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World Oil Outlook

Start video at 26:04

https://www.c-span.org/video/?420074-1/opec-officials-hess-ceo-john-hess-discuss-global-oil-outlook

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>> THANK YOU. GOOD MORNING EVERYONE. IT'S A GREAT PLEASURE TO BE HERE PRESENTING TO YOU THE 2016 POSITION OF THE WORLD OUTLOOK TENTH EDITION

I'M ONE OF THE MAIN AUTHOR'S OF THE REPORT...

SO LET ME START BY SAYING THAT THE WORLD OUTLOOK PROVIDES ANALYSIS ON MANY ASPECTS, MANY ISSUES THAT ARE AFFECTING OUR INDUSTRY. HOWEVER, IN THIS PRESENTATION I WANT TO FOCUS ON FOUR MAIN QUESTIONS WHERE THE OUTLOOK SHEDS LIGHT.

• THE FIRST IS SOCIAL ECONOMIC OUTLOOK HOW IT WILL EVOLVE AFTER 2040.

• THEN WE FOCUS ON THE ENERGY OUTLOOK AND WE EXPLORE HOW WE WOULD EVOLVE INTO THE LONG-TERM.

• WE ALSO PROVIDE VERY GRADUAL ANALYSIS IN MATERIALS OF THE OIL MARKETS OUTLOOK UP TO 2040.

• AND FINALLY A NEW PIECE OF ANALYSIS IN THIS YEAR'S OUTLOOK IS HOW COULD FUTURE ENERGY POLICY CHANGES (eg, PARIS CLIMATE AGREEMENT) AFFECT THE ENERGY OUTLOOK.

AFTER THE PARIS CLIMATE AGREEMENT THERE'S STILL A LOT OF UNCERTAINTY ON HOW POLICY, ENERGY POLICIES WOULD HAVE EVOLVED IN THE FUTURE AND HOW THIS COULD AFFECT THE ENERGY OUTLOOK.

SO LET ME START WITH THIS SOCIAL ECONOMIC OUTLOOK UP TO 2040 AND THE OIL DEMAND EVOLUTION.

SO FOR MAIN DEMOGRAPHIC CHANGES IN THE WORLD WHEN WE LOOK INTO THE LONG-TERM. FIRST, THE WORLD POPULATION WILL GROW. CURRENTLY, WE ARE 7.3 BILLION PEOPLE AND UP TO 2040, WE WILL BE 9.1 BILLION. THAT'S AN ADDITION OF 1.8 BILLION PEOPLE AND WHAT I THINK IS MORE IMPORTANT IS THAT MOST OF THAT GROWTH WILL BE COMING FROM DEVELOPING COUNTRIES.

SECOND, SOCIO-DEMOGRAPHIC CHANGE THE AVERAGE GROWTH STARTED TO ACCELERATE... THE WORLD ADDED 800 MILLION PEOPLE DURING THE LAST DECADE.

THIRD, IMPORTANT OVERALL IS THE AGE. THE STRUCTURE OF THE POPULATION IS AGING AND GOOD EXAMPLE HERE THE POPULATION AGE 65 OR MORE CURRENTLY COMES FOR 8% OF THE WORLD IN 2040. THIS ACCOUNTS FOR 18% OF THE POPULATION.

AND FINALLY, MORE SOCIO-DEMOGRAPHIC CHANGE IS THAT THE WORLD IS COMING TO TOWN. THE PROCESS CONTINUES, CURRENTLY 54% OF THE PEOPLE ARE LIVING IN URBAN AREAS. INTO THE FUTURE 2040 WE'RE EXPECTING THESE NUMBER WILL INCREASE TO 63%.

THE NUMBERS ARE GETTING LARGER AND NUMBER OF MEGA CITY WHICH ARE CITIES WITH MORE THAN 10 MILLION PEOPLE WILL INCREASE FROM 29 TO MORE THAN 40 MEGA CITIES IN THE WORLD.

THIS OF COURSE IS FOR IMPORTANT QUESTION FOR POLICYMAKERS IN THE CITIES. BUT WILL ALSO BE IMPORTANT CHANGE FROM AN ECONOMIC POINT OF VIEW AND KEY TAKE AWAY HERE IS THAT THE GLOBAL ECONOMIC PICTURE WILL RESHUFFLE.

THE WORLD GDP DOUBLES BETWEEN 2015 AND 2040 AND WHAT IS EVEN MORE IMPORTANT IS THAT WHERE GROWTH IS COMING FROM. IN FACT, THREE QUARTERS OF THE ADDITIONAL GDP BETWEEN 2015 AND 2040 WILL COME FROM THE DEVELOPING COUNTRIES. AND HERE, WE CANNOT OVEREMPHASIZE THE IMPORTANCE OF CHINA AND INDIA TOGETHER. THEY CURRENTLY COUNT FOR 24% OF THE WORLD GDP. IN 2040 THEIR SHARE COMBINED -- 40% OR SO OF THE WORLD GDP IN 2040 WILL BE CHINA AND INDIA.

ALSO WE WANT TO EMPHASIZE THE FACT THAT AVERAGE INCOME LEVEL IN THE WORLD WILL INCREASE AND ALLOW MILLIONS OF PEOPLE TO EXIT POVERTY AND JOIN THE MIDDLE-CLASS.

.... THE KEY TAKE AWAY HERE IS THAT ENERGY DEMAND WILL INCREASE BY 40% BETWEEN 2014 AND 2040.

https://en.m.wikipedia.org/wiki/List_of_countries_by_oil_consumption

http://www.opec.org/opec_web/static_files_project/media/downloads/publications/ASB2015.pdf

• In 2014, world crude oil production averaged at 73.4 million barrels/day, increasing by 0.7 per cent, over 2013

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https://en.wikipedia.org/wiki/List_of_countries_by_oil_production