Ruzhinskaya T.I. Observe and analyse oil world market current situation / T.I. Ruzhinskaya // Landau

Network Volta. - Como, 2011.

T.I. Ruzhinskayа

OBSERVE AND ANALYSE OIL WORLD MARKET CURRENT

SITUATION

Different types of fossil fuels (natural energy) - coal, oil and natural

gas - known to mankind since prehistoric times. Archaeological excavations

revealed that on the banks of the Euphrates oil was extracted for 6.4

thousand years BC. It was used for various purposes, including and as a

medicine. Even the builders of Babel, the Great Wall used to bond the bricks

together, "bitumen". Asphalt was used in the construction of the hanging

gardens of Babylon, and the construction of the oldest dams on the

Euphrates River. Oil was part of an incendiary means known in the history

called "Greek fire". The peoples who inhabited the southern shores of the

Caspian Sea, oil had long been used for lighting homes. This is evidenced, in

particular, the Roman historian Plutarch, who described the campaigns of

Alexander of Macedon. The writers of the Middle East, Central Asia and

Western Europe mentioned about the oil founded in the Middle Ages. The

state of the Baku oil fields was in the XIII century. Marco Polo described it

in their works. He points out that Baku oil used for lighting and as a cure for

skin diseases. In the central regions of Russia in XVI-XVII centuries oil was

brought from Baku. It is used in medicine, art as a solvent in the

manufacture of paints, as well as in military affairs for the manufacture of

grenades, ever-burning candle by wind and "light" nuclei for the "bullet

shooting amusing."

Now there are different types of fuels in the world and Modern

economic value of oil and gas is very high. Oil and gas are unique and

extremely valuable resources. Derived products are used in virtually all

industries, in all modes of transport, military and civil construction,

agriculture, energy, home, etc. Over the last few decades of oil and gas

began to produce large quantities of a variety of chemical materials such as

plastics, synthetic fibers, rubbers, paints, detergents, fertilizers, and much

more. It is called oil "black gold", and XX century - the century of oil and

gas. Oil and gas is determined not only economic and technical potential, but

often state policy.

2

Mineral base

The number of oil reserves in the world at large, their distribution

by country and region

Nobody knows or can know how much oil lies in the bowels of the

earth and how it can be to get in the future. All figures are, at best, according

to rough estimates. Within the broad concept of oil reserves there are several

key differences. This is – stocks are the next:

• Recoverable reserves,

• Proved reserves,

• Probable or perspective reserves.

Recoverable reserves (resources) - this is the estimate of the total

amount of hydrocarbons that can be extracted from the open or unopened

deposits. Recoverable resources are generally divided into three main

categories: cumulative production, reserves and undiscovered discovered

resources.

Total production - is an assessment of all oil produced to date.

Discovered reserves - an assessment of the future cumulative production

from known deposits and is usually defined in terms of probability

distributions. Discovered resources are generally divided into proven,

probable and possible.

Proved reserves

Proved reserves - a quantity of liquid, gaseous and solid

hydrocarbons, which are based on an analysis of engineering and geological

data, with reasonable certainty, can be extracted industrially from known

accumulations, from a certain date, under certain economic conditions,

methods of development and regulatory conditions. In the case of a

deterministic method under the "reasonable certainty" refers to a high degree

of confidence in the successful extraction of volumetric reserves. In the case

of probabilistic methods must exist for at least 90% probability that the

actual amount of hydrocarbons recovered will equal or exceed the estimate.

Probable or perspective reserves

Probable reserves - these are additional resources, the probability of

drawing are based on the analysis of geotechnical data, less than the proven

reserves, but more than possible reserves. Probable reserves are

characterized by having the same probability of recovery of residual

hydrocarbons in an amount greater or less than the sum of volumetric proven

3

and probable reserves (2P). In this context, for the use of probabilistic

methods of evaluation, there must be at least 50% probability that the actual

number of extracted hydrocarbons will equal or exceed the value of 2P.

Possible reserves

Possible reserves - these are additional resources, the probability of

drawing are based on the analysis of geotechnical data, less than probable

reserves. Possible reserves are characterized by equally low probability of

recovery of residual amounts of hydrocarbons in an amount greater than the

sum of volumetric proved, probable and possible reserves (3P). In this

context, for the use of probabilistic methods of evaluation, there must be at

least 10% probability that the actual number of extracted hydrocarbons will

equal or exceed the value of 3P.

Undiscovered resources - is the amount of liquid, gaseous and solid

hydrocarbons contained in fields not yet discovered at the date of counting.

The main problem with these types of fuels is that they are not

replaced or replaced very much slower by natural processes than the rate at

which we use them, not in a reasonable amount of time (our lifetime, our

children's lifetime, etc). We can’t accelerate the rate of their replacement and

they are thus considered "used up", not available to us again.

This problem is closely linked to the 2nd problem:

1) It means that at every moment their production is limited by the

level of scientific, technological and technical development, i.e. the level of

economic development for natural reasons and uneven placement of mining

industries. Moreover, production and consumption regions are different.

Fuels are produced mostly in developing countries and consumed mostly in

developed nations. That’s why international trade plays very important role

in meeting the demand for fuels.

