BP Statistical Review of World Energy 2006 is out

2005 was the third consecutive year of rising energy prices…
These increases, along with growing public concern about energy security and climate change, kept our industry in the headlines throughout the year.

This Review – the 55th in the series – presents the facts behind those headlines.
Although real oil prices remained below the peak of the early 1980s, 2005 saw the annual average price measured in nominal terms for a barrel of Brent crude oil exceed $50 a barrel for the first time, with an increase of more than 40% over the 2004 figure. Natural gas prices also rose around the world, with nominal average prices in the USA and UK exceeding $6 per million Btu for the first time.

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Although energy prices have increased, there has been no physical shortage of either oil or gas. The market has worked effectively in maintaining supplies, even after the dramatic and disruptive effects of the hurricanes that hit the US Gulf Coast in the summer – albeit at higher prices.

Concern about energy security nonetheless is widespread. Capacity in most segments of the energy industry remains constrained and perceptions of geopolitical risk have increased. Non-OPEC crude oil production stagnated last year as a result of slower Russian production growth, production declines in mature provinces and hurricane-related losses. Carbon emissions continued to increase, along with energy consumption.

There have been positive developments in energy markets during the past year. So far, the international economy has proved surprisingly resilient to higher energy prices and continued to grow. While access to energy resources is an area of continuing uncertainty, global proved reserves of oil and gas have continued to increase. The European Union’s Emissions Trading Scheme has provided carbon prices via an organized international market for the first time.
In this challenging environment, good information is essential. This Review provides timely and unbiased data on which the necessary decisions facing policy-makers and businesses around the world can be taken.

I would like to thank all those across the world whose co-operation and support make this publication possible. I hope you will find the Review of interest and value.

The Lord Browne of Madingley
Group Chief Executive
June 2006