Global Overview of The Energy Industry

Global Overview of the Energy Industry
May 2022
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Contents
Introduction
Global overview
Leading companies
Global outlook
Country snapshots
Introduction
INTRODUCTION 55
Scope
Extraction of crude petroleum and natural gas The energy industry recovered in 2021,
USD2.5 trillion given the rapidly increasing crude oil and
natural gas prices, and lifting lockdown
Refined petroleum products measures. Reopening global economies
USD3.1 trillion allowed for increasing mobility and industrial
and commercial activities, stimulating demand
Mining of coal and lignite; extraction of peat for energy products. The year also brought
Energy (2021) USD609 billion increased focus on developing the industry’s
sustainability goals. The global demand for
USD6.4 trillion Coke oven products fossil fuels is set to continue expanding over
USD171 billion the medium-term outlook, driven by the
expanding economies in Asia Pacific.
Processing of nuclear fuel
USD43 billion
Mining of uranium and thorium ores

Disclaimer
USD5 billion
Much of the information in this briefing is of a
This report analyses the global energy industry, which includes the above core categories. statistical nature and, while every attempt has
been made to ensure accuracy and reliability,
Unless otherwise noted, all values expressed in this report are in US dollar terms, using y-o-y Euromonitor International cannot be held
exchange rates. responsible for omissions or errors.
Figures in tables and analyses are calculated
All forecast data are expressed in current terms. The historic period refers to 2016-2021; the from unrounded data and may not sum. Analyses
forecast period is 2022-2026 found in the briefings may not totally reflect the
companies’ opinions, reader discretion is advised.
INTRODUCTION 66
Examining four trends shaping the energy industry

Trends Expected long-term implications Medium-term Long-term
Digitalisation improves manufacturers’ operational costs, efficiency, workplace
Digitalisation and
safety and continuity of operations in case of large disruptions such as global
modernisation
pandemic in 2020.
As climate change and sustainability in manufacturing is an increasingly important
topic in global economies, large market players have to find ways to reduce their
Decarbonisation
emissions and adapt to the changing environment. Stricter environmental policies
efforts and
and emission goals are not only pushing oil, gas and coal producers to invest in
renewable focus
technological advances but also distribute their investments towards renewable
energy.
With rising global fossil fuel consumption, investment in new infrastructural

Focus on
channels and the upkeep of existing supply networks is essential in order to avoid
infrastructure
future backlogs.
Hydrogen is a growing topic in discussions on how to reduce emissions from energy

A shift towards consumption, and it could be produced from natural gas. Nevertheless, there’s a
hydrogen long way to scale production output to significantly affect the energy industry as it
is.
INTRODUCTION 77
Key trends impacting the industry in 2022

Recovering demand for fossil fuels as
Boosting energy prices Decarbonisation efforts gain pace
global economies continue to reopen
▪ After significant declines the year ▪ Strong economic growth during 2021, ▪ More than 70 countries, including
before, crude oil, natural gas and combined with colder winters and the largest polluters such as China,
refined petroleum prices recorded warmer summers boosted global the US and the EU, have set the
significant inflation over 2021, aided electricity demand, in turn supporting target to reach net-zero emissions by
by recovering global demand for growth for coal and natural gas. 2050. As a result, ‘green’ policies
energy products. The Russian ▪ Reopening economies, increasing have increased in number over
invasion of Ukraine further boosted vaccination rates and lifting mobility recent years, including The Green
energy prices in 2022, as the major restrictions also uplifted demand for New Deal in the US, Green
energy producer was faced with refined petroleum products. guidelines released in China in 2021
Western sanctions, creating ▪ As a result, global energy consumption and the EU’s Green Deal, approved
uncertainties in global supply for steadily increased over 2021 and is set in 2020.
crude oil and natural gas. to continue growing over 2022. ▪ As the countries are continuing the
▪ Meanwhile, OPEC’s decision to green course, pressure is building for
sustain slow crude oil production the companies operating in fossil
output growth over 2022 also adds fuel production and refining to invest
to the price inflation increase. in carbon capture and storage
technologies, as well as expand their
portfolios into renewable energy and
cleaner fuels in order to remain
operational over the long term.
Global overview
GLOBAL OVERVIEW 99
Energy industry recovers after the pandemic shocks

Global Production Value of Selected Industries, 2021 Global Production Value Growth, 2021-2026 Year to Exceed Pre-Pandemic Level
USD billion % CAGR
Construction and Real Estate 26,480 2020

Retail and Wholesale 16,509 2021
Business Services 11,965 2021
Government and Membership Organizations 11,434 2020
Transport and Storage 10,887 2021
Finance and Insurance 10,106
2020
Information and Communications 8,826
2020
Healthcare and Social Services 8,243
2020
Food, Beverages and Tobacco 8,217
2021
Metal Products 7,841
2021
Hi-tech Goods 7,212
2021
Energy 6,296
2022
Agriculture 6,166
2020
Utilities and Recycling 6,043
2021
Transport Equipment 6,007
2021
Education 4,561
2021
Chemical Products 4,422
2021
Hotels and Restaurants 4,218
2022
Machinery 4,147 2021
Non-metalic Mineral Products 3,268 2021
0 10,000 20,000 30,000 0% 2% 4% 6% 8% 10%
GLOBAL OVERVIEW 10
10
Production value to fully recover in 2022

GLOBAL SNAPSHOT After sizable setbacks the year prior, the energy industry has recorded a steep incline in
PRODUCTION VALUE production value in 2021, largely boosted by surging crude oil and natural gas prices and
recovering demand. The recovering fuel consumption was a result of vaccine rollouts,
6,296 29.3% opening economies, less strict lockdown measures and a pick-up in travel. The stimulus
USD bn, 2021 Growth, 2021
packages are also encouraging economic growth and in turn, energy consumption.
PROFITABILITY
The most sizable demand recovery is being driven by emerging markets and developing
28%* 1.1P.P. economies. Among fossil fuels, demand for natural gas is set on the steepest rise for the
% of Production, 2021 Increase in 2021 year.
COMPANY OPENINGS FULL RECOVERY IN Global Production Value Growth, 2016-2026
USD million, y-o-y growth
21.6K 2022 40.0%
in 2021
30.0%
Production Value by Region
& of Total Production, 2016-2026 20.0%
100%
Western Europe 10.0%
North America 0.0%
Middle East & Africa
Latin America
Eastern Europe -10.0%
-20.0%
Asia Pacific
-30.0%
2016 2021 2026
0%
2016 2021 2026 Note: *Based on data from 18 largest economies globally
GLOBAL OVERVIEW 11
11
China and the US continue to dominate global industry

Production in the global energy industry is Production Value in Top 20 Countries, 2021 Production Value Growth, 2016-2021
USD million % CAGR
highly concentrated, with the top 20
manufacturers accounting for 78% of global China 1,233,591
USA 827,969
production value in 2021.
Russia 465,926
China and the US remain the two largest Iran 305,499
energy producers in the world, together Saudi Arabia 288,764
accounting for more than a third of total Canada 197,874

