This document summarizes Colin I. Welsh's presentation on the global energy outlook. It finds that (1) global oil demand is outstripping supply due to reservoir depletion and underinvestment, leaving little spare production capacity. (2) Unconventional resources and offshore fields will make up an increasing share of global supply. (3) $550 billion or more in annual E&P spending is needed to meet rising demand, but spending trends have lagged. Aberdeen is well-positioned to benefit from opportunities in the global energy industry.

1. A Global Economy – Have We Got The Energy?
AGCC Business Breakfast
Colin I. Welsh
7th December 2011

2. Simmons & Company International – Aberdeen
* Aggregate value of transactions in which Simmons Aberdeen acted as advisor since 1999.
Simmons & Company International Limited is authorised and regulated by the Financial Services Authority.
Page 2

3. Overview
 Oil Demand And Supply Outlook
 Spending Trends
 Conclusions
Page 3

4. Global Oil Demand Outstripping Supply
 Reservoir depletion is driving overall decline in production, impacted by recent underinvestment
90
Million bbl/d
80
70
60
50
40
Asia Pacific
30 Africa
Middle East
20
Europe & Eurasia
10 S. & Cent. America
North America
0
1985 1990 1995 2000 2005 2010
Source: BP Statistical Review 2011
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5. Demand Contractions Are Less Painful Over Time
 US & Chinese economy forecast to grow 2010-2012
Recessionary Periods
Y/Y Demand
Changes 1974 1975 1980 1981 1982 1983 1991 2001 2008 2009
Global, mb/d -812 -469 -2524 -1868 -1642 -221 152 699 -429 -1285
OECD -1704 -1047 -2951 -2113 -1861 -429 232 11 -1558 -2090
Non-OECD 892 579 428 244 219 207 -80 688 1129 805
Global, y/y change % -1.5% -0.9% -4.0% -3.1% -2.8% -0.4% 0.2% 0.9% -0.5% -1.5%
OECD -4.1% -2.6% -6.7% -5.2% -4.8% -1.2% 0.6% 0.0% 3.1% -4.3%
Non-OECD 6.2% 3.8% 2.2% 1.2% 1.1% 1.0% -0.3% 2.4% 3.1% 2.1%
Global % of total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
OECD 72.2% 70.9% 67.0% 65.6% 64.2% 63.7% 62.9% 62.3% 55.9% 54.3%
Non-OECD 27.8% 29.1% 33.0% 34.4% 35.8% 36.3% 37.1% 37.7% 44.1% 45.7%
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6. Spare Production Cushion Is Low Relative To History
100
Demand (Reference GDP growth)
Oil Supply / Demand (million bb/d)
Demand (moderate GDP growth)
Supply Capacity
95
90
85
2010 2011 2012 2013 2014 2015 2016
Sources: IEA (2011) Medium term oil and gas markets; Schlumberger (2011) CEO Energy Power Conference.
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7. Who Are We Relying On?
Libya
Nigeria 41% - 52%
Potentially
Unstable Iran
Countries
OPEC
Venezuela
Iraq
0 1 2 3 4 5
mb/d
Source: WEO 2010
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8. Growing Importance On Unconventional Resources
Canadian oil sands
Resource 173bn barrels of
Potential oil equivalent
Maturity Fully commercial
level
Russian heavy oil/ oil sands
Resource 47bn barrels of
Potential oil equivalent
Maturity Fully commercial
level
U.S. oil shale / shale gas
Resource 53.6 Tcf
Potential
Maturity Fully commercial
level
Eastern Europe shale gas
Jordan oil shale
Resource 92bn barrels of
Potential oil equivalent Resource 10bn barrels of
Potential oil equivalent
Maturity Prospect/
Coalbed Shale Maturity Discovered/
Oil Sands Heavy Oil Oil Shale level pending
Methane Gas level commercial
commerciality
Source: Simmons Analyst Research, EIA, RBC Richardson Barr , Spears and Associates
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9. An Increasing Share Of Oil Supply Will Come From Offshore Fields
Oil Production Outlook Global Deep Water Capex by Region
35 2011 35
Offshore Deep
30 Offshore Shallow 30
Expenditure ($ millions)
mmbbl Oil / day
25 25
20
20
15 15
10
10
5
5
0
2010 2011 2012 2013 2014
1966 1978 1990 2002 2014 2026
Africa Asia Australasia
Latin America North America Western Europe
Douglas Westwood 2010
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10. Oil Price Trend & Where We Are Heading
 Short-term fluctuations but still expected to tighten in the longer term
$/Barrel
180
Brent WTI
• Fuelled by rising global demand for
160 oil and strong underlying economy
140 High of : Brent $144.38
WTI $145.08
120
100
80
1999 – Current Brent Average: $60
60
1999 – 2007 Brent Average: $40 Low of: Brent $35.68
40
WTI $32.35
20 • Impacted by Lehman's collapse and resultant global recession
• Recovery delayed by consequences of Macondo
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: CapitalIQ – September 2011
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11. E&P Spending $550bn And Growing
 E&P investment level beyond $550 Bn/yr needed to meet demand
 Increasing complexity and intensity of future developments
600
2011 Estimate
500
400
E&P Spend ($Bn/yr)
300
200
100
0
Sources: IEA WEO (2010); Barclays Capital; Sanford C Bernstein; SBC Analysis; Schlumberger (2011) CEO Energy Power Conference.
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12. Aberdeen Ideally Placed To Benefit
 Exploit remaining reserves
 Subsea knowledge/capability valued by impending $bn global deepwater market
 As hub for operations outside Americas
 Emerging decommissioning market
 Fledgling renewables opportunity
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13. Finally...
“Give us the tools and we will finish the job.”
Winston Churchill
 Modern facilities (offices/industrial estates)
 Infrastructure (airports/roads/etc)
 Stable tax regime
 Enhanced facilities (health/entertainment/environment)
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