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GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood

Douglas-Westwood · Sep 26, 2013 · 46 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 1
    Global Offshore Prospects Energy Institute, London Steve Robertson, Director Douglas-Westwood Limited Rod Westwood, Associate Director 26st September 2013 Photo: Marit Hommedal / Statoil ASA 1
  2. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 2
    www.dw1.com Our Business: Research and Consulting Established 1990 Aberdeen, London, Canterbury, Houston, New York & Singapore Activity & Service Lines offshore Business strategy & advisory power Commercial due-diligence Market…
  3. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 3
    Leading Commercial Advisor for OFS M&A, Financing Douglas-Westwood Limited 2013
  4. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 4
    Industry-Leading Published Research Excellent report, very comprehensive and well laid out Vestas (Denmark) DouglasWestwood are the sector study experts Woodside (Australia Douglas-Westwood Limited 2011
  5. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 5
    Energy Industry Outlook Oil & Gas Sector Focus Risk Factors & Conclusions
  6. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 6
    Energy Demand Bullish Outlook Global Oil Consumption (BP) Source: BP 2013 Energy intensity reaching/reached limits in many OECD countries Developing economies will continue to drive global energy demand
  7. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 7
    The Supply Mix is Changing Rapidly 60% of oil is used in transportation (OECD countries) but in some it is 70% Source: BP 2013
  8. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 8
    Inherent Demand Oil demand historically increases by 0.75 * GDP 105 30% Global Actual (EIA) growth (inherent demand GDP Growth Expected Based on GDP Growth 100 growth) Implies 20%+ oil consumption 95 mbpd growth from…
  9. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 9
    Liquids Supply Q4 2010- Q4 2012 Total production up 1.5 mpbd on 89 mbpd production in 2010 1.5…
  10. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 10
    OPEC Liquids Supply Q4 2010- Q4 2012 But the supply situation is a bit more nuanced.. 0.8 0.6 Iran down 1,100 kbpd 0.4 0.2 Saudi up 770 kbpd, but below 0.0 mbpd levels of 1979 -0.2 Iran Iraq Saudi All other OPEC -0.4 Of…
  11. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 11
    Factors driving strong gas demand 4.5 4.0 Oil +66% billion tonnes oil equivalent 3.5 3.0 Gas +216% 2.5 Oil 2.0 Gas 1.5 1.0 0.5 0.0 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996…
  12. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 12
    Regional Disparities: Gas Prices 700 Domestic Production 20 Net Imported 18 Regional Gas Price (US 600 Low US gas prices have made Gas Consumption (bcm) Regional Gas Price 15 per million Btu) 500 400 headlines…
  13. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 13
    Strong growth in LNG supply 600 Africa Asia Australasia 2011-2020 CAGR +7% 500 Eastern Europe & FSU Latin America Middle East 400 North America Western Europe 2001-2010 CAGR +9% mmtpa 300 200 100 0 1959 1963 1967…
  14. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 14
    FLNG Projects In development: 26 mmtpa capacity of LNG FPSO projects in 12 key projects BC LNG FEED Tamar Rotan Kanowit, Kumong Abadi Pre-FEED FEED FID Pre-FEED Partners Tom Tatham, Haisla First Nation Partners Petronas, Murphy…
  15. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 15
    FLNG Expenditure 8 Africa Asia Australasia 7 Eastern Europe & FSU Latin America 6 Middle East Expenditure ( billions) North America 5 4 3 2 1 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019…
  16. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 16
    Tight Oil Has Changed the US Oil Supply Position Source: EIA, AEO 2013 US to be producing nearly as much as Saudi Arabia by the end of this decade. Enough to make a massive impact on the US. But
  17. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 17
    European Development Potential Is Mixed For Unconventional Resources Positive Challenges Energy portfolio diversification Onshore rig numbers Import dependency: Russia, Land ownership/mineral rights Maghreb, LNG Land usage…
  18. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 18
    Energy Industry Outlook Oil & Gas Sector Focus Risk Factors & Conclusions
  19. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 19
    Base Data: Providing a Leading Edge in Market Forecasts DW databases span the energy industries A unique resource the core of our global information & forecasting processes We do not sell the data but use it in our work for…
  20. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 20
    Offshore & Deepwater Supply Growth Source: Douglas-Westwood Drilling & Production Forecast 2013 Offshore and deepwater becoming increasing important to global hydrocarbon supply. 120mn boepd 60mn boepd 70mn boepd 50mn 60mn…
  21. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 21
    Global Subsea Expenditure Outlook 23.8bn 18.2bn 12.9bn 2013 expected to usher in a stepchange in subsea expenditure - 106bn of investment expected over the next five years compared to 70bn over the previous period. This…
  22. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 22
    Subsea Production Forecast 25 1,000 Western Europe Oil & Gas Production (mmboe/d) North America 20 Middle East 800 Subsea Trees Installed Latin America Eastern Europe & FSU 15 Australasia 600 Asia Africa 10 400…
  23. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 23
    Subsea Production Forecast 70 Subsea Production 2013-2020 Oil & Gas Production (mmboe/d) 60 Surface Production Subsea: 50 +8.5m barrels/day 40 30 4,723 wells drilled 20 Surface: 10 +4.6m barrels/day 0 20,222 wells…
  24. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 24
    International E&P Expenditure Exxon Mobil Chevron Royal Dutch/Shell PetroChina Barclays Capital Petroleo Brasiliero SA (Petrobras) figures have shown a Petroleos Mexicanos trend of increasing (Pemex) E&P Capex…
  25. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 25
    Leading Indicators Offshore Rig Orders 120 120 Semisub Jackup Drillship Drill Barge 100 100 Delivered units Oil Price (m) 2008 - 2013 No. of rigs ordered 80 280 Delivered 80 1979 1984 296 Delivered /bbl 60 60 40…
  26. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 26
    Leading Indicators - Deepwater Capex to soar 70 Africa Asia 60 Australasia Expenditure (bn) 50 Eastern Europe & FSU Latin America 40 Middle East North America 30 Western Europe 20 10 0 2008 2009 2010 2011 2012 2013…
  27. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 27
    Indicators / Markets: Subsea Tree Installations Crash Recent Future 700 APAC EMEA 600 Americas Subsea Tree Installations 500 400 300 200 100 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source:…
  28. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 28
    Indicators / Markets: Vessel Days Crash Recent Future 100 APAC 90 EMEA 80 Americas 70 Vessel Days (000s) 60 50 40 30 20 10 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Douglas-Westwood Vessel…
  29. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 29
    Subsea Hardware Orders - New Highs 6,000 GE Oil & Gas FMC 5,000 Dril-Quip Cameron 4,000 Aker Solutions Subsea Order Value (US million) 6-Month Moving Avg 3,000 2,000 1,000 0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08…
  30. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 30
    Global Vessel Supply Outlook 50 LWIV Total Pipelay total 185 New Builds (2007-13) 120.00 45 FLEX total MSV total 100.00 Oil Price ( US p/bbl) 40 35 DSV Total Oil Price (EIA) Number of Vessels 80.00 30 25 60.00 20 15…
  31. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 31
    Floating production sustained recovery expected 30 Africa Asia 25 Australasia Eastern Europe & FSU Expenditure ( billions) Latin America Middle East 20 North America Western Europe Order Year 15 10 5 0 2008…
  32. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 32
    FPSOs - The Importance of Brazil Premier Oil Africa ExxonMobil Asia Australasia ENI Latin America North America BP Western Europe OGX Inpex Chevron Total Shell Petrobras 0 5 10 15 20 Expenditure ( billions)…
  33. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 33
    ROVs & AUVs Crash Recent Future 160 APAC 140 EMEA Americas 120 ROV Days (000s) 100 80 60 40 20 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ROV demand seeing growth driven by increased focus on subsea…
  34. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 34
    Emerging opportunities decommissioning Decommissioning Expenditure to 2041 Source: DW/Deloitte Decommissioning Report 4 million tonnes platform weight to be decommissioned over the next 30 years. Total North Sea…
  35. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 35
    Energy Industry Outlook Oil & Gas Sector Focus Risk Factors & Conclusions EI September 2013 35
  36. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 36
    Where is the industry heading Upstream Spend Actual and Forecast Source: Barclays Capital Record E&P spending - 678 billion in 2013 OFS & OEM backlogs recovered Rig building boom tailing off Oil prices flat (Brent) or lower…
  37. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 37
    Risk Considerations What could de-rail the energy business Capex Compression Will high costs kill growth Slowdown in economic growth Political instability and discontinuity Major industry accidents Growth constrained by…
  38. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 38
    Costs are rising fast E&P Capex per Barrel Source: Barclays Capital Nearly 11% per year. And Brent has fallen by 5 since last year, 10 since 2011 Source: EIA 38
  39. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 39
    Back to the 1990s CEO Shamsul Azhar Abbas We have suffered from lower oil prices. But if you look at the costs, they have increased further. If there is a need to defer some of projects, we will do that. Cash Return On…
  40. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 40
    Project Execution On Time and On Budget Unit Nam e Type 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Atlantis FPSS (Green Canyon 743-A) FPSS Cidade de Vitoria FPSO Corocoro FPSO Front Puffin FPSO Independence FPSS Kikeh…
  41. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 41
    FPS Sector as an Example Project delays and cost over-runs are the norm Some projects have suffered very high profile failures or even complete failure Few of the major lease contractors are profitable Oil companies want to lease…
  42. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 42
    Brazil Struggling with Project Execution 2013 will be worse (Petrobras CEO) February 2013 2% production decline in 2012 to 2 mbpd 0% to 2% production change in 2013 Implicit 11% natural decline rate 17% QoQ underlying lifting…
  43. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 43
    Industry Capacity Construction Vessel Shortages Vessels: number of vessel days in deep waters is set to increase by more than 50% over the next five years. - The World Subsea Vessel Operations Market 2011-2015, Douglas-Westwood…
  44. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 44
    The wild cards Global economy, particularly the EU More Arab uprisings /instability Saudis own growing oil demand US becomes an energy exporter Industry over-reaction to market cycles 44
  45. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 45
    Conclusions The offshore business is seeing record levels of activity. Technology requirements are being driven by the monetisation of gas, deepwater oil and harsh/sour environments. Zero growth in oil prices + cost inflation in…
  46. GLOBAL OFFSHORE PROSPECTS – Douglas-Westwood – slide 46
    Thank you www.douglaswestwood.com researchdouglaswestwood.com

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