Asia's new markets boost world energy use

World Petroleum Products and Natural Gas Consumption, 1995 [100581 bytes]

Buoyed by soaring demand in Asia's emerging market economies, world primary energy consumption grew 1.8% in 1995 to 8.14 billion metric tons of oil equivalent.

That was double the average growth rate during the previous 5 years.

Primary energy demand in Asia's developing countries grew 5.7%, slightly lower than in the previous year, while European demand grew 2% in 1995 after having been in decline since 1990.

Those are among the findings of British Petroleum Co. plc, published in its 1996 BP Statistical Review of World Energy.

BP's latest assessment of the world energy market underscores a change in former Communist countries.

The former Soviet Union's consumption of energy fell by only 5.9% in 1995, compared with declines of more than 10% in each of the previous 2 years.

1995 also marked the end of 7 years of falling energy demand in Central and Eastern Europe. Growth in Hungary, Slovakia, and Romania offset small declines in Poland and the Czech republic.

Consumption volumes

World oil consumption grew by 1.2% in 1995 to 3.23 billion metric tons. China's oil use rose 5.3% last year, making it the world's third largest oil consumer after the U.S. and Japan, in that order.

World oil production increased 1.2% in 1995 to 3.23 billion metric tons.

Organization of Petroleum Exporting Countries members increased production 0.9% to 1.33 billion metric tons. Non-OPEC production, excluding the F.S.U., rose 2.3% to 1.57 billion tons.

Oil reserves rose marginally in 1995 to a total 138.3 billion metric tons, yielding an unchanged reserves/production ratio of 43 years.

Oil prices recovered from the low of 1994, rising 7.5% on the year to an average $17.18/bbl.

After a weak growth of only 0.4% in 1994, world gas consumption reverted to a long term trend last year with a 2.5% rise to 1.89 billion metric tons of oil equivalent.

World trends

BP Chief Executive John Browne provided a perspective on trends in world energy patterns reflected in the company's annual statistical report, published since 1953.

Browne said, "Oil demand is now 68 million b/d, nearly 10 million b/d higher than it was in 1985 and 13.5 million b/d higher than in 1975. Gas demand is up by 75% over 20 years worldwide, and by more than 71% in Europe.

"Ten years ago, Asia used 1 bbl in 6 of the world's consumption of oil. Now it uses 1 in 4. Demand in Central Europe is growing as well, after the decline in the early part of the 1990s.

"Of course, growth in demand is matched by an increase in supply. Thirty-one percent of that increase in 1995 was accounted for by OPEC states, the remainder by countries and companies outside OPEC."

Peter Davies, BP's chief economist, said oil continues to dominate the transport market and certain static sector markets, while gas is slowly gaining share at the expense of coal.

Davies pegged the world's oil reserves exceed 1 trillion bbl, of which the Middle East accounts for 660 billion bbl with a reserves/production ratio of 92 years.

Saudi Arabia alone has reserves of more than 260 billion bbl. In contrast, the Middle East accounts for less than 30% of world oil production. The F.S.U. has reserves of 57 billion bbl and the rest of non-OPEC nations a little more than 180 billion bbl.

The world continues to increase its reserves base, Davies said, with estimates of remaining reserves growing by 50% during the last 20 years. A 66% increase in estimated Middle East reserves has been the major factor behind addition of 1.77 bbl of oil for every barrel consumed.

"Nevertheless," Davies said, "non-OPEC as a whole has contributed to reserves growth and replacement despite the recent rapid growth of non-OPEC production.

"Since 1975, remaining non-OPEC reserves have increased by 31%. Despite production having grown by some three quarters, 6 bbl have been discovered for every 6 produced over the 20 years."

Davies pointed out that the U.S. and U.K. oil industries are in the midst of a decline.

U.S. reserves/production ratio stands at only 9.8 years.

U.K. oil reserves have declined by 73% as big fields were discovered, then developed and placed on production. U.K. production is currently at an all-time high, 2.755 million b/d in 1995, but the official reserves/production ratio has fallen to only 4.3 years.

Government figures place Britain's probable and possible reserves at 9 billion bbl, double the current proved remaining reserves. "It seems the U.K. sector, in aggregate, is approaching maturity," Davies said.

World gas reserves amount to 139.7 trillion cu m, equal to 87% of the total for oil reserves. With gas consumption equal to less than 60% of oil use, the reserves/production for gas is greater at 65 years. As with oil, gas reserves are concentrated in a few key countries. Russia dominates the gas reserves scene, with total remaining reserves of 48 trillion cu m.

Davies said, "In fact, for both oil and gas 63% of total reserves are held by the five largest producing countries. In the case of gas this is Russia, Iran, Qatar, U.A.E., and Saudi Arabia, as against Saudi Arabia, U.A.E., Iraq, Kuwait, and Iran for oil."