Ayman Asfari, Group Chief Executive 1: Introduction and strategy update
Agenda 1. Introduction and strategy update Ayman Asfari 2. Building and sustaining a world-class onshore EPC business Marwan Chedid 3. Delivering Integrated Energy Services Andy Inglis 4. Growing and enhancing our offshore EPC…
What we do Service company with a clear focus on the oil and gas sector Growing our capabilities across the value chain to expand our business and better meet the needs of our customers Striving for differentiation built on core…
Delivering differentiated performance Group Performance 2012 Net income margin (%) Net income / employee (USk) ROCE (%) Source: Company filings and Factset 6
Background to Interim Management Statement Onshore Engineering & Construction (USbillion) 8 Order intake Revenue expectation (2011) 7 6 5 4 3 2 1 0 2009 2010 2011 2012 2013 2014 2015 In 2011, based on the market, we expected…
Long-term market fundamentals are robust Industry upstream spend (USbillion per annum) Market Upstream market Capex US700bn and US500bn Opex annually Long term growth 5% based on: demand growth (1-2% pa) production decline (4-5%…
The industry challenge Returns for IOCs squeezed Industry Capex performance 80% % of projects 60% 72% 66% 40% 20% 0% Over Budget Behind Schedule Industry operational performance (UKCS) 90% UKCS production…
Phases of growth built on core strengths CORE STRENGTHS 3. Growing and enhancing Deep and widening technical our offshore EPC capability capabilities Focus on operational excellence Commitment to local delivery Effective risk…
Marwan Chedid, Chief Executive, ECOM 2: Building and sustaining a world-class onshore EPC business
Our ECOM strategy Broad customer base of NOCs, IOCs and independents Who do we serve Range of ECOM Design and build commercial models Strategy oil and gas to fit customer How do What facilities; operate, needs from we do we…
Underpinning our delivery Offshore Projects & Operations Engineering & Consulting Services A strong position in UKCS Centre of excellence for group Leading duty holder position Growing competency and capability Strong synergy with…
We have a track record of long-term growth Onshore Engineering & Construction revenue and year-end backlog (USbillion) * Backlog as at 31 October 2013; revenue is market consensus Onshore Engineering & Construction We have…
We have established a strong presence in MENA We are one of the largest onshore oil Petrofac share of top 15 EPC contractors and gas EPC contractors in MENA MENA oil and gas projects Our business model enables us to be competitive…
We have a strong track record outside MENA Russia Kharyaga oil field development project for Total Turkmenistan UK Value US158 million South Yoloten gas Completed 2003 Laggan-Tormore gas plant field development Value US1 billion…
Our bidding pipeline is attractive Our bidding pipeline in 2014 is attractive Onshore Engineering & with our high priority prospects totalling Construction 2014 prospects c. US50 billion Given our good historical win rate, we…
We continue to deliver sector-leading net margins Onshore Engineering & Construction has delivered sector-leading net margins since we became a public company in 2005 We have consistently outperformed our global peers and never…
Underpinned by our bidding discipline We secured over US6 billion of order intake in 2009 and 2010, and have returned to this level in 2013 2011 and 2012 were good years in terms of industry EPC awards, but our order intake was…
A disciplined approach to securing new business We take a disciplined approach to securing new business: New prospects are thoroughly screened to understand project complexities, customer needs, the competitive environment, etc We…
Our project delivery is best-in-class Our ability to strike the right balance between empowering and actively monitoring the project execution team is one of our key strengths: Empowerment Active Long-term Tailor-made of project…
including delivery of 4 mega projects in 2013 We have successfully handed over 4 multi-billion dollar projects during 2013 with a gross value of approximately US10 billion South Yoloten, Turkmenistan NGL4, Abu Dhabi Asab…
We strive for operational excellence We continuously strive to improve our organisational and operational efficiency: Design optimisation: Organisational Execution model: Construction model: To optimise our efficiency: Revisit the…
Onshore Engineering & Construction in summary The onshore market opportunity remains robust We have differentiated ourselves through consistent delivery, underpinned by our core skills and capabilities, and we have protected of…
Andy Inglis, Chief Executive, IES 2: Delivering Integrated Energy Services
The IES strategy Focus on NOCs and niche exploration players Who do we serve IES Strategy How do What Wherever possible, we do we Integrated energy we will deliver with deliver offer services using Petrofac services…
Growing interest from NOCs extended to explorers North Sea East Europe Caspian SE Asia Middle East and Mexico North Africa West Africa New interest from explorers 28