2) Oil price is determined on the basis of the worst and most distanced

deposits. The main factor in market functioning is raw material base, i.e.

resources. Resource extraction historically played a large role in economy.

The aim of many wars was to have access to strategic resources.

Global proven oil reserves and their distribution by

region of the world

4

As of January 1, 2010, proved world oil reserves, as reported by Oil &

Gas Journal, were estimated at 1.354 trillion barrels, an increase of 12 billion

barrels (about 1%) higher than in 2009 (see Table 1).

Table 1

Proved oil reserves (as of 1.01.2010), according to

Review Journal Oil & Gas Journal

Country Oil reserves

Share of total

world reserves,

%

1 Saudi Arabia 259,9 19,20

2 Canada 175,2 12,94

3 Iran 137,6 10,16

4 Iraq 115,0 8,50

5 Kuwait 101,5 7,50

5 Venezuela 99,4 7,34

6 UAE 97,8 7,22

7 Russian Federation 60,0 4,43

8 Libya 44,3 3,27

9 Nigeria 37,2 2,75

10 Kazakhstan 30,0 2,22

11 Qatar 25,4 1,88

12 China 20,4 1,51

13 USA 19,2 1,42

14 Brazil 12,8 0,95

15 Algeria 12,2 0,90

16 Mexico 10,4 0,77

17 Angola 9,5 0,70

18 Azerbaijan 7,0 0,52

19 Norway 6,7 0,49

rest of the World 72,2 5,33

whole world

1 353,7 100,00

Note: Oil & Gas Journal collects estimates of proved reserves from the annual survey of

official sources, including government agencies and ministries. Since most countries do

not estimate their reserves each year, many of the figures in the latest report OGJ remain

unchanged from last year.

5

According to the Oil & Gas Journal, 56% of the world's proven oil

reserves are located in the Middle East. But only less than 80% of the

world's proven oil reserves are concentrated in eight countries, of which only

Canada (with its oil sands) and the Russian Federation are not members of

OPEC (Fig. 1).

But according to other sources, such as BP Statistical Review of

World Energy June 2011bp, published by British Petroleum, global oil

reserves increased by 6.6 billion barrels (1383 billion barrels in 2010, see

Table. 2).

About the same data lead and experts at British Petroleum in its

Statistical Review of World Energy (November 2010): at current rates of

extraction oil fields of Kuwait runs through 128 years, Saudi Arabia -

through 85 Iran - 67, Russia - 20 Turkmenistan - 12, USA - 10 years,

Azerbaijan - 67 years. Iraq oil is enough for almost 129 years. At the present

time the need for countries of the world's oil is approximately 3.85 billion

tons per year. Africa's oil reserves are divided mainly between Libya,

Nigeria, Algeria, Angola and Egypt.

In the Asia-Pacific region's total reserves of oil are in the main fall on

China, Indonesia, India and Malaysia.

The aforementioned increase in total world proven oil reserves is due

to the fact that in 2010 were revised hydrocarbon reserves in the direction of

increasing in countries such as India, Brazil, Russia, Uganda, Colombia,

Ghana, which preceded the reduction of them in Mexico and Norway. In

2010, the rate of global proven oil reserves had been increased to 44 billion

barrels, compared with 2009, due to the fact that Venezuela has significantly

revised their reserves upwards of 39 billion barrels, as well as a slight

increase in the U.S., Russia and Libya.

As for the coefficient - R / P, it increased slightly in 2010 compared

with 2009 (from 45.7 years to 46.2 years), i.e. global proven oil reserves in

2010 would be enough to satisfy the global production of 46 years.

Coefficient - R / P is calculated by dividing the remaining reserves at year-

end production in the current year and the result is a period of time, which

shows in how many years will be enough remaining stock, if production will

continue at the same level.

It should be noted that a substantial increase in official estimates of

proven reserves in Venezuela in 2010 changed the rate R/P in Latin America

from 80.6 years in 2009 to 93.3 years in 2010.

Table 2

6

Proved oil reserves at the end and the beginning of 2010, according to

statistics from BP Statistical Review of World Energy June 2011bp

№

Countries

Proved

oil

at the end of

2010

(billion bbl.)

Share stocks

oil in total at

the end of 2010

rate

R / P * at

the end of

2010

Proved

oil

at the end

of 2009

(billion

barrels) 1 Saudi Arabia ^ 264,5 19,1% 72,4 264,6

2 Venezuela^ 211,2 15,3% ** 211,2

3 Iran ^ 137,0 9,9% 88,4 137,0

4 Iraq^ 115,0 8,3% ** 115,0

5 Kuweit ^ 101,5 7,3% ** 101,5

6 UAE^ 97,8 7,1% 94,1 97,8

7 Russia 77,4 5,6% 20,6 76,7

8 Libya ^ 46,4 3,4% 76,7 46,4

9 Kazakhstan 39,8 2,9% 62,1 39,8

10 Nigeria ^ 37,2 2,7% 42,4 37,2

11 Canada 32,1 2,3% 26,3 32,1

12 USA 30,9 2,2% 11,3 30,9

13 Qatar ^ 25,9 1,9% 45,2 25,9

14 China 14,8 1,1% 9,9 14,8

15 Brazil 14,2 1,0% 18,3 12,9

16 Angola ^ 13,5 1,0% 20,0 13,5

17 Algeria^ 12,2 0,9% 18,5 12,2

18 Mexico 11,4 0,8% 10,6 11,7

19 India 9,0 0,7% 30,0 5,8

20 Azerbaijan 7,0 0,5% 18,5 7,0

21 Norway 6,7 0,5% 8,5 7,1

The whole world,

among them:

