Norio EHARA Head, Non-Member Countries Division International - - PowerPoint PPT Presentation

INTERNATIONAL ENERGY AGENCY AGENCE INTERNATIONALE DE L’ENERGIE

SESSION 3

IEA/ASEAN/ASCOPE Workshop “Oil Supply Disruption Management Issues”

Cambodia, 6 April 2004

Norio EHARA

Head, Non-Member Countries Division

International Energy Agency International Energy Agency

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Increase in Primary Oil Demand by Increase in Primary Oil Demand by Region, 2000 Region, 2000-

• 2030

2030 (b/d)

1 2 3 4 5 6 7 8 9 1 0 OECD N.America China East Asia Latin America South Asia Middle East Africa Transition economies OECD Europe OECD Pacific mb/d 0 .0 0 .5 1 .0 1 .5 2 .0 2 .5 3 .0 3 .5 4 .0 per cent In c re a s e in o il d e m a n d A v e ra g e a n n u a l g ro wth ra te (rig h t h a n d a x is )

• Two-thirds of oil demand increase over the next three decades will take place in

Non-OECD regions (29mb/d in the 45mb/d increase during 2000-2030).

• Developing Asia will take the largest share (China: 7mb/d from 5 mb/d to 12 mb/d).

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Oil Supply Security and Emergency Preparedness Asia’s Increasing Oil Import Dependency (%)

1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 0 1 0 0 O E C D P a cific O E C D E uro p e O E C D N.A m e rica S o uth A sia C hina E a st A sia net imports as per cent of oil supply 2 0 0 0 2 0 1 0 2 0 3 0

34% 60% 82% 65% 83% 94% 30% 61% 74%

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Global Oil Stocks (August-2003)

OECD Commercial 45% OECD Strategic 21% Non-OECD Commercial 18% At sea/In transit 16%

Total World Oil Stocks: 6.0 billion barrels*

(170 mil. Tons)

China + India = 10 million tons => 6% among OECD strategic stocks

*Excludes ex-USSR, China and South African strategic stocks.

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IEA’s Collaboration with NMCs

Consumer-Producer dialogue by IEF + Energy Experts Meetings IEA Ministerial encouragement in April 2003 Russia: Joint Declaration of Co-operation in 1994 China: Memorandum of Policy Understandings in 1996 India: The Declaration of Co-operation in 1998 ASEAN: Framework for Co-operation between the ASEAN Centre for Energy (ACE) in 2002

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China

The largest oil consumer and importer outside OECD Decrease domestic oil production Rapid increase of oil imports and dependency on ME and Russia Price volatility and burden on the national economy:

10% price up 0.7% GDP down

Market liberalisation & possible decrease of commercial stocks Strong concerns on Oil Security & decision for establishing strategic

• il stocks by General People’s

Congress in March 2001. IEA/China Joint Workshop in Paris in April 2001 and in Beijing in December 2002. Hotline was tested in Spring 2003.

100 200 300 400 500 600 700

2000 2010 2020 2030 Domestic Supply Net import

Domestic Production and Import Dependency

34% 60% 73% 82% Mtoe

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Current Plan

(Industry Proposal) System

: Government stocks and supplemented by compulsory industry stocks. National stocks as the last resort

Stock Level

: 2005:

• Gov. 4 mil tons: 14 days of crude import
• Ind. 6 mil tons: 21 days

2010:

• Gov. 8 mil tons: 22 days of domestic cons.
• Ind. 11 mil tons: 28 days

Quality

: Crude oil for gov. and crude & products for ind.

Location

: 4 sites in coastal regions were reportedly identified

Legal Issues

: to be established

Management

: Energy Bureau and final decision by State Council

Time table

: 1st stage by 2005 (current 5YP)

Financing

: Bank loans? Companies’ responsibility for industry stocks? Ready to collaborate with the international community

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Proposed Locations of Strategic Oil Reserves in China

Zhejiang Islands: 4 mil. tons KNOC:8 mil. tons JNOC:88 mil tons

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India

Growing oil demand:3.3% pa. 2000-2030 Decrease domestic oil production Rapid increase of oil imports and dependency on ME Price volatility and burden on the national economy Regional geopolitical uncertainty Market liberalisation & possible decrease of commercial stocks:

60 days of consumption

Strong concerns on Oil Security and decision for establishing strategic oil stocks by PM in Feb. 2003

50 100 150 200 250 300

1990 2000 2010 2030 Domestic Supply Net import

Domestic Production and Import Dependency

40% 65% 83% 94% Mtoe

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Current and Future Plan

Stock Level

: 15 days of consumption = 5 mil. tons progressively increased to 45 days

Quality

: crude oil to start with

Location

: 1 site on West coast and 1 on East

System

: underground storage

Legal Issues

: to be established shortly

Management : 100 % state-owned new entity to be

established

Time table

: depending on the settlement of financing issue

Financing

: Oil tax?

IEA/India Joint Workshop on Emergency Stocks in Jan. 2004 in New Delhi.

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Proposed Locations for Strategic Oil Reserves

Mangalore: Underground rock cavern – 1.5 MMT + 2.5 MMT Vizag: Underground rock cavern – 1.0 MMT

Mangalore Vizag

Phase I

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IEA Collaboration with NMCs

IEA Ministerial encouragement Activities:

Stocks and oil security workshops

China in 2001 and 2002 India in 2004 ASEAN in 2003 and 2004

Hotlines: agreed with China and India Simulation exercise (2002, 2004…)

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The Approach: Learned Lessons by IEA’s Outreach Activities in Key NMCs

Approaches:

Step by step approach for long term co-operation Timely and attentive input to their needs Policy input and sharing experiences at the initial stage

• f planning

China and India would make a great impact on the global

• il security and maybe good models for others

Co-operation with key NMCs for global emergency systems: Global issue need global approach

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Step Forward

Step Forward:

Continue to contribute to key NMCs and involve in

the IEA events : Simulation Exercise in 2004 in Paris

More Hotlines? Data collaboration: JODI and IEA training course? Encourage to establish NESO-type org. in NMCs

Issues to be considered before going ahead:

Co-ordinated actions with key NMCs: on what and to

what extent?

Beyond China, ASEAN and India?

ASEAN +3, APEC?

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Thank you