Energy Perspectives 2016 Long-term macro and market outlook Press seminar, Oslo, 9 June 2016 Eirik Wærness, Senior vice president and Chief economist

Macro and market outlook to 2040 – www.statoil.com/energyperspectives

Energy Perspectives 2016

2

Significant uncertainty and large changes

3

… this calls for using scenarios

Supply and demand factors (indexed 2002=100)

Source: The Economist Source: DOE, CEIC, IEA, IRENA

0

2000

4000

6000

8000

10000

12000

0

200

400

600

800

1000

1200

1400

1600

2000 2003 2006 2009 2012 2015

US shale oil prod.

Chinese int.tourists

New Chinese cars

Chinese airpassengers

Solar capacity(rhs)

Several futures are possible...

2015-04-28 4 Classification: Internal

But the world is twice as rich, needs more energy, and is more efficient

World GDP growth rates %

0

1

2

3

4

'90-'00'00-'10 '10-'20 '20-'30 '30-'40

H Reform Renewal Rivalry

0

100

200

300

400

500

1990 2000 2010 2020 2030 2040

Reform Renewal Rivalry

World GDP and energy demand Index, 1990=100

2013 Renewal

Reform

Rivalry

Source: BigThink, IEA, Statoil (projections)

A strong trend affecting economics and energy

5

All growth in energy demand in emerging economies, in particular in Asia

World energy demand per region Bn toe

0

4

8

12

16

20

Ref Ren Riv Ref Ren Riv

Rest of world India China

OECD Pacific OECD Europe OECD Americas

2020 2040 2013

The global population centre is in Asia

Each small square represents 1 million people

Speeding up the change in global energy mix

6

… with Renewal displaying a paradigm shift

0%

20%

40%

60%

80%

100%

197

3

198

3

199

3

200

3

201

3

204

0 R

efo

rm

204

0 R

en

ew

al

204

0 R

ivalr

y

New RES

Biofuelsand waste

Hydro

Nuclear

Gas

Oil

Solid fuels0

5

10

15

20

197

3

198

3

199

3

200

3

201

3

204

0 R

efo

rm

204

0 R

en

ew

al

204

0 R

ivalr

y

Historical

Bn toe

CO2 emissions determined by demand and mix

7

Source: IEA (history), Statoil (projections)

Climate policies: Driving Renewal, contributing to Reform

Reform

450 Renewal

NP Rivalry

0

10

20

30

40

Statoil IEA

2040 2013

World CO2 emissions Billion tons

World CO2 emissions Billion tons

0

10

20

30

40

Ref Ren Riv

Rest of world India China

OECD Pacific OECD Europe OECD Americas

2040 2013

Technology shift for light duty vehicles

8

Light Duty Vehicle fleet composition

Billions

Source: IEA (history), Statoil (projections)

Sales Light Duty Vehicles

Millions

… in all scenarios, and a revolution in Renewal

Fuel mix in Final Energy Demand for LDVs

%

0

20

40

60

80

100

Ref Ren Riv

Electricity Biomass Gas Oil

2013 2040

0

20

40

60

80

100

120

140

Ref Ren Riv

Th

ou

sa

nd

s

Other Plug-in hybrids

Electric vehicles Diesel

Gasoline

2040 2013

0

1

2

3

Ref Ren Riv

Other Plug-in hybrids

Electric vehicles Diesel

Gasoline

2040 2013

Fuel mix change in electricity

9

Large investments in new renewables required, especially in Renewal

Solar and wind generation capacity GW

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Ref Ren Riv

Solar Wind

2040 2013

Electricity generation mix %

0

20

40

60

80

100

Ref Ren Riv

Geothermal Solar Wind

Biomass Hydro Nuclear

Gas Oil Coal

2040 2013

Oil and gas dominate in other sectors

10

… contributing to maintaining demand for fossil fuels

Fuel mix in Final Energy Demand for

Residential, Commercial & Industrial sectors %

Fuel mix in Final Energy Demand for Transport

excluding LDVs %

0

20

40

60

80

100

Ref Ren Riv

Electricity Biomass Gas Oil Coal

2013 2040

0

20

40

60

80

100

Ref Ren Riv

Heat Electricity New RES Biomass Gas Oil Coal

2013 2040

Source: IEA (WEO 2015), Statoil (projections)

Oil and gas are here to stay…

11

… for decades

Oil demand*, and supply from existing fields

Million barrels per day Gas demand, and supply from existing fields

Billion cubic meters

Assumming production from existing fields declining at 3-6% p.a.

Demand range

Decline range

Production

0

20

40

60

80

100

120

140

2015 2020 2030 2040

Demand range

Decline range

Production

0

1000

2000

3000

4000

5000

2015 2020 2030 2040Assumming production from existing fields declining at 3-6% p.a.

… which requires significant investments…

12

Source: IEA (history), Statoil (projections)

New oil production in 2040 Billion toe

0

1

2

3

4

5

Ref Ren Riv

Reform Renewal Rivalry

…in addition to investments in new renewables and electricity systems

0

1

2

3

4

5

Ref Ren Riv

Reform Renewal Rivalry

0

1

2

3

4

5

Ref Ren Riv

Reform Renewal Rivalry

New gas production in 2040 Billion toe

Incremental RES production 2015-40 Billion toe

56 mbd 2700 bcm

12 500 TWh

13