1383,2 100,0% 46,2 1376,6

OECD countries 91,4 6,6% 13,5 92,0

OPEC 1068,4 77,2% 85,3 1068,6

Countries outside of

OPEC

188,7 13,6% 15,1 182,6

European Union

countries

6,3 0,5% 8,8 6,2

Former Soviet Union 126,1 9,1% 25,6 125,4

7

* Reserves to Production (R / P), ratio.

** More than 100 years.

^ OPEC members.

Annual Statistical Bulletin 2010/2011 Edition [3], published by the

Organization of the Petroleum Exporting Countries states that global oil

reserves increased by more than 130.7 billion barrels due to the fact that the

proven reserves of crude Venezuela have been revised upwards by 40%

reached 296.5 billion barrels in 2010 and were higher by more than 31

billion barrels of proven reserves of Saudi Arabia, making Venezuela the

largest country in the world in terms of proven oil reserves (see Table 3).

Table 3

Global proven crude oil reserves in 2009-2010,

according to statistics from Annual Statistical Bulletin 2010/2011 Edition

№ Countries

Proved

oil

at the end of

2009

(billion bbl.)

Proved

oil

at the end of

2010

(billion bbl.)

Changes in

2009/2010,

in%

1 Venezuela 211 173 296 501 40,4

2 Saudi Arabia 264 590 264 516 0,0

3 Iran 137 010 151 170 10,3

4 Iraq 115 000 143 100 24,4

5 Kuwait 101 500 101 500 0,0

6 UAE 97 800 97 800 0,0

7 Russian Federation 79 432 79 432 0,0

8 Libya 46 422 47 097 1,5

9 Kazakhstan 39 800 39 800 0,0

10 Nigeria 37 200 37 200 0,0

11 Qatar 25 382 25 382 0,0

12 USA 19 121 19 121 0,0

13 China 18 000 18 000 0,0

14 Brazil 12 802 12 857 0,4

15 Algeria 12 200 12 200 0,0

16 Mexico 11 692 11 692 0,0

17 Angola 9 500 9 500 0,0

18 Norway 7 078 7 078 0,0

8

19 Azerbaijan 7 000 7 000 0,0

20 Sudan 6 700 6 700 0,0

21 Ecuador 6 511 7 206 10,7

22 India 5 800 5 820 0,3

23 Oman 5 500 5 500 0,0

24 Malaysia 5 500 5 500 0,0

25 Canada 1) 4 900 4 900 0,0

The whole world, among

them: 1 336 315 1 467 012 9,8

OECD countries 1 064 288 1 193 172 12,1

OPEC 79% 81%

2,1

Countries outside of OPEC 53 553,0 53 566,0 0,0

European Union countries 128 118 128 118 0,0

1) Data refer to the conventional crude oil

Produced by statistical changes raise doubts about the extent to which

all economically viable discoveries of heavy oil in Venezuela, since the

majority of heavy oil in the Orinoco Belt is difficult and expensive to

extract. It also follows from the above review that the increased volume of

proven oil reserves in Iraq and Iran (24.4%, to 143.1 billion barrels, and

10.3%, to 151.2 billion barrels, respectively).

Today the main energy sources such as oil, gas and coal play a lead

role in the world economy, defining the way of its development. Speaking

about the current situation in the energy sector it is important to divide it into

two parts: before financial crises and after – because it affected the energy

sector mostly.

Concerning the geographical concentration of the world energy

sources production it can be proved that it is high enough. More than 50% of

all fuel types production accounted for such countries as USA, China,

Russia, Saudi Arabia, Canada and Iran (in spite of the fact, that only USA,

China and Russia offered about 40%). The concentration of production by a

special fuel type is also high. For example, in gas sector six countries offered

about 60% of produced gas, in nuclear sphere – more than 70%, and in coal

industry – nearly 80%.

Besides that it is important to notice, the regions of consumption were

not in phase with regions of production. The biggest net-exporter of energy

sources were the following countries: Russia, Saudi Arabia, Australia,

Norway, Canada, Iran, Algeria, Indonesia, Venezuela. The biggest net-

9

importers were: USA, Germany, South Korea, Italia, France, China, Spain,

India and Taiwan.

According to the Oil & Gas Journal, 56% of the world's proven oil

reserves are located in the Middle East. But only less than 80% of the world

proven oil reserves are concentrated in eight countries, of which only

Canada (with its oil sands) and the Russian Federation are not members of

OPEC (Fig. 1). Figure 1

Proved oil reserves 2010 (bln barrels)

12

40

10

01

19

13

51

94

75

3

13

54

0 200 400 600 800 1000 1200 1400 1600

Middle East

North America 192

Central and South America

Africa

Eurasia

Asia

Europa

Total world

Figure 1. Source: Oil & Gas Journal, 2011, June.

