What