India 178,796
global production. The two largest global
Brazil 170,771
economies benefit from major consumer Australia 124,457
markets and developed industrial sectors to South Korea 115,961
support fossil fuel demand. Indonesia 114,114
United Arab Emirates 112,290
Iran rose to fourth largest energy producer
Japan 110,915
globally in 2021 from fifth position the year Norway 104,657
before, benefiting from expanding production Mexico 101,647
capacities and rising foreign sales. While the Nigeria 100,214
country’s exports still remain pressured by Kuwait 97,716
sanctions imposed by the US, the country Egypt 96,018
managed to exploit rising demand in Asian UK 91,566
Iraq 80,624
markets.
0 500,000 1,000,000 1,500,000 -10% 0% 10% 20% 30%
GLOBAL OVERVIEW 12
12
Profit margins recover in light of rising demand and growing fossil fuel prices
Price dynamics in the global crude Profits
USD million 2016-2021
oil market is the key contributor to USA SAUDI ARABIA RUSSIA CHINA
the energy industry’s profits. 2020
2020 2020 2020
Global crude oil prices recovered to
2018
pre-pandemic levels mid-2021 and 2018 2018 2018
2016 2016 2016 2016

continued to grow into 2022. As a 0 100,000 200,000
0 200,000 400,000 0 100,000200,000300,000 0 100,000200,000300,000
result, profitability in the energy INDONESIA
CANADA AUSTRALIA MEXICO
sector rose globally in 2021, as
2020 2020 2020 2020
demand remained strong for the
2018 2018 2018 2018
higher-priced commodities.
2016 2016 2016 2016
Demand for energy continued to 0 50,000 100,000 0 50,000 100,000 0 20,000 40,000 60,000 0 20,00040,00060,00080,000
rise into 2022 as well, painting a UK INDIA BRAZIL JAPAN
positive outlook for producers’ 2020 2020 2020 2020
profits in spite of rising production
2018 2018 2018 2018
costs. Russia’s invasion of Ukraine
2016 2016 2016 2016
and subsequent oil and gas supply 0 20,000 40,000 60,000 0 20,000 40,000 0 10,000 20,000 30,000 0 5,000 10,000 15,000
concerns tightened global supply SOUTH KOREA TURKEY GERMANY WORLD
even further, allowing for higher
2020 2020 2020 2020
profitability margins for producers
2018 2018 2018 2018
filling the market gaps.
2016 2016 2016 2016
0 2,000 4,000 6,000 0 2,000 4,000 6,000 0 2,000 4,000 0 1,000,000
GLOBAL OVERVIEW 13
13
Exports on steep recovery with rising global demand for energy

Global energy exports recovered significantly in Global Exports Structure, 2021
2021, boosted by increasing consumption and
rising prices. Reopening industrial sectors and
commercial businesses increased global
demand for electricity and subsequently natural
gas, while recovering mobility boosted road fuel
and jet fuel demand.
Russia remained the largest energy exporter
globally, accounting for 13.6% of total exports in
2021. The country also recorded the steepest
growth in energy products’ foreign sales among
the top 10 exporters globally, benefiting from
steep demand growth for natural gas. China was
the main single buyer for Russian oil and gas,
however the majority of Russia’s exports went
to Europe during the year. After the invasion of
Ukraine in February 2022, the EU, however, is in
talks to significantly reduce oil and gas
purchases from Russia in 2022, leading to long-
term insecurities for Russia’s producers.
GLOBAL OVERVIEW 14
14
China and India to continue leading global energy imports growth

Global imports of energy products also Global Imports Structure, 2021
recorded significant growth during the year,
driven mostly by recovering demand in Asia
Pacific. In the region, China and India took
the lead in growth of energy imports, due to
the fast-paced economic growth and
expanding consumer markets.
The US became the second-largest importer
of energy products in 2021, down from first
position the year prior, as the country
continued to boost its domestic production
levels. According to U.S. Energy Information
Administration, the country produced about
18.66 million barrels per day of petroleum
and consumed about 19.78 million barrels
per day in 2021. Nevertheless, the country
still imported crude oil and petroleum
products to supply domestic demand and to
supply international markets.
GLOBAL OVERVIEW 15
15
Asia Pacific to remain the largest energy market in the World

The global energy market sustained growth Fastest Growing Energy Markets 2016-2021
over 2016-2021, further boosted by significant CAGR %
recovery trends during the second half of 35.0%
2021.
Asia Pacific remained the largest market for 30.0% Iran
fossil fuel energy as well as recorded the most
substantial growth as a region, thanks to 25.0%
increasing population, rising household
incomes and expanding industrial activities,
mainly in China, India and Japan. China 20.0%
recorded the largest market size growth
Ukraine
globally over 2016-2021 in absolute terms, 15.0%
leading the region thanks to fast-paced
economic growth and expanding industrial
Russia
activities. 10.0% Egypt
France
Taiwan Canada China
Meanwhile, the Middle East and Africa as well Malaysia South Korea
as Eastern Europe has recorded the highest 5.0% Turkey Saudi Arabia
Mexico India
Brazil
market growth rate over 2016-2021 among the Italy Japan USA
global regions, with Iran and Russia, Germany
0.0% United Kingdom
respectively, being the main growth drivers for 10,000 100,000 1,000,000
market expansion within the regions. Absolute Market Size Growth (USD million) 2016/2021
GLOBAL OVERVIEW 16
16
Rising fossil fuel prices are driving energy industry revenue growth
Commodity fuels’ prices were on a steady rise throughout 2021, outperforming the levels recorded in the pre-
pandemic 2019. The price inflation was a result of tight supply in the face of recovering demand, after COVID-
Energy Price Index
19-related refinery closures led to limited capacities to meet a sudden surge in fuel consumption, drilling
activities slowed down and investments stagnated.
Crude oil prices nearly doubled in 2021 in annual basis as the world faces significant supply and demand
imbalance. The rebounding consumption during the year caused product inventories to fall to multi-year lows
by the end of 2021, while the Organization of Petroleum Exporting Countries (OPEC) continued to limit its
Oil Price (Brent & WTI) production output, sustaining the elevated price levels.
Oil prices have seen a further rise over the first quarter of 2022, as Russia’s invasion of Ukraine caused
concerns for oil supply shortages and trade dislocations as sanctions are being imposed against the aggressor.
Natural gas prices were five times higher in Europe and doubled in the US in 2021 compared to the year
before as a result of supply concerns. Natural gas production slowed during the pandemic, leading to
Natural Gas (Europe & diminishing inventories, while global demand picked up over the year. The commodity’s price was further
US) boosted at the beginning of 2022, given the uncertainty in light of Russia’s, one the largest natural gas
producers in the world, invasion of Ukraine and subsequent sanctions imposed by Western countries on
Russian gas imports.
GLOBAL OVERVIEW 17
17
Energy prices set for decline in second half of 2022