No one can know for certain how much oil and gas remains to be

discovered. Considering a tendency to increase oil prospecting, reserves may

grow as more oil and gas deposits are found around the world. Continental

North America and much of continental Europe have already been explored

heavily, and any new discoveries are likely to be small. But some areas of

the globe are unexplored and new deposits may be found. The problem is

that there are few if any really large deposits of oil in the world. They call

Russia the last poorly explored stockpot in the world, and this opinion is

partly grounded. The extent of exploration of natural resources at the

beginning of 21st century is less than 41%.

10

States and companies have experienced major success in discovering

significant new oil and gas reservoirs offshore, including deep-sea zones of

North and South Atlantic, the Gulf of Mexico, Alaska, off the western coast

of Africa (Angola, Nigeria), Russia, and many areas of Asia (China,

Vietnam and Australia). Technology advances have enabled the industry to

increase offshore production dramatically in the past decade. Now about 1/3

of world oil is produced offshore.

The extraction of oil geographically mostly coincides with resources

placement but not fully.

Last 10-15 years the rates of extraction were higher than the rise in

economics of developed countries, in spite of the fall in intensity of

materials and energy use.

In 1973-2007 world crude oil production rose by 1.4 times up to 3.9

billion t, mostly due to the economic growth in non-OECD countries

(Middle East) and China.

Although oil is produced in more than 60 countries, more than 60% of

oil is extracted in 10 largest producers1.

Only in 2005 Norway and Nigeria were among the first 10 producers.

We note substantial rise in production in Russia last years.

World oil production comes from more than 830,000 oil wells. More

than 520,000 of these wells are in the United States, which has some of the

most mature producing basins in the world. On average, an oil well in the

United States produces only 11 B/D, compared with 199 B/D in Russia,

3,674 B/D in Norway, and 5,404 B/D for a well in Saudi Arabia.

Comparable data for natural gas wells are not readily available.

The worldwide production of oil

World oil production increased by 1.8 million barrels per day, or

2.2%, according to the BP Statistical Review of World Energy June 2011b,

which is not consistent with the rapid growth of consumption (see Table 4).

Table 4

The worldwide production of crude oil by country in 2009-2010,

according to statistics from BP Statistical Review of World Energy June

2011bp

1 IEA, 2008

11

№ Countries

Oil production in

2009

(thousand

barrels)

Oil production

in 2010,

(thousand

barrels per

day)

Changes in

2009/2010

Share in

world oil

production

1 Russian Federation 10035 10270 2,2% 12,9%

2 Saudi Arabia 9893 10007 0,7% 12,0%

3 USA 7271 7513 3,2% 8,7%

4 Iran 4199 4245 0,9% 5,2%

5 China 3800 4071 7,1% 5,2%

6 Canada 3224 3336 4,3% 4,2%

7 Mexico 2979 2958 -0,8% 3,7%

8 UAE 2750 2849 3,5% 3,3%

9 Kuwait 2489 2508 0,6% 3,1%

10 Iraq 2442 2460 0,6% 3,1%

11 Nigeria 2061 2402 16,2% 2,9%

12 Brazil 2029 2137 5,3% 2,7%

13 Norway 2358 2137 -9,4% 2,5%

14 Angola 1784 1851 3,8% 2,3%

15 Algeria 1818 1809 -0,3% 2,0%

16 Kazakhstan 1688 1757 4,4% 2,1%

17 Libya 1652 1659 0,5% 2,0%

18 Qatar 1345 1569 13,5% 1,7%

19 Great Britain 1452 1339 -7,7% 1,6%

20 Azerbaijan 1033 1037 0,5% 1,3%

The whole world,

among them: 80 278 82 095 2,2% 100,0

OECD countries 18471 18490 0,2% 22,1%

OECD countries 61807 63605 2,7% 77,9%

OPEC 33365 34324 2,5% 41,5%

Countries outside of

OPEC 33699 34287 1,9% 41,7%

European Union

countries 2088 1951 -6,5% 2,4%

Former Soviet Union 13214 13484 2,0% 16,8%

12

Increase in production was divided between producing countries

outside OPEC and non-OPEC producers. The increase in production in 2010

amounted to 960.0 thousand barrels per day or 2.5%, despite the production

limit of OPEC, enacted in late 2008 and continued in the course of 2010,

and, besides, there has been a softening labor discipline and increased output

growth, is not subject to production quotas. The largest increase in OPEC

production have shown that Nigeria (340.0 thousand b/d.) and Qatar (220.0

thousand b/d). Oil production in non-OPEC production increased by 860.0

thousand b/d, or on 1.8%. The largest increases in production were recorded

in countries such as China (271.0 thousand b/d) United States (242.0

thousand b/d) and Russia (236.0 thousand b/d).

Prolonged decline in oil production in 2010 in Norway and the UK

was partly offset by increases in other countries on countries outside of

OPEC, had 58.2% of global oil production, i.e. about the same as in 2000.

Table 5

The worldwide production of oil in 2009-2010,

according to statistics from Annual Statistical Bulletin 2010/2011

Edition

№ Countries

Oil production

in 2009 (thousand

barrels).

