domestic demand

Libya s Natural Gas Production in the Reference Scenario 60 50 40 bcm 30 20 10 0 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Bu Attifel (100-A) Intisar (103-D) Amal (012-B/E/N/R) Bouri (NC041-B) Other fields Western Libya Gas project New fields INTERNATIONAL ENERGY AGENCY Libya s existing major gas fields will decline in the next ten years. Production from new fields will account for 78% of the total by 2030.

Copyright Giacomo Luciani 3 operating pipelines from the South: Enrico Mattei (Algeria-Tunisia-Italy) since early 1980s Pedro Duran Farrell (Algeria-Morocco-Spain- Portugal-France) since 199? Green Stream (Libya-Italy) LNG from Algeria, Egypt, Libya 2 pipeline projects: MEDGAZ (Algeria-Spain) GALSI (Algeria-Sardinia-Italy) The Politics and Economics of Int l Energy Lecture 6

Copyright Giacomo Luciani Originates in renegotiation of upstream oil contract for the Bouri field Libya insisted on direct route, no transit countries Additional reserves pledged to reach minimum economic dimension Limited prospects for expansion The Politics and Economics of Int l Energy Lecture 6

Copyright Giacomo Luciani Much shorter to market than previous pipeline Promoted by CEPSA, BP, Gaz de France, Total, ENI, Endesa No transit through Morocco But: Spain is already highly dependent on Algerian gas Expected in 2008 The Politics and Economics of Int l Energy Lecture 6

Copyright Giacomo Luciani Shortest connection from Algeria to Central and Northern Italy and South Central Europe Promoted by Sonatrach, Edison, Enel, Wintershall and others No supply and very small potential market in Sardinia Eni is expanding old pipeline Gas to gas competition? The Politics and Economics of Int l Energy Lecture 6

GALSI and Central Europe Copyright Giacomo Luciani The Politics and Economics of Int l Energy Lecture 6

Copyright Giacomo Luciani Pipelines from the South never experienced transit issues No international legal instrument (treaty), but Good contractual/ownership structure Alternatives available at stake very large interests Nevertheless, preference for avoiding transit The Politics and Economics of Int l Energy Lecture 6

Copyright Giacomo Luciani Gas can reach Turkey from: Russia The Caspian Iran Iraq Egypt Intense political competition to saturate Turkish market (and prevent access to others) The Politics and Economics of Int l Energy Lecture 6

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Il ruolo del Mediterraneo nei cambiamenti del commercio globale di petrolio e gas. Giacomo Luciani Fondazione Mediterraneo Napoli, 5 aprile 2006