Oil price (Brent & WTI), USD per Natural gas price, USD per
Energy prices index, 2016-2023
tonne, 2016-2023 million metric British thermal
Oil prices to remain above pre- unit, 2016-2023
Energy prices are forecast to
pandemic levels until the end of Sanctions against Russia to boost
peak in 2022
2023 prices in Europe
140 45
180
40
160 120
35
140
100 30
120
80 25
100
20
80 60
15
60 40
10
40
20 5
20
0 0
Jul 2019
Apr 2021
May 2018
Jun 2022
Nov 2021
Jan 2016
Mar 2017
Aug 2016
Dec 2018
Feb 2020
Sep 2020
Jan 2023
Aug 2023
Oct 2017
0
Jul 2022
Apr 2017
Jun 2018
Nov 2017
May 2021
Feb 2016
Sep 2016
Jan 2019
Mar 2020
Aug 2019
Dec 2021
Feb 2023
Sep 2023
Oct 2020
Jul 2022
Jun 2018
Apr 2017
Nov 2017
May 2021
Aug 2019
Dec 2021
Feb 2016
Sep 2016
Jan 2019
Mar 2020
Oct 2020
Feb 2023
Sep 2023
Brent WTI Europe Japan USA
Leading companies
LEADING COMPANIES 19
19
Chinese energy companies lead the global market

China Petroleum & Chemical Corp and Top 10 Companies by Production Value
PetroChina Co remained the two largest energy % of global production value, 2016-2021
2016 Rank 2021 Rank
companies in the world in 2021, benefiting 1. 4.9% China Petroleum
& Chemical Corp
from robust economic growth in China and the
Asian country’s major consumer market. 2. 4.1% PetroChina Co
Ltd
Royal Dutch Shell improved its competitive
position over 2016-2021, thanks to its 3. 3.1% Exxon Mobil Corp
expansion in shale oil production in North

America. However, the company is looking to 4. 2.9% Saudi Aramco
achieve net-zero emissions by 2050 and has

5. 2.0% Marathon
increased low-carbon investments over recent Petroleum Co LLC
years.
6. 1.7% Rosneft Oil Co
Rosneftegaz AOA improved its competitive OJSC
position over 2016-2021, as growing global 7. 1.2% National Iranian

Oil Co
demand for natural gas and inflating prices in
Europe in 2021 boosted the company’s sales. 8. 1.1% Rosneftegaz OAO
Overall, the largest companies are forecast to
9. 1.1% Royal Dutch Shell
experience significant revenue growth in the Plc
short term, benefiting from current commodity
price increases. 10. 1.0% Phillips 66 Co
20
Total number of companies on the rise with recovering demand

Total Number of Companies
Units 2016-2021
INDIA BRAZIL CHINA INDONESIA MEXICO
260,000 80,000 60,000 55,000 60,000
60,000
240,000 40,000 50,000 40,000
40,000
220,000 20,000 45,000 20,000
20,000
200,000 0 0 40,000 0
USA CANADA UK RUSSIA AUSTRALIA
40,000 24,000 11,500 10,000 2,800
30,000 22,000 11,000 2,750
10,500
20,000 20,000 5,000 2,700
10,000
10,000 18,000 9,500 2,650
0 16,000 9,000 0 2,600
TURKEY JAPAN SOUTH KOREA ITALY FRANCE
1,000 1,000 700 540 600
520
400
500 500 650 500
200
480
0 0 600 460 0
The total number of companies started to increase among the world’s main markets, as recovering global demand for energy in 2021 is
encouraging new drilling projects and refining capacity additions.
21
Industry concentration to increase with tightening environmental regulations

Concentration in the energy industry remained high in the Top Five Companies’ Production Value Share 2016-2021
majority of countries over the period 2016-2021. The growth in % of total production value
concentration was especially apparent during the start of the CHINA USA RUSSIA SAUDI ARABIA
100%
Hundreds
pandemic, as COVID-19 caused disruptions in energy
consumption leading companies to seek cost optimisation in 50%
order to sustain operations.
0%
Nevertheless, certain markets, such as Brazil, registered a
CANADA INDIA BRAZIL AUSTRALIA
downward trend in the top five companies’ share in 2021, as 100%
Hundreds
the country gradually opened its energy market, currently
dominated by a state-run company, to foreign investment. 50%
The high market concentration in such countries as Saudi 0%

Arabia, Russia, South Korea and Mexico is due to exploration
SOUTH KOREA INDONESIA JAPAN MEXICO
and production regulations, where the national corporations 100%
Hundreds
reserve the rights to carry operations regarding natural
50%
resources of the country.
Concentration in the global energy industry is likely to increase 0%
over the long term, as gradually expanding environmental UK
100% GERMANY ITALY WORLD
policies push for sizable investments in emissions control, such Hundreds
as carbon capture and storage systems, and lead to higher
50%
emissions taxes, in turn pressuring smaller producers’
profitability.
0%
Global outlook
GLOBAL OUTLOOK 23
23
China, the US and Brazil to drive future production value growth

As the world is emerging from the pandemic- Energy Production in Top 20 Countries 2021-2026
caused restrictions, the global energy industry CAGR %
is set for accelerated growth over 2021-2026. 12.0%
Elevated commodity prices, namely crude oil, Brazil
natural gas and refined petroleum products,
10.0%
will support the industry’s revenues return to USA
pre-pandemic levels in 2022. Canada
Egypt India
The US and China are set to drive absolute 8.0% Saudi Arabia
United Kingdom
production growth over the forecast period.
Iraq Norway
Both countries will derive the lion’s share of Indonesia
6.0% Kuwait
the growth from refined petroleum Mexico
production, as they compete for the largest South Korea
United Arab Emirates China
global refiner title.
4.0% Australia
Meanwhile, Brazil is set on the steepest
growth rate, benefiting from expanding drilling Japan
Nigeria
operations and set investment to increase 2.0%
productivity levels though maintenance and
upgrades in the country’s refineries.
0.0%
10,000 100,000 1,000,000
Absolute Production Value Growth (USD million) 2021/2026
GLOBAL OUTLOOK 24
24
Most major producers will have reached pre-pandemic production revenues by 2022-2023
Production Value Dynamics Index 2016-2026
2019=100
200 200 200 200 200
CHINA USA RUSSIA IRAN SAUDI ARABIA
150 150 150 150 150
100 2021 100 2022 100 2021 100 2020 100 2023
50 50 50 50 50
0 0 0 0 0
2016 2019 2026 2016 2019 2026 2016 2019 2026 2016 2019 2026 2016 2019 2026
200 200 200 200 200
CANADA INDIA BRAZIL AUSTRALIA SOUTH KOREA
150 150 150 150 150
100 2021 100 2022 100 2022 100 100 2021
2023
50 50 50 50 50
0 0 0 0 0
2016 2019 2026 2016 2019 2026 2016 2019 2026 2016 2019 2026 2016 2019 2026
200 200 200 200 200
INDONESIA UNITED ARAB JAPAN NORWAY MEXICO
150 150 150 150 150
EMIRATES
100 2023 100 2025 100 100 2021 100 2022
50 50 50 50 50
0 0 0 0 0
2016 2019 2026 2016 2019 2026 2016 2019 2026 2016 2019 2026 2016 2019 2026
200 200 200 200 200
NIGERIA KUWAIT EGYPT UK IRAQ
150 150 150 150 150
100 100 2022 100 2021 100 100
2021 2026
50 50 50 50 50
0 0 0 0 0
2016 2019 2026 2016 2019 2026 2016 2019 2026 2016 2019 2026 2016 2019 2026
Note: Line marks the year when the industry is forecast to reach pre-COVID-19 production value
GLOBAL OUTLOOK 25
25
Key future trends shaping the global industry