Oil production in

2010 (thousand barrels).

Changes in

2009/2010

1 Russian Federation 9 650,4 9 841,3 2,0%

2 Saudi Arabia 8 184,0 8 165,6 -0,2%

3 USA 5 360,6 5 512,1 2,8%

4 China 3 794,6 4 076,6 7,4%

5 Iran 3 557,1 3 544,0 -0,4%

6 Venezuela 2 878,1 2 853,6 -0,8%

7 Mexico 2 601,4 2 575,9 -1,0%

8 Iraq 2 336,2 2 358,1 0,9%

9 UAE 2 241,6 2 323,8 3,7%

10 Kuwait 2 261,6 2 312,1 2,2%

11 Brazil 1 950,4 2 054,7 5,3%

12 Nigeria 1 842,0 2 048,3 11,2%

13 Norway 1 989,2 1 799,3 -9,5%

14 Libya 1 473,9 1 486,6 0,9%

15 Angola 1 738,9 1 691,2 -2,7%

13

16 Kazakhstan 1 256,3 1 333,4 6,1%

17 Canada 1 216,9 1 206,2 -0,9%

18 Great Britain 1 291,7 1 199,1 -7,2%

19 Algeria 1 216,0 1 189,8 -2,2%

20 Azerbaijan 1 014,4 1 026,7 1,2%

The whole world,

among them: 68 969,5 69 744,9 1,1%

OECD countries 13 527,8 13 306,5 -1,6%

ОПЕК 28 927,1 29 183,0 0,9%

Outside of OPEC

countries share 41,9 41,8 -0,2%

Former Soviet Union 12 257,9 12 516,8 2,1%

Global consumption of oil

After falling for two consecutive years, global oil consumption rose

by 2.7 million barrels per day or 3.1% to a record level of 87.4 million

barrels per day according to the BP Statistical Review of World Energy June

2011bp (see Table 6).

Table 6

Global consumption of oil in 2009-2010, according to statistics from BP

Statistical Review of World Energy June 2011bp

№ Countries

Oil

consumption

in 2009

(thousand

barrels)

Oil consumption

in 2010

(thousand barrels)

Changes in

2009/2010

Share in

world oil

consumption

1 USA 18771 19148 2,0% 21,1%

2 China 8201 9057 10,4% 10,6%

3 Japan 4391 4451 1,5% 5,0%

4 India 3211 3319 2,9% 3,9%

5 Russia 2936 3199 9,2% 3,7%

6 Saudi Arabia 2624 2812 7,1% 3,1%

7 Brazil 2399 2604 9,3% 2,9%

8 Germany 2409 2441 1,1% 2,9%

9 South Korea 2326 2384 2,5% 2,6%

10 Canada 2179 2276 5,4% 2,5%

11 Mexico 1996 1994 -1,2% 2,2%

14

12 Iran 1787 1799 1,0% 2,1%

13 France 1822 1744 -4,7% 2,1%

14 Great Britain 1610 1590 -1,0% 1,8%

15 Italy 1563 1532 -2,7% 1,8%

16 Spain 1525 1505 -1,6% 1,8%

17 Indonesia 1289 1304 0,7% 1,5%

18 Singapore 1067 1185 10,9% 1,5%

19 Thailand 1121 1128 0,5% 1,2%

20 Netherlands 1041 1057 0,9% 1,2%

The whole

world, among

them: 84 714 87 382 3,1%

100,0%

OECD countries 45963 46438 0,9% 52,5%

Outside of

OECD countries 38751 40944 5,5% 47,5%

European Union

countries 14016 13890 -1,1% 16,4%

Former Soviet

Union 4153 4349 4,6% 5,0%

Oil consumption in OECD countries in 2010 was increased by 0.9%

(475.0 thousand b/d). And in non-OECD consumption growth was a record

2.2 million barrels per day, or 5, 5%, which was the highest annual growth

rate, which was registered in terms of volume. It should be noted that the

growth rate of oil consumption remain the highest in China and the Middle

East. Chinese consumption growth in 2010 was increased by 860.0 thousand

barrels per day, accounting for 10.4%. As can be seen from the statistics

published in the US Energy Information Administration (EIA) [5], global oil

consumption rose by more than 1.1 million barrels per day, or 1.3%,

reaching a record level of 85.2 million barrels per day, which is not

significantly different from the statistical data published by BP Statistical

Review of World Energy June 2011bp (see Table 7).

