What does the future of oil look like beyond 2030

QUESTION

Simple Descriptive Analysis of Relevant Existing Data use only the simple descriptive and bivariateapproaches and present key findings using tablesand figures.

Updated Feb 09, 2020 Oil investments are expected to gradually recover but remain below the pre-COVID- 19 outlook. Development and maintenance capital expenditures in crude and condensate production, - Pre-COVID-19 outlook OPEC control $ billion -19% 309 + 285 291 273 -34% 234 194 183 2019 2020 2021 2022 2023 2024 2025 Source: Rystad Energy; Energy Insights by Mckinsey Mckinsey & CompanyBy 2040, exploration and production companies need to add 38 MMb/d of new crude production from unsanctioned projects. Global oil-supply growth 2020-40, NGL and other liquids2 Other OPEC Gulf Shale oil Oil sands Deepwater Shallow water MMb/d OPEC-control scenario 100.8 92.3 37.6 MMb/d 2.4 41.7 Crude and condensate = -37.1 79.3 76.5 2020 supply Decline Production 2040 starting OPEC Gulf Shale oil Oil sands Offshore Other 2040 supply stack to 20401 from production (including (excluding stack sanctioned production from OPEC Gulf) projects spare capacity Unsanctioned projects This decline is net of in-fill drilling and other work done to fields that are not classified as major projects. Other includes onshore conventional and heavy oil, all outside of OPEC Gulf. N - NGL stands for natural-gas liquids. Other liquids includes biofuels, processing gains, coal and gas to liquid, methyl Shale oil includes associated oil from unconventional gas wells. tert-butyl ether (MTBE), and inventory movements Note: Figures may not sum to 100%, because of rounding Mckinsey & Company 6 Source: Rystad Energy; Energy Insights by MckinseyUpdated Feb 09, 2020 New projects will be needed under an accelerated-energy-transition case, but a 1.5 C pathway will force shut-ins. Global liquid supply-and-demand outlook, - Reference demand Yet to find production INGLs and other liquids MMb/d - Accelerated-energy-transition demand Discovered pre-FID* production - 1.5'C pathway demand Post-FID production 110 100 90 80 38 MMb/d 70 21 MMb/d 60 50 -25 MMb/d 40 30 20 10 O 2015 2020 2025 2030 2035 2040 1 Final investment decision Source: Rystad Energy; Energy Insights by Mckinsey Mckinsey & Company 7Updated Feb 09, 2020 New projects will be needed under an accelerated-energy-transition case, but a 1.5 C pathway will force shut-ins. Global liquid supply-and-demand outlook, - Reference demand Yet to find production INGLs and other liquids MMb/d - Accelerated-energy-transition demand Discovered pre-FID* production - 1.5'C pathway demand Post-FID production 110 100 90 80 38 MMb/d 70 21 MMb/d 60 50 -25 MMb/d 40 30 20 10 O 2015 2020 2025 2030 2035 2040 1 Final investment decision Source: Rystad Energy; Energy Insights by Mckinsey Mckinsey & Company 7