Digitalisation Decarbonisation efforts and renewables focus
Advances in technology can help companies to better prepare and Despite the world’s shift towards carbon-neutrality, demand for
allow the industry to respond effectively to market changes, make fossil fuels is set to continue to grow. As a result, global oil and gas
data-driven decisions, improve workplace safety, enhance efficiency companies are facing a challenge to meet the growth in demand
and reduce costs. Digitalisation in the energy industry is enabling while also reducing overall emissions. The EU aims to be climate-
remote operations and driving human-machine collaboration through neutral by 2050, China announced carbon-reduction goals to be
transformative strategies, process management and intelligent reached by 2030 and the US has pledged to achieve carbon
automation. For example, during the COVID-19 pandemic, remote neutrality by 2050. The growing attention towards emissions targets
monitoring and increased analytics have allowed businesses to save is to reshape oil and gas extraction, refining processes, as well as
costs in the face of low prices and reduced hiring by energy companies. continue phasing out the burning of coal.
A shift towards hydrogen Focus on infrastructure
The potential of hydrogen as a clean energy source is being More companies in the energy industry are directing investment
increasingly recognised globally. For example, Middle Eastern into their supply and logistics. The investment does not only cover
countries, such as Saudi Arabia, the UAE and Oman, are starting the network expansion, but also the upkeep of existing infrastructure.
shift, producing hydrogen from natural gas using carbon capture, As drilling capacities are set to expand with increasing demand, new
storage and utilisation. pipelines are integral in order to avoid backlogs in supply channels.
Nevertheless, storage and transportation remain major challenges for
hydrogen adaptation into the market, overall requiring sizable
investment in production and infrastructure.
Country snapshots
COUNTRY SNAPSHOTS 27
27
China: Industry reaches pre-pandemic turnover revenues in 2021

COUN T RY SN AP SHOT Energy Production Value in China 2016-2026
Turnover (USD million)
2,000,000 40.0%
30.0%
Y-o-y growth
1,500,000
20.0%
1,000,000 10.0%
0.0%
500,000
-10.0%
0 -20.0%
2016 2021 2026
PRODUCTION VALUE
1,233,591 4.9% Energy Industry in China 2021-2026
% CAGR
Energy Exports 2016-2021
USD million
USD mn, 2021 CAGR 2021-2026
8.0% 2021 45,621
Coke oven
MARKET SIZE 7.0% products 2020
Processing of Refined
1,648,031 8.0% 6.0% nuclear fuel Mining of coal
and lignite
petroleum
2019
2018
USD mn, 2021 CAGR 2016-2021 products
5.0% 2017
Mining of
2016 16,751
EXPORT VALUE 4.0% uranium and
thorium ores 0 10,000 20,000 30,000 40,000 50,000
45,621 22.2% 3.0% Extraction of
crude
USD mn, 2021 CAGR 2016-2021 2.0% Exports Share 2016/2021
petroleum and
1.0% natural gas 2021
STRENGTHS WEAKNESSES
0.0% 2016
Large consumer market Reliance on crude oil
0 100 200 300 400 500
imports 0% 20% 40% 60% 80% 100%
Production Value per Capita (USD) 2021 Export Domestic Sales
28
Lockdowns in 2022 to negatively affect energy market development

Zero-COVID policy to A largest-yet wave of COVID-19 cases at the beginning of 2022 and subsequent strict national zero-COVID
dampen demand policy is dragging both China’s economic growth prospects as well as the energy industry turnover forecast for
growth for refined the year. Restrictions on travel, strict lockdowns on affected cities and districts, and overall mobility
petroleum products in restrictions are hitting the market demand for gasoline and jet fuels.
2022
In 2021, China hit record coal mining output, and the increasing output trend has continued into 2022. The
Coal mining to continue country amped up coal mining in 2021 as a result of elevated natural gas prices, power supply shortages over
increasing in 2022, as the second half of the year, unofficial ban on importing Australian coal since November 2020 caused by
the government seeks political disputes and the campaign to ramp up coal production in preparation to the heating season. Even
ways to secure energy though receiving environmental criticism, the country continues to increase coal mining into the first quarter
supply of 2022, as the government is prioritising energy security in the light of geopolitical uncertainties in the
energy sector caused by Russia’s invasion of Ukraine.
Expanding EV fleet and Even though the country is currently amping up coal production in order to stabilise energy supply, the
renewable energy to renewable energy and technology adaptation is set to play an important role over the long-term outlook.
provide pressure for With rapidly rising sales of electric vehicles, which are set to represent nearly half of new passenger car
energy industry over registrations by 2027, as well as plans for new power plant additions to increasingly come from renewable
the long term energy, demand for coal and road fuels is set to feel the market pressure over the long term.
29
USA: Energy industry set for robust turnover increase

COUN T RY SN AP SHOT Energy Production Value in the US 2016-2026
1,400,000 40.0%
1,200,000 30.0%
Y-o-y growth
1,000,000 20.0%
800,000 10.0%
0.0%
600,000 -10.0%
400,000 -20.0%
200,000 -30.0%
0 -40.0%
2016 2021 2026
PRODUCTION VALUE
827,969 9.6% Energy Industry in the US 2021-2026
% CAGR
USD million
USD mn, 2021 CAGR 2021-2026
12.0% Extraction of 2021 198,803
MARKET SIZE crude 2020
10.0% Refined
1,117,172 2.7% Mining of
petroleum
and natural petroleum
2019
2018
USD mn, 2021 CAGR 2016-2021 8.0% uranium and gas products 2017
thorium ores 2016 116,451
EXPORT VALUE 6.0%
Processing of 0 100,000 200,000
198,803 11.3% 4.0% nuclear fuel
Coke oven
USD mn, 2021 CAGR 2016-2021 Mining of products Exports Share 2016/2021
2.0% coal and 2021
STRENGTHS WEAKNESSES lignite
0.0% 2016
Large shale reserves Tightening 0 500 1,000 1,500 2,000
Innovative refining sector environmental policies 0% 20% 40% 60% 80% 100%
30
Large domestic market demand to continue supporting industry revenues

Production value of refined petroleum products is set to record the steepest growth over the 2021-2026
period, as the industry recovers after fuel demand shocks during the pandemic. The domestic market
Domestic demand to bounced back from pandemic-induced shocks in 2020, with final consumption of oil products growing by 5.5%
rise for transportation- in volume terms in 2021. Demand for refined petroleum products increased at a faster pace compared to
related petroleum crude oil production, as the refinery closures during the pandemic led to lower refining capacities in 2021.
consumption According to the U.S. Energy Information Administration (EIA), the operable utilisation rate in the country’s
refineries stood at 86.6% in 2021, compared to 90.4% in 2019, however as demand for refined fuels rises, the
utilisation rate recovered to 88.7% in January 2022 and is likely to continue rising over the year.
In 2021, the country officially rejoined the Paris Agreement and the Biden administration announced new
greenhouse gas pollution targets for 2030, aiming to cut greenhouse gas pollution in half by the end of the
Investments in new
period (compared to 2005 level). The drop in upstream investment started during the pandemic, caused by
upstream projects on
the demand shocks, and the increasing importance of environmental cautiousness led to stagnating new
the decline
investments over 2021, as companies are being more cautious about tightening environmental regulations as
well as their image regarding carbon footprint.
According to the U.S. EIA, the country exported record amounts of liquified natural gas (LNG) in 2021,
US to further boost benefiting from increased demand in Europe and China as well as growing export capacities. Furthermore, the
LNG exports with Train 6 at the Sabine Pass LNG (0.76 billion cubic feet per day (bcf/d)) and Calcasieu Pass LNG (1.6 bcf/d)
sizable terminal export facilities are to be added into operation over the year, increasing the total nominal export capacity to
additions 11.4 bcf/d in 2022, compared to 9.5 bcf/d at the end of 2021, and making the US the largest LNG exporter
globally.
31
Russia: Strict trade sanctions to severely hit industry revenues in 2022