Table 7

Global consumption of oil in 2009-2010, according to statistics from US

Energy Information Administration (EIA), International Energy

Statistics

15

№

Countries

Oil consumption

in 2009

(thousand

barrels/d)

Oil

consumption in

2010 (thousand

barrels/d))

Share in world

oil

consumption

In 2010

1 USA 18771 19148 22,0%

2 China ** 8678 9539 10,9%

3 Japan 4393 4452 5,1%

4 India 3110 3182 3,6%

5 Russia 2740 2937 3,4%

6 Brazil 2522 2654 3,0%

7 Saudi Arabia 2438 2643 3,2%

8 Germany 2452 2495 2,8%

9 South Korea 2188 2251 2,5%

10 Canada 2157 2208 2,4%

11 Mexico 2070 2072 2,3%

12 France 1870 1861 2,1%

13 Iran 1691 1845 2,1%

14 Great Britain 1646 1622 1,8%

15 Italy 1543 1528 1,7%

16 Spain 1467 1441 1,5%

17 Indonesia 1268 1292 1,3%

18 Singapore 927 1080 1,0%

19 Netherlands 1005 1008 1,0%

20 Taiwan 971 1002 1,1%

21 Thailand 940 988 1,0%

22 Australia 951 960 1,0%

23 Venezuela 723 746 0,9%

24 Egypt 716 740 0,9%

25 Iraq 636 694 0,8%

top 25 consuming oil

countries

67873 70388 80,9%

rest of the world 16324 16281 19,1%

Whole world: 84325 87043 100,0%

** Including Hong Kong and Macau. Consumption in Hong Kong was 333,000 b / d. in

2010 and 338,000 b / d. Consumption in 2009 was 17 000 Macao b /. in 2010 and 16 000

b / d. in 2009

16

The latest study by the journal Oil & Gas Journal, the ability of crude

oil in the world in 2010 increased again (Fig. 2).

Figure 2

Figure2. Worldwide refining capacity, according to the magazine Oil & Gas Journal,

June.

In 2010, according to a survey conducted, the magazine OGJ, the total

capacity to 662 refineries increased by more than 88.2 million bpd, an

increase of 1 million barrels per day compared with the previous year, which

was then 87.2 million barrels per day to 661 oil refinery and in 2008 a study

of the same journal (OGJ) has registered a worldwide capacity of refineries

to 85.6 million barrels per day at 655 refineries.

Although the level of capacity growth in 2010 was still significantly

higher than increases in 2008 (300 thousand b/d), 2007 (130.0 thousand b/d),

2006 (52.0 thousand b d), but it was less than in 2009.

The growth of production capacity in oil refining in Asia was the

world's leading and an increase of nearly 1.5 million barrels per day. In

2010, the Asia-Pacific region was launched, as it was in 2009, three new oil

refineries. Production capacity in North America remained almost

unchanged, while in Western Europe, he declined, as companies shut

inefficient plants to rationalize capacity to meet changing market needs.

Other regions of the world with an increase in refining capacity had

little or no benefit.

17

Major oil companies (refiners)

Table 8 shows the top 25 oil companies, which own most of the global

production capacity, according to the magazine Oil & Gas Journal.

Major changes positions in the table below, starting from January 1,

2010, include only Chevron and Valero Energy Corp, which dropped two

steps down. China National Petroleum Co. and Total raised a notch.

Chevron's motion is based on increasing its capacity to GS Caltex and

Caltex Australia.

Valero Energy Corp. completed the sale of its refinery in Polsboro,

New Jersey (capacity 185.0 thousand b / d). holding PBF Holding Company

LLC, a subsidiary of PBF Energy Company LLC of Greenwich, Conn. and a

Swiss oil company Petroplus Holdings, which agreed to buy Valero's

Delaware City, through its joint venture investment PBF Energy.

Table 8

Leading oil companies in the world, according to a survey of the

journal Oil & Gas Journal Place

on 1.01.2011

Place

on 1.01.2010

Companies Capacity (b/d)

1 1 ExxonMobil Corp. [USA] 5 783 000

2 2 Royal Dutch/Shell [NL/UK] 4 509 239

3 3 Sinopec [China] 3 971 000

4 4 BP [UK] 3 325050

5 5 ConocoPhillips [USA] 2 778 200

6 10 Chevron Corp. [USA]** 2 755 600

7 7 PDVSA [Venezuela] 2 678 000

8 6 Valero Energy Corp. [USA] 2 616 500

9 8 CNPC [China] 2 615 000

10 9 Total [France] 2 451 106

11 11 Saudi Aramco [Saudi Arabia] 2 433 000

12 12 Petrobras [Brazil] 1 997 000

13 13 Pemex [Mexico] 1 703 000

14 14 NIOC [Iran] 1 451 000

15 15 JX Nippon Oil & Energy [Japan] 1 423 200

16 16 Rosneft [Russia] 1 293 000

17 17 OAO Lukoil [Russia] 1 217 000

18

18 18 Marathon Petroleum Co [USA] 1 188 000

19 19 Repsol YPF SA [Spain] 1 105 000

20 20 KNPC [Kuwait] 1 085 000

21 21 Pertamina [Indonesia] 993 000

22 22 Agip Petroli SPA [Italy] 904000

23 23 Sunoco Inc [USA] 825 000

24 24 SK Corp. [South Korea] 817 000

25 25 Flint Hills Resources [USA] 816 525

China National Petroleum Co. (China) moved up due to changes in

position of the company Valero Energy Corp. (U.S.), Total (France)

provides information on reducing their production capacity.

Other refiners have remained at the same locations where they were

earlier in the year.