We deliver services through three commercial models Risk Service Production Equity Upstream Contract (RSC) Enhancement Investments Contract (PEC) Business concept Build, operate, Mature field Field development/ transfer management…
We create value through operational excellence 30
Operational excellence: integrate our capability Malaysia, Berantai project Integrated services from across the Petrofac organisation to deliver a US1 billion, fast-track development reaching first gas in 21 months: Conceptual…
Operational excellence: redevelop the reservoir Increasing production Utilising new methodologies over life of contract in Vertical well Horizontal well Mexico Average cost US3 million US4 million Initial 250 bpd 1,000+ bpd production…
Operational excellence: drive cost efficiency 0 We are drilling 55% more efficiently than prior Prior performance performance in Mexico and 1,000 in the top quartile of Depth (metres) Petrofac Performance operators in the…
What we have achieved in the last two years Net Income USm 128 89 23 2011 2012 2013* 7 assets 10 assets 11 assets 2,300 employees 3,000 employees 3,200 employees 3 operating centres 4 operating centres 5 operating…
What do we need to deliver by 2015 Where are we headed Net income USm US300m Low end of IES data pack guidance Low to high range of IES data pack guidance 89 23 2011 2012 2013 2014 2015 2016+ Current portfolio forms a…
IES in summary Our strategic approach is strong The opportunity set is large from both the NOCs to the explorers We are growing our capability and building our operational momentum We have built a business of scale and…
Ayman Asfari, Group Chief Executive 4: Growing and enhancing our offshore EPC capability
We have a strong track record in offshore projects We have more than 30 years experience Over the last 10 years, we have been in offshore operations, maintenance and increasingly active in shallow-water brownfield engineering…
Strong offshore capex growth outlook Offshore production is set to play The SURF market is expected to an increasing role in oil and gas more than double in size between markets and the trend is to deeper 2013 and 2020 water 160…
We have a differentiated offshore EPCI strategy We are building a differentiated top tier offshore EPCI business focused on high-end turnkey opportunities. Our key focus areas: Projects: Customers: Geographies: Building upon our core…
Building on our core skills and capabilities To access top tier EPCI opportunities we need to: selectively build on our existing core skills and capabilities make the minimum investment necessary in an installation vessel to access…
We are building a strong offshore team We are leveraging on our existing To manage our deepwater projects onshore EPC capability which is and support our vessel initiative, key providing more than 90% of the specialists have already…
We are building differentiated installation capability Our installation vessel delivers a unique combination of high-end capabilities achieved for the minimum capital outlay. 43
Petrofac 6000 project is well advanced Letters of intent were placed in July 2013 for the design and manufacture of the most critical equipment: Main 5000 metric tonne crane and 4 deck cranes 2000 metric tonne J-Lay tower Since…
Preparing Petrofac to be a top tier EPCI contractor Deepwater SURF Pipelaying Derrick/platform installation Access to SURF EPCI Subsea Installation Mega lifts = 5000t Medium…
Offshore EPCI strategy in summary The offshore market opportunity is attractive and our strategy is to build a differentiated top tier EPCI business focused on high-end turnkey opportunities We already have substantial capability…
Tim Weller, Chief Financial Officer 5: Financial profile
Our return on capital is expected to remain high Our return on capital employed* ROCE is expected to remain (ROCE) has recently decreased as we significantly higher than 20% over invest in IES, but remains considerably our 5-year…
We are disciplined in allocating capital Integrated Energy Services Offshore strategy We expect to invest around US1 We expect to invest around US1 billion each year on average in IES billion in our deepwater offshore over our…
We have a strong financial position From a substantial net cash position, we have entered a period where we will carry net debt as we invest capital in IES and our offshore strategy Our balance sheet remains strong and…
Financial profile in summary Our return on capital is expected to be remain significantly higher than 20% over our 5-year planning horizon Our offshore strategy is expected to deliver capital returns in line with those expected…
Ayman Asfari, Group Chief Executive 6: Summary and Q&A
Summary Petrofac has always differentiated itself through first class execution, commercial innovation, local delivery and a unique culture This consistent approach has allowed us to: establish a market leading onshore business…
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