COUN T RY SN AP SHOT Energy Production Value in Russia 2016-2026
500,000 80.0%
Y-o-y growth
400,000 60.0%
40.0%
300,000
20.0%
200,000
0.0%
100,000 -20.0%
0 -40.0%
2016 2021 2026
PRODUCTION VALUE
465,926 -4.3% Energy Industry in Russia 2021-2026
% CAGR
USD million
USD mn, 2021 CAGR 2021-2026
0.0% 2021 306,646
MARKET SIZE -1.0% Extraction of 2020
325,068 10.8% -2.0%

Mining of Refined
crude
petroleum
2019
2018
USD mn, 2021 CAGR 2016-2021 -3.0% coal and petroleum and natural 2017
lignite Coke oven products gas 2016 165,565
EXPORT VALUE -4.0%
products 0 100,000 200,000 300,000 400,000
306,646 13.1% -5.0%
Processing of
USD mn, 2021 CAGR 2016-2021 -6.0% Exports Share 2016/2021
nuclear fuel Mining of uranium and
-7.0% 2021
STRENGTHS WEAKNESSES thorium ores
Vast natural gas reserves Strict sanctions imposed -8.0% 2016
0 500 1,000 1,500 2,000
by Western countries
after invasion of Ukraine 0% 20% 40% 60% 80% 100%
32
Invasion of Ukraine to reshape Russia’s export future

The energy industry in Russia registered a positive year in 2021, supported by rising production levels and
Boosting prices to
boosting prices for crude oil, natural gas and refinery products. There was a 3.4% increase in primary
assist oil and gas
production of crude oil and natural gas liquids output during the year, while crude oil (Europe Brent) spot
revenues with expected
price jumped by 69.1% and natural gas price in Europe skyrocketed by 403.1% on a year-on-year basis. While
reduced production
production output is likely to stagnate in 2022, continued growth in energy prices still allowed for significant
levels in 2022
growth in energy producers’ revenues over the first quarter of 2022.
The crude oil and natural gas sector is the backbone of the Russian economy, making up nearly half of the
country’s budget in 2021; the rapidly increasing fossil fuel prices and the regional demand recovery during the
Exports to plummet as year led to sizable revenue recovery for the industry, with energy production value at its highest over the 5-
European partners year historic period. Nevertheless, the industry is set to return to a steep decline for 2022, as a result of
prepare trade sanction Russia’s invasion of Ukraine and subsequent disruptions in regional demand for Russian oil and gas. EU
packages leaders have proposed to ban all oil imports from Russia into the economic bloc, as well as committed to
drastically reduce natural gas imports from Russia by the end of 2022. For example, even though Nord Stream
II pipeline was completed in 2021, the German government did not approve its certification as a response to
the invasion of Ukraine.
Russia has been focusing on the Arctic to expand oil and gas production, also offsetting the fluctuations in
output at existing and older production sites. Natural gas extraction in the Arctic already accounts for the
Shift towards Eastern lion’s share of the country’s natural gas production, and Russia is aiming to further exploit the region in order
markets to cater to Asian market demand. The recent trade disruptions with its main partner, the EU, further
incentivises the development of sea routes into Asia.
33
Iran: Industry vulnerable to global political landscape

COUN T RY SN AP SHOT Energy Production Value in Iran 2016-2026
350,000 80.0%
300,000
Y-o-y growth
60.0%
250,000
200,000 40.0%
150,000 20.0%
100,000
50,000 0.0%
0 -20.0%
2016 2021 2026
PRODUCTION VALUE
305,499 -4.8% Energy Industry in Iran 2021-2026
% CAGR
USD million
USD mn, 2021 CAGR 2021-2026
1.0% 2021 65,148
MARKET SIZE Coke oven products 2020
0.0%
287,863 30.1% -1.0%
2019
2018
USD mn, 2021 CAGR 2016-2021 -2.0% 2017
2016 53,781
EXPORT VALUE -3.0% Refined
petroleum 0 20,000 40,000 60,000 80,000
65,148 3.9% -4.0%
Extraction of products
USD mn, 2021 CAGR 2016-2021 -5.0% crude Exports Share 2016/2021
Mining of coal petroleum and
-6.0% 2021
STRENGTHS WEAKNESSES and lignite natural gas
-7.0% 2016
Large crude oil reserves OPEC+ output 0 500 1,000 1,500 2,000
limitations 0% 20% 40% 60% 80% 100%
34
Hope for future lifting of sanctions increases investment in production output
Iran amps up oil production in 2021 despite anti-Iranian sanctions remaining in place during the year.
Increasing oil output in Increased production was supported by new drilling well additions, repairs to older wells, and modernisation
2021 thanks to of oil reserve centres and facilities. According to OPEC, the country produced 2.4 million bpd (barrels per day)
expanding production in 2021, compared to 2.0 million bpd the year before, and the country is expected to continue increasing
capacities production and exports as the government is working to revive the Joint Comprehensive Plan of Action
(JCPOA), or Iran nuclear deal, in 2022.
With limitations of US sanctions in place, Iran managed to increase foreign trade flows by securing other
Exports to Asia stable export partners. In the spring of 2021, Iran has signed a 25-year bilateral trade and security
increase, however non- cooperation pact with China, which is expected to increase the Middle Eastern country’s exports to the highly
official trade harms attractive Asian market. Furthermore, Iran also exploits intermediaries to put its crude oil and natural gas on
profitability the global market, especially directed towards China. Nevertheless, non-official exports are less profitable, as
a large share of cash income is wasted on the export-import process.
Having one of the world’s largest natural gas reserves, Iran is likely to benefit from current global gas
shortages caused by political tensions with Russia. Currently, the country is not able to sell all the gas that it
Investments are vital to produces - lack of equipment to collect produced gas leaves the producers to increase flaring levels. The Oil
achieve natural gas Ministry estimates that USD5 billion investment is needed to curb the flaring of gas, while as much as USD80
output goals billion is needed to achieve its production targets. While international investment has declined significantly
after the US withdrawal from the nuclear deal in 2018, the talks to revive JCPOA are providing optimism for
future investment prospects.
35
Saudi Arabia: Resilient to COVID-19 shocks