International trade in oil (the main exporters and

importers)

After two consecutive declines, the global oil trade increased by 2.2%

or 1.2 million barrels a day, with net imports of the Asia-Pacific, is almost

90% growth. Net imports increased significantly in China (+14.6%, 680.0

thousand b /d.), and Japan (+7.1%, 280 thousand b/d). The increase in net

exports was mainly from the former Soviet Union (7.2%, 570.0 thousand

b/d) and the Middle East (+2.6%, 470.0 thousand b/d). The increase in

international oil trade has been roughly divided between crude oil and

petroleum products, even though crude oil still accounts for 70% of global

oil trade.

The situation on the world oil market not only determines the level of

extraction of raw materials, but also its consumption, the distribution of

consumption across countries and regions. The last has a decisive influence

on the volume and direction of export deliveries (see Table 9).

Table 9

Global oil exports by country in 2009 - 2010, according to statistics

Annual Statistical Bulletin 2010/2011 Edition

Worldwide export

(thousand barrels) Changes in

2009/2010

in % Countries 2009 2010

1 Saudi Arabia 6268,0 6644,0 6,0

19

2 Russian Federation 5608,0 5609,0 0,0

3 Iran 2232,0 2248,0 0,7

4 UAE 1953,0 2103,0 7,7

5 Nigeria 2160,0 2464,0 14,1

6 Iraq 1906,0 1890,0 -0,8

7 Norway 1773,0 1605,0 -9,5

8 Angola 1770,0 1683,0 -4,9

9 Venezuela 1608,0 1562,0 -34,9

10 Canada 1491,0 1388,0 -6,9

11 Kuwait 1348,0 1430,0 6,0

12 Mexico 1312,0 1459,0 11,2

13 Libya 1170,0 1118,0 -4,5

14 Great Britain 776,0 741,0 -4,5

15 Qatar 647,0 586,0 -9,3

Whole world, among them: 38519,0 37823,0 -1,8

OPEC 22138,7 22776,8 2,9

Share of OPEC 57,5 60,2

OECD countries 5013,0 4772,0 -4,8

Former Soviet Union

countries 6011,0 6061,0 0,8

In general, statistics show that OPEC constantly benefited from high

oil prices in 2010, with a total value of their oil exports, which increased by

27%, to 745.1 billion dollars, while their total gross domestic product grew

by 11%, to 2.3 trillion dollars.

Due to the fact that the statistics published in the Annual Statistical

Bulletin 2010/2011 Edition, no amount of oil imported by China, the

research conducted is incomplete.

Table 10

Global crude oil imports by country in 2009 - 2010, according to

statistics from Annual Statistical Bulletin 2010/2011 Edition

Worldwide import

(thousand barrels) Changes in

2009/2010 in % Countries 2009 г. 2010 г.

1 USA 9062,3 9183,9 1,3

2 China 4365,3 3945,2 -0,9

20

3 Japan 3445,1 3469,9 0,7

4 India 2597,9 2597,9 0,0

5 South Korea 2325,9 2377,4 2,2

6 Germany 2152,3 1881,6 -12,6

7 France 1682,4 1294,8 -23,0

8 Italy 1650,3 1585,7 -3,9

9 Spain 1163,2 1057,2 -9,1

10 Great Britain 1059,8 963,5 -9,1

11 Netherlands 981,6 1033,2 5,3

12 Taiwan 945,3 876,2 -7,3

13 Thailand 810,7 816,9 0,8

14 Canada 798,3 769,5 -3,6

15 Belgium 678,6 674,4 -0,6

16 Singapore 600,3 714,7 19,1

Whole world, among

them: 42336,3 41951,9 -0,9

OECD countries 28794,7 28043,4 -2,6

These statistics were published by US Energy Information

Administration (China Country Analysis Briefs, 2008-2010). According to

these data, net petroleum imports from China reached approximately 4.3

million barrels per day in 2009, making it the second largest in the world net

oil importer after the United States, while China first began to import more

oil than Japan (see Table 11).

Table 11

The main oil-importing countries in 2008-2010, according to statistics

U.S. Energy Information Administration (China Country Analysis

Briefs, 2008-2010)

Countries

Oil imports by country

(million barrels. per day)

2008 2009 2010

1 USA 9,6 9,6 11,0

2 China 4,8 4,3 3,9

3 Japan 4,3 4,2 4,6

4 Germany 2,3 2,3 2,4

21

5 India 2,3 2,2 2,1

6 South Korea 2,2 2,1 2,1

Prices of major brand oil during the period 2009 - 2010

Traditionally, we operate with the general concept of "the world oil

market", but detailed analysis shows that this market is not homogeneous

and it has its regional peculiarities. Thus, the regions of North America,

Europe, CIS and Asia Pacific are the major consumers of oil. In spite on this

such markets, like Pacific and North America markets, which provided by

their own production respectively by 41% and 56%, they are the most

vulnerable and unstable. Characteristically the crisis’ situations on these

markets were caused by sharp fluctuations in oil prices in the last decade.

Speaking about 2009 economy-wise, it was a very tough year, with

respective governments having to initiate stimulus packages. At the

beginning of the year, the price of crude oil had fallen to around $33/b — a

very low price — but over the ensuing months this had steadily increased to

around $75/b, which was very comfortable. Through its actions OPEC had

helped the economy recover. The Organization has made sure it did not do

anything that could hurt the global economic recovery, but at the same time

it looked to the welfare of its Member Countries. The decision taken in

Oran, Algeria in December 2008 to cut production was taken at the right

time and with the right amount of cut. Compliance to the cut by Member

Countries was, at first, excellent, although it had slipped since. But it was

still at a reasonable level of around 60 per cent.

