NESF head Simonov delivers report at London conference

Rebalancing the World Energy Markets: The role of China, Russia and Central Asia

Thursday 29 and Friday 30 November 2012

Although China is the world’s fifth largest oil producer, its rapidly rising domestic demand for energy far overreaches supply. By some measures, China is the world’s largest consumer of energy and accounts for half of the world’s growth in oil demand. Half of China’s crude oil imports come from the Middle East but the recent regional upheavals, domestic energy consumption and demographic and budgetary pressures to generate economic growth will have a significant effect on China’s energy security.

China, Russia and Central Asia have a mutual interest in securing the necessary investment in their hydrocarbon industry to maintain and advance production. Russia possesses the world’s largest natural gas reserves and the eighth largest oil reserves. It is also the world’s second largest oil exporter and the biggest supplier of gas to Europe.

To hedge its exposure to disruptions in energy supplies, China has constructed its domestic trunk oil and gas pipelines since the early 2000s and the country is set to have at least 3-4 very large scale & long distance trunk gas pipelines by 2017-2018.

· Is China’s rapidly rising domestic energy consumption affecting global oil and gas supplies?

· How will internal and external energy demand affect China’s investment decisions?

· Will international oil companies be able to make significant investments in China’s expanding energy sector?

· What role for Gazprom in the context of the ‘Shale Gas Revolution’ and China’s alternative gas sources?

· What are the short- and medium-term plans for investment in production expansion in Russia, Central Asia and China?

This conference will study the interplay of factors shaping the world’s energy markets and the role of China, Russia and Central Asia. It will examine China, Russia and Central Asia’s demand drivers, impact of non-conventional energy sources and objective factors regarding the accessibility and cost of developing new fields. The conference will provide a unique platform for policy makers, governments, commentators and key industry figures to assess the current situation and ask what lies ahead. Questions surrounding the domestic political context and business environment in which investments are likely to be made will be central to the conference debates.

DAY ONE

Thursday 29 November 2012

09.30

· Will China’s strategic oil reserves expand even further?

· Is now the time to support a rapid reform of the government’s energy bureaucracy?

· How can oil imports from Russia and Central Asian republics be increased?

· Will China’s gas demand and resources see a rapid increase of pipeline gas and LNG imports or a new era of shale gas and coal-bed methane?

· What is China’s attitude towards oil and gas imports?

· How do the International Energy Agency, IOCs and EU view China’s oil and gas industry expansion?

· What importance does China place on gas and oil supply from Russia? And what importance does Russia give to providing China’s energy needs?

· What factors are shaping Russia's energy policy in its immediate neighbourhood?

· How will shale gas and LNG affect Russia’s share of global energy market? Are Russian expectations about future oil and gas prices realistic?

· What is required to maintain and modernize key Russian energy infrastructure?

· What are the challenges to the Eastern Siberia–Pacific Ocean pipeline route and the spur line to China?

· Sino-Russian M&A deals and strategic partnership: successes and failures

· What are the implications of the failure of the 2011 Sino-Russian gas price deal?

· What is the fundamental difference between Sino-Russian gas cooperation and Sino-Russian oil cooperation?

· What are the chances of Sino-Russian gas cooperation given China’s shale gas factor?

· What impact will LNG exports from the US, East Africa and Australia have?

· How significant can Russia’s role in LNG supply to Asia, via the Arctic Sea lane, be?

13.00 – 14.00 Lunch

• What role are the EU, China and other external actors playing in the Central Asian republics’ national energy strategies?
• What are the implications for European gas supplies of the expanding Turkmen gas sales to China?
• Sino-Kazakh oil pipeline
• What impact will the trans-Asia natural gas supply pipeline have on Russia’s Altai gas supply to west China?

• Why is the Central Asian energy sector giving highest priority to Chinese investment?
• What are the economic challenges to increasing the scale of oil and gas imports using large diameter & long distance pipelines?

17.30 End of Day One and Reception

DAY TWO

Friday 30 November 2012

09.30

· Why is the string of gas discoveries in East Africa important for Asian LNG consumers?

· Will Japan’s expansion of LNG supply compete with China’s LNG expansion scheme or will Asian LNG importers find a way to cooperate? How feasible is such a scenario?

· How will Russia’s ambition to be a major LNG trader affect global gas trading trends?

· What will be the regional and global consequences of Sino-Russian oil and gas cooperation?

· How will the Eastern Siberia–Pacific Ocean pipeline development affect Asian premium?

· What effect will China’s rapid gas expansion have on global gas trading in the coming decade?

· How will the US shale gas revolution affect Sino-Russian gas co-operation?

13.00 End of conference and lunch