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INDUSTRY OVERVIEW
The information in the following section has been provided for background purposes. The information has been
extracted from a variety of sources released by public and private organisations. The primary sources for information in
this section are the EIA, the OGJ, the IEA, the BP Statistical Review and the Outlook for Energy.
The Issuer confirms that the information in this section has been accurately reproduced from these sources and, as far as
the Issuer is aware and is able to ascertain from information published by these sources, no facts have been omitted
which would render the reproduced information inaccurate or misleading. Industry publications, surveys and forecasts
generally state that the information contained therein has been obtained from sources believed to be reliable, but that
the accuracy and completeness of such information is not guaranteed. The Issuer believes that these industry
publications, surveys and forecasts are reliable but the Issuer has not independently verified them and cannot guarantee
their accuracy or completeness.
The projections and forward-looking statements in this section are not guarantees of future performance and actual
events and circumstances could differ materially from current expectations. Numerous factors could cause or contribute
to such differences. See “Risk factors” and “Forward-looking statements.”
Oil and Gas Sector
The global economy and oil and gas consumption
The availability of affordable energy is vital to all sectors of the global economy, particularly transport, industrial
production, electricity generation and heating. Global demand for energy is linked to movements in GDP and
accordingly fluctuates with the economic cycle.
Crude oil prices were relatively stable in 2013 despite significant production disruptions in the Middle East and North
Africa as higher US production and seasonally elevated Saudi Arabian production offset outages elsewhere. The North
Sea Brent crude oil spot price averaged $109 per barrel, down 3% from 2012. Brent prices came under downward
pressure as rising US light sweet crude oil production reduced the need for US imports, thereby increasing supplies of
Brent-quality crude oil available on the global market. (Source: US Department of Energy, Energy Information
Administration, January 2014).
Global demand neared a milestone in 2013 when total liquid fuels consumption by countries outside the Organization for
Economic Cooperation and Development (OECD) nearly surpassed that of OECD member countries for the first time.
OECD members’ demand grew slightly in 2013, reversing the downward trend in six out of the previous seven years.
During the same time, non-OECD demand rose by 1.1 million barrels per day (“
bbld
”). China accounted for nearly a
third of global demand growth and surpassed the United States to become the world’s largest importer of crude oil.
(Source: US Department of Energy, Energy Information Administration, January 2014).
According to the BP Statistical Review, total liquid fuels production by members of the Organization of Petroleum
Exporting Countries (“
OPEC
”) fell by 0.6 million bbld, or 1.8%, in 2013 primarily due to increased outages in Libya,
Nigeria and Iraq. Non-OPEC liquid fuels production, concentrated in the United States, grew by more than 1.3 million
bbld, or 8.7%, in 2013, more than offsetting the decline in OPEC production. Unplanned supply disruptions in 2013
averaged 2.6 million bbld, 0.7 million bbld higher than in 2012 and of which OPEC countries had the largest outages at
1.8 million bbld. Crude oil production in the United States increased 1.0 million bbld in 2013, marking the fifth
consecutive year of increase and the highest recorded increase in US history, and rising more than the combined
increases in the rest of the world. US crude oil production reached its highest level in 24 years. The largest production
growth outside of North America occurred in UAE, which added 0.2 bbld and Russia, which added 0.1 million bbld.
From 2008 through 2013, global consumption of petroleum products excluding the United States increased 5.8 million
bbld, or 8.7%, during a period when US petroleum product consumption was generally declining. Since 2008, exports of
petroleum products from the United States have increased 1.7 million bbld, supplying about 25% of the growth in
petroleum product demand outside of the United States.
The following is a graph showing historic Brent and West Texas Intermediate oil prices and forward curves, in US
dollars per barrel.