The cost of Brent crude oil in 2010 averaged $ 79.50 per barrel, up

29% more than in 2009, but still nearly $ 18 a barrel below the record level

of 2008 (see Table 12).

Table 12

Average prices for major brand of oil for the period 2009 - 2010,

according to statistics from BP Statistical Review of World Energy June

2011bp

By year

Name brands of oil

Dubai Brent Nigerian

Forcados

West Texas

Intermdiate

Price in US dollars per barrel (average)

22

2006 61,50 65,14 67,07 66,02

2007 68,19 72,39 74,48 72,20

2008 94,34 97,26 101,43 100,06

2009 61,39 61,67 63,35 61,92

2010 78,06 79,50 81,05 79,45

The reason for rising prices at the end of 2010 there was a significant

increase in oil demand, as well as ongoing operating restrictions on its

OPEC production, causing prices peaked at almost $ 94 per barrel at year's

end, according to statistics published in the BP Statistical Review of World

Energy, June 2011bp.

Conclusions, forecast

According to the statistical review of all major types of fuel, which is

issued annually by British Petroleum (Statistical Review of World Energy

June 2011bp), we can conclude that 2010 was a year of rapid growth in

energy consumption and high growth in demand for all types of fuel - the

highest since 1973 year. This trend is now determined by a rapid rise of the

economies of industrial countries and their increasing share in global GDP.

The growth rate for all major types of fuel has almost doubled compared to

the average level over the last decade, and the increase in energy

consumption was higher in its long-term trends in all regions of the world.

Analysis and forecast of domestic and international energy supply

system point to a further increase in the coming decades of global

consumption of energy resources. In regional terms, the fastest demand for

oil and gas will increase in Asia Pacific, mainly China, India, Indonesia,

Philippines. However, globally, there are only a few major raw material

bases of hydrocarbons, which may account for satisfaction of future energy

needs. This is a politically unstable Middle East and Africa, economically

and technologically difficult and geologically poorly studied Arctic shelf, as

well as north of Western Siberia (Yamal-Nenets and Khanty-Mansi

Autonomous District) and the territory of the Siberian platform (Irkutsk

region, united Krasnoyarsk territory, the Republic of Sakha.) There are also

opportunities for significant increases in oil and gas on the shelf seas of the

Far East (Sakhalin Island, etc.). Promising source of energy raw materials to

the fastest growing markets, Asia-Pacific region and far-reaching, especially

in China, most approached Western Siberia, Eastern Siberia and the Far

East.

23

In the foreseeable future a major factor in rising oil prices is and will

be growth in world GDP, and hence oil demand in developing countries and,

above all, in the demographic giants like China and India, as well as in many

other rapidly developing countries (Brazil, countries with economies in

transition) - will increase. The rate of growth of energy consumption in these

countries is expected to outpace growth in GDP, due to the fact that the

above are in the process of industrialization and the formation of the middle

class. These factors determine the demand for energy, primarily oil. Such

factors, like growth energy demand in China and India and maintain the

level of demand in the U.S. (the largest consumer of oil) are also given

crucial importance in long-term trend of rising oil prices.

References:

Annual Statistical Bulletin 2010/2011 Edition 010_2011.pdf

http://www.opec.org/opec_web/static_files_project/media/downloads/public

ations/ASB2

BP Statistical Review of World Energy June 2011bp

http://www.bp.com/assets/bp_internet/globalbp/globalbp_uk_english/reports

_and_publications/statistical_energy_review_2011/STAGING/local_assets/p

df/statistical_review_of_world_energy_full_report_2011.pdf

BP Statistical Review of World Energy June 2011, What’s inside?

Energy Information Administration (EIA), Short-Term Energy Outlook

http://www.eia.gov/steo/

Energy Information Administration (EIA), International Energy

Statistics

http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=5&pid=5&aid=2

Helman Christopher, Forbes Big Oil «The World's Biggest Oil

Companies» 07.09.2010 http://www.forbes.com/2010/07/09/worlds-

biggest-oil-companies-business-energy-big-oil_2.html

The Wall Street Journal, «Venezuela's Oil Reserves Top Saudi Arabia's,

OPEC Says, 18.06. 2011» (December 21, 2009), pp. 20-21, web site

www.ogj.com (subscription site).

Warren R. True and Leena Koottungal, "Global Capacity Growth Slows,

But Asian Refineries Bustle," OGJ, Dec 6, 2010. South Korea is home to

three of the ten largest crude oil refineries in the world – SK Energy's Ulnas

(No. 2), GS Caltex's Yeosu (No. 3) and S-Oil's Onsan (No. 7).

http://www.ogj-digital.com/ogj/20101206?pg=53#pg52

“Worldwide Look at Reserves and Production,” Oil& Gas Journal, Vol.

107, No. 47

24

“Worldwide Look at Reserves and Production,” Oil & Gas Journal,

Vol. 105, No. 48 (December 24, 2009), pp. 22-23.