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W1S1 The Energy Scene MDP
W1S1 The Energy Scene MDP
W1S1 The Energy Scene MDP
In this first session, we will discover what we mean by energy and the importance of the energy sector in the
worlds economy. Then we will focus on the dominant resource, oil, and we will finish with a few words on
the different players involved in the oil industry.
What is energy?
The different uses of energy
Energy is everywhere in our lives and in every sector we have energy needs: in our homes, our means of
transport, our professional activities, our food and leisure.
To cover these needs we use heat, which represents 55% of the final energy consumption, gasoline, diesel
and jet fuels used in the transport sector account for 30% and electricity for 15%.
Do we have enough oil to cover our needs and for how long ?
This is a key question, not easy to answer. If we divide the reserves discovered by the current level of
production we have today 53 years of consumption ahead of us.
But oil reserves are, above all, a function of the price. As the price of oil rises, more reserves become
economically recoverable. Oil from the Middle-East and North Africa can be produced at the lowest cost. The
other resources are more expensive because of the geology, the technology or the logistics for example. And
as long as our society is ready to invest sufficiently, there is still plenty of oil or equivalent like GTL (Gas to
liquids) or CTL (Coal to liquids).
Moreover, oil is generally not produced where it is consumed. Indeed, Saudi Arabia, Russia and the United
States are the 3 main producers; but only the US is among the top 3 consumers, along with China and Japan.
Two thirds of the oil produced is therefore exported.
The main exporting regions are the Middle East, the Former Soviet Union, and West Africa. The main regions
relying on foreign imports for their oil supply are Europe, the United States that is reducing its imports with
the local development of unconventional production and China.
The players
Producing companies by categories
The oil industry is like a stage where there is interaction between various types of players: State-owned
National Oil Companies that own more than 2/3rds of the world reserves, Super majors (the 6 biggest
private actors in the oil industry) and other private oil companies, either midsize, independent or junior
companies. From one field to another, these players can be in competition or in partnership. But all of them
are driven by their hunt for oil, their performance and a serious concern for Health, Safety & Environment.