COUN T RY SN AP SHOT Energy Production Value in Saudi Arabia 2016-2026
500,000 60.0%
Y-o-y growth
400,000 40.0%
20.0%
300,000
0.0%
200,000
-20.0%
100,000 -40.0%
0 -60.0%
2016 2021 2026
PRODUCTION VALUE
288,764 8.1% Energy Industry in Saudi Arabia 2021-2026
% CAGR
USD million
USD mn, 2021 CAGR 2021-2026
10.0% 2021 208,680
MARKET SIZE 9.0% 2020
Extraction of
96,208 5.1% 8.0%
7.0%
crude
2019
2018
USD mn, 2021 CAGR 2016-2021 Refined petroleum and 2017
6.0% Coke oven
petroleum natural gas
products 2016 142,882
EXPORT VALUE 5.0% products
4.0% Mining of coal 0 100,000 200,000 300,000
208,680 7.9% 3.0%
and lignite
USD mn, 2021 CAGR 2016-2021 2.0%
Exports Share 2016/2021
1.0% 2021
0.0% 2016
Large crude oil reserves 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
and modern technology 0% 20% 40% 60% 80% 100%
Production Value per Capita (USD) 2021
Export Domestic Sales
36
Saudi Arabia continues to invest in Asian market refining to secure future crude oil buyers
Saudi Arabia’s energy industry recorded a highly favourable year in 2021, boosted by increasing oil prices and
Aramco to continue stronger refining margins. Saudi Aramco, the largest crude oil and natural gas and refined petroleum producer
investing in expanding in the country, has reported more than doubling its net income in 2021 on a year-on-year basis, reaching
production, however USD110 billion. The company is also looking to further raise upstream capacities over the upcoming decade,
with an environmental namely to reach 13 million bpd of crude oil maximum sustainable capacity by 2027 and increase its gas
twist production by more than 50% by 2030. Nevertheless, the investments are also to be directed at expanding
the carbon capture and storage systems and renewable energy, as Aramco is targeting near-zero upstream
methane emissions by 2030.
The high economic dependency on oil export revenues are driving Saudi Arabia’s investment in refining plants
in key consumption markets with rising populations and economic growth, such as India and China. The
Saudi Aramco to country is looking to benefit from strong demand for crude oil in Asian giants by buying assets in established
increase its presence in projects, where the major producer would later feed its oil. To illustrate, in 2022 Saudi Arabia together with
Asian markets through joint venture partners have made a final investment decision to build a refinery and petrochemical project in
investments in refining Panjin City, Liaoing province, with capacity to receive 210,000 bpd of Aramco’s oil as feedstock by 2024.
Aramco also signed a memorandum of understanding with China’s Sinopec for potential collaboration in
downstream projects.
Saudi Arabia, together with OPEC, fails to sharply raise oil production output in 2022, in turn benefiting from
Volume output growth
rising oil and gas prices and boosting the energy industry’s profitability. Even though the bloc is under
modest over the first
pressure from other global giants, such as the US, to regulate demand by adding production volume, OPEC
quarter of 2022
maintained only modest monthly increases during the first quarter of the year.
37
Canada: Industry to continue on steep recovery path over the outlook period
COUN T RY SN AP SHOT Energy Production Value in Canada 2016-2026
350,000 60.0%
300,000
40.0%
Y-o-y growth
250,000
200,000 20.0%
150,000 0.0%
100,000
-20.0%
50,000
0 -40.0%
2016 2021 2026
PRODUCTION VALUE
197,874 8.9% Energy Industry in Canada 2021-2026
% CAGR
USD million
USD mn, 2021 CAGR 2021-2026
12.0% 2021 125,574
MARKET SIZE Refined 2020
10.0% petroleum 2019
161,183 6.5% products Extraction of 2018
USD mn, 2021 CAGR 2016-2021 8.0% crude 2017
petroleum and 2016 72,403
EXPORT VALUE 6.0% Mining of coal natural gas
and lignite 0 50,000 100,000 150,000
125,574 11.6% 4.0% Processing of
USD mn, 2021 CAGR 2016-2021 nuclear fuel Exports Share 2016/2021
Mining of
STRENGTHS WEAKNESSES 2.0% uranium and 2021
Coke oven
Proximity to US market Tightening products thorium ores
2016
environmental 0.0%
0 1,000 2,000 3,000 4,000
regulations 0% 20% 40% 60% 80% 100%
38
New pipeline projects to secure future export growth
In 2021, the energy industry benefited from favourable development of fossil fuel prices and recovering global
and domestic demand for fuels in light of loosening restrictions and vaccine rollouts. Canadian crude oil
production recovered to pre-pandemic levels by late 2020 and continued to increase over 2021. According to
Industry to benefit national statistics, volume output growth of oil and petroleum products in Canada increased by 6.1% in 2021
from further recovering on a yearly basis. Rising investments in the industry are also set to support revenue growth over the outlook
investments period. Higher prices allowed producers to drill new wells, plan to expand pipeline networks and invest in
advanced technology for their facilities. According to the Canadian Association of Petroleum Producers (CAPP)
forecasts, natural gas and oil investment is to further grow by 22% in 2022. The majority of investments are to
consist of conventional oil and gas capital, however growth in oil sands investment is to record a steeper 33%
increase over the year.
Canada is moving to transition its electricity sector towards net-zero emissions by 2050. As a result, new oil
Energy transition plans
and gas projects would have to integrate advanced technologies in emissions minimisation, such as carbon
to shape oil and gas
capture, use and storage, as well as switching to lower carbon fuels such as clean hydrogen and electricity to
development
power drilling operations.
While the anticipated Keystone XL pipeline project, planned since 2008 has been cancelled in 2021 due to
revoked permission by the Biden administration in the US, some pipeline projects have made progress during
Exports to continue
the year. Namely, The Enbridge Line 3 project completed in October 2021 is to add 370,000 bpd new capacity,
increasing with
with the pipeline currently reaching a capacity of 760,000 bpd and connecting Edmonton, Alberta, to
growing pipeline
Superior, Wisconsin. Meanwhile, construction of the Trans Mountain Expansion project carried into 2021,
capacities
aiming to increase current capacity by 300,000 bpd to reach 890,000 bpd, serving British Columbia, the US
and overseas markets when completed.
39
India: Industry set for consistent growth

COUN T RY SN AP SHOT Energy Production Value in India 2016-2026
300,000 30.0%
Y-o-y growth
250,000 20.0%
200,000 10.0%
150,000 0.0%
100,000 -10.0%
50,000 -20.0%
0 -30.0%
2016 2021 2026
PRODUCTION VALUE
178,796 8.3% Energy Industry in India 2021-2026
% CAGR
USD million
USD mn, 2021 CAGR 2021-2026
10.0% Processing of 2021 39,917
MARKET SIZE 9.0% Mining of nuclear fuel 2020
328,429 4.6% 8.0%

7.0%
uranium and
thorium ores
Refined
petroleum
2019
2018
USD mn, 2021 CAGR 2016-2021 products 2017
6.0% Extraction of crude
petroleum and natural 2016 25,572
EXPORT VALUE 5.0%
gas 0 20,000 40,000 60,000
4.0%
39,917 9.3% 3.0%
Coke oven
Mining of coal
USD mn, 2021 CAGR 2016-2021 2.0% and lignite Exports Share 2016/2021
products
1.0% 2021
0.0% 2016
Large consumer market and Crude oil import 0 20 40 60 80 100 120
steep economic growth dependence 0% 20% 40% 60% 80% 100%
40
Demand for refined petroleum to be supported by swift growth in road transport

Recovering industrial activity and easing lockdown conditions have allowed for higher refined petroleum
demand in India during 2021. According to the International Energy Association (IEA), India is the world’s third
India’s refined
largest energy-consuming country, the rise in energy consumption supported by rising incomes and improving
petroleum products
standards of living, and the country is also set for the largest increase in energy demand in the world by 2040.
consumption set for
Nevertheless, the ongoing political disruptions caused by Russia’s invasion of Ukraine dampen domestic
slower yet stable
demand growth over the short-term outlook. According to government forecasts, India’s consumption of
growth
petroleum products is set to rise by 4.6% in the year to March 2022 and another 5.5% in financial year 2022-
2023 in volume terms.
Investments in Over the long term, IEA projects that energy demand for road transport in India will more than double over
infrastructure to the next two decades and lead global demand for refined petroleum growth, largely thanks to diesel-based
stimulate road fuel freight transport additions. According to IEA, transport has recorded the fastest growth in India’s energy end-
consumption over the use and will benefit from expanding transport infrastructure as the country is set to build new highways,
long term railways, metro lines and airports.
In 2021, India’s government has announced plans to invest USD118 billion in the energy industry in order to
meet future fossil fuel needs deriving from projected economic growth. Out of the total amount, USD58
Government-led billion will be invested in oil and gas exploration and production by 2023 and USD60 billion will be directed
investment in energy towards expanding natural gas infrastructure through pipelines, import terminals and city gas distribution
industry to pick up networks by 2024.
41
Brazil: Industry remains resilient to COVID-19 shock

COUN T RY SN AP SHOT Energy Production Value in Brazil 2016-2026
350,000 30.0%
300,000
Y-o-y growth
20.0%
250,000 10.0%
200,000
0.0%
150,000
100,000 -10.0%
50,000 -20.0%
0 -30.0%
2016 2021 2026
PRODUCTION VALUE
170,771 11.0% Energy Industry in Brazil 2021-2026
% CAGR
USD million
USD mn, 2021 CAGR 2021-2026
14.0% 2021 33,333
MARKET SIZE 12.0% Extraction of 2020
Processing of Refined
240,584 3.7% 10.0%
8.0%
nuclear fuel
crude
petroleum and petroleum
products
2019
2018
USD mn, 2021 CAGR 2016-2021 natural gas 2017
6.0% Mining of
2016 13,893
4.0% uranium and
EXPORT VALUE
2.0% Coke oven thorium ores 0 10,000 20,000 30,000 40,000
33,333 19.1% 0.0%
products
USD mn, 2021 CAGR 2016-2021 -2.0%
Exports Share 2016/2021
Mining of coal
STRENGTHS WEAKNESSES -4.0% and lignite 2021
Vast pre-salt basins Financial burden of and -6.0% 2016
sizable exports funding expenditure 0 100 200 300 400 500 600 700
by debt 0% 20% 40% 60% 80% 100%
42
Brazil to amp up exploration and production

The National Agency of Petroleum, Natural Gas and Biofuels (ANP) estimates that Brazil’s natural gas output
increased by 5% in volume terms in 2021, reaching record levels during the year, however oil output was
Increasing exploration down by 1% during the same year as a result of lingering COVID-19-related disruptions. The operational
and production shutdowns and delayed lease auctions led to contracting oil production levels, however as vaccination rates
activities to stimulate increase and global economies are opening up in 2022, the outlook is optimistic. According to ANP, 17
industry’s growth offshore production units are scheduled to start operation by 2025, leading to 26% growth in oil and gas
production compared to August 2021 levels. The vast pre-salt reserves offer lower production costs and
emission rates, enticing foreign investors with higher profitability ratios.
According to Petrobras, the Brazilian state-owned oil company and the largest oil producer in the country, the
Refining output to
refinery utilisation rate reached 83% of capacity in 2021, the highest level during the 5-year historic period.
continue expanding
During the shutdowns, inspections and maintenance work took place at producers’ refineries, increasing
with sizable investment
productivity levels in the sector. Petrobras plans to further boost spending on refinery maintenance in 2022.
in maintenance and
The company is to spend USD460 million during the year, which is part of a broader investment plan released
upgrades
in November, where Petrobras is looking to direct USD6.1 billion into its refining sector.
Exports of energy products have supported the energy industry’s expansion in 2021, growing by 41% in value
Expanding exports to terms on a year-on-year basis. While the majority of the growth was a result of boosting crude oil prices, the
support energy country managed to also increase its crude oil and natural gas liquid foreign sales by 6% in 2021 in volume
industry’s growth terms. As Brazil is looking to significantly increase its crude oil production levels, and global demand for fossil
prospects fuels continues to recover after the pandemic shocks, export revenues are expected to play a major role in
the industry’s revenue growth over the forecast period.
43
Australia: Industry slow to recover

COUN T RY SN AP SHOT Energy Production Value in Australia 2016-2026
200,000 30.0%
Y-o-y growth
20.0%
150,000
10.0%
100,000 0.0%
-10.0%
50,000
-20.0%
0 -30.0%
2016 2021 2026
PRODUCTION VALUE
124,457 3.8% Energy Industry in Australia 2021-2026 Energy Exports 2016-2021
USD mn, 2021 CAGR 2021-2026 % CAGR USD million
4.5% 2021 72,786
MARKET SIZE 4.0% 2020
Mining of coal Extraction of
74,988 -1.3% 3.5%
Processing of
nuclear fuel Mining of and lignite crude
2019
2018
USD mn, 2021 CAGR 2016-2021 3.0% uranium and petroleum and
thorium ores natural gas 2017
2.5% 2016 60,307
EXPORT VALUE Coke oven
2.0% Refined 0 40,000 80,000
72,786 3.8% 1.5%
products
petroleum
USD mn, 2021 CAGR 2016-2021 products Exports Share 2016/2021
1.0%
STRENGTHS WEAKNESSES 0.5% 2021
Coal and LNG reserves Dependency on oil import 0.0%
0 500 1,000 1,500 2,000 2,500 2016
Proximity to trade centres Global coal phase-out
and major coal consumers 0% 20% 40% 60% 80% 100%
44
Uncertain coal future and shrinking refining dampens Australian energy industry prospects
Fuel refining in Australia is contracting, as two out of four closed production in 2021. After the announcement
The government in 2020, the largest Australian Kiwana refinery operated by BP is to be converted to an import-only terminal,
releases fuel security while Exxon Mobile also closed its Altona refinery to refocus the facilities to an import terminal. With fears of
package to ensure energy insecurity, the government had to look for ways to incentivise the remaining refineries to continue
energy security for operation. Namely, the government paid AUD12.45 million to Viva Energy Refining Pty in the first quarter of
refined petroleum 2021-2022 financial year to remain operational, however Ampol Refineries Pty will not receive any payment.
products Overall, the government is also providing up to AUD302 million in support of major refinery infrastructure
upgrades as part of the government’s fuel security package announced in the 2021-2022 budget.
Liquefied natural gas (LNG) extraction and exports are to continue driving the Australian energy industry’s
revenues. In 2021, LNG exports hit record highs, and according to Australia’s Department of Industry, Science,
Australia to remain Energy and Resources, the country accounts for 20% of global LNG exports. During the year, Royal Dutch
among global leaders in Shell’s USD12 billion Prelude LNG Barge was being restarted after being shut down for almost a year, with the
LNG exports capacity to produce 3.6 million tonnes/year of LNG, 1.3 million tonnes/year of condensate and 400,000
tonnes/year of LPG, further consolidating Australia’s leadership position in LNG production and exports.
Coal exports, one of the largest revenue generators in the Australian energy industry, are facing an uncertain
Uncertain future for future. Ultimately, demand is expected to decline, as the world switches away from coal-fired power.
coal Currently, the coal mining industry is receiving shrinking investments and depends highly on continued
demand from China.
45
South Korea: Industry remains resilient to COVID-19 shock

COUN T RY SN AP SHOT Energy Production Value in South Korea 2016-2026
160,000 50.0%
140,000 40.0%
Y-o-y growth
120,000 30.0%
100,000 20.0%
80,000 10.0%
60,000 0.0%
40,000 -10.0%
20,000 -20.0%
0 -30.0%
2016 2021 2026
PRODUCTION VALUE
115,961 5.3% Energy Industry in South Korea 2021-2026
% CAGR
USD million
USD mn, 2021 CAGR 2021-2026
6.0% 2021 51,265
MARKET SIZE 5.0% Refined 2020
4.0%
211,466 6.6% 3.0%
Extraction of crude
petroleum and natural gas
petroleum
products
2019
2018
USD mn, 2021 CAGR 2016-2021 2.0% 2017
1.0% 2016 26,292
EXPORT VALUE Mining of coal
0.0% 0 20,000 40,000 60,000
and lignite
51,265 14.3% -1.0%
-2.0%
Processing of
USD mn, 2021 CAGR 2016-2021 nuclear fuel Exports Share 2016/2021
-3.0% Coke oven
-4.0% 2021
STRENGTHS WEAKNESSES products
-5.0% 2016
Highly developed Dependency on oil 0 500 1,000 1,500 2,000 2,500
refining industry imports 0% 20% 40% 60% 80% 100%
46
Despite high prices, South Korea increases crude oil purchases to meet export demand
In 2021, South Korea has announced its Green New Deal, focusing on renewable energy, green infrastructure
and the industrial sector. Overall, the programme offers up to USD17 million in subsidies for electric cars in
2021 and up to USD33.5 million for hydrogen fuel cell EVs. With increasing green practices in electricity
Green new deal to production, industrial manufacturing and road transport, domestic demand for fossil fuels is likely to become
affect fossil fuel affected. Meanwhile, the large refiners in South Korea are also looking for ways to make their business more
consumption in the environmentally responsible. For example, SK Innovation, one of the major refined petroleum producers in
country the country, is aiming to increase eco-friendly business from 30% to 70% by 2025 and reduce its carbon
footprint. The company also plans to phase out its investments into mainstream oil refining, instead focusing
on petrochemicals production, anticipating the decline in road fuel such as diesel or petrol demand over the
long term.
The country has a well-developed export network, which provided a major boost to the industry’s revenue
growth in 2021. Global economic recovery and loosening lockdown measures allowed for increasing demand
for road fuels as well as boosted production prices. The main export partners in 2021 were Japan, the US and
Exports to drive growth Singapore. In 2022, global crude oil supply is tight, leading to elevated feedstock prices for Korean refineries,
however the country’s producers continue to increase crude oil purchases in order to tap into robust regional
refining margins and high export demand. According to Korea National Oil Corp, the state-owned oil company,
local refiners processed nearly 9% more crude oil in February 2022 on a year-on-year basis.
South Korean refiners are increasing investments in hydrogen, aiming to secure their place in the energy
New investments into market once the world turns to actively reducing fossil fuel consumption. SK Innovation announced that the
hydrogen company will be investing USD16.5 billion by 2025 into building hydrogen production facilities and charging
stations. The first production plant is expected to start operation in Incheon by 2023.
47
Definitions
Production: Total revenue (including export revenue) generated by all locally-registered companies, core activities of which fall under
industry definition range. Measured at basic prices/MSP. Also called Turnover or Turnover of Local Producers.
Market Size: Total value of industry-specific goods and/or services, whether produced domestically or imported, that are sold on a country’s
market. Measured at purchaser price/RSP.
Exports: Value of goods exported to foreign countries, including all production and other costs incurred up until the goods are placed on
board the international carrier for export, yet excluding international insurance and further transportation costs.
Imports: Value of goods delivered at the frontier of the importing country, including any freight, insurance and other costs incurred during
transportation of goods from the port of origin, yet before the payment of any import duties or other taxes within the country. Includes re-
exports.
Profits: Difference between Production and Total Costs (B2B Costs, Labour Costs, Taxes less Subsidies). Profits is measured in local currency
units and USD.
GLOBAL OVERVIEW OF THE ENERGY INDUSTRY
For Further Insight please contact
Dovilė Misiūnaitė
Senior Industrial Analyst
[email protected]
www.linkedin.com/in/dovile-misiunaite/
@dovilesmi
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Global Overview of The Energy Industry

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Global Overview of The Energy Industry

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Global Overview of the Energy Industry

Mining of uranium and thorium ores

Examining four trends shaping the energy industry

With rising global fossil fuel consumption, investment in new infrastructural

Hydrogen is a growing topic in discussions on how to reduce emissions from energy

Key trends impacting the industry in 2022

Energy industry recovers after the pandemic shocks

Construction and Real Estate 26,480 2020

Production value to fully recover in 2022

China and the US continue to dominate global industry

accounting for more than a third of total Canada 197,874

2016 2016 2016 2016

Exports on steep recovery with rising global demand for energy

China and India to continue leading global energy imports growth

Asia Pacific to remain the largest energy market in the World

Energy prices set for decline in second half of 2022

Brent WTI Europe Japan USA

Chinese energy companies lead the global market

expansion in shale oil production in North

achieve net-zero emissions by 2050 and has

position over 2016-2021, as growing global 7. 1.2% National Iranian

Total number of companies on the rise with recovering demand

Industry concentration to increase with tightening environmental regulations

The high market concentration in such countries as Saudi 0%

China, the US and Brazil to drive future production value growth

Key future trends shaping the global industry

China: Industry reaches pre-pandemic turnover revenues in 2021

Lockdowns in 2022 to negatively affect energy market development

USA: Energy industry set for robust turnover increase

Large domestic market demand to continue supporting industry revenues

Russia: Strict trade sanctions to severely hit industry revenues in 2022

325,068 10.8% -2.0%

Invasion of Ukraine to reshape Russia’s export future

Iran: Industry vulnerable to global political landscape

Hope for future lifting of sanctions increases investment in production output

Saudi Arabia: Resilient to COVID-19 shocks

New pipeline projects to secure future export growth

India: Industry set for consistent growth

328,429 4.6% 8.0%

Demand for refined petroleum to be supported by swift growth in road transport

Brazil: Industry remains resilient to COVID-19 shock

Brazil to amp up exploration and production

Australia: Industry slow to recover

South Korea: Industry remains resilient to COVID-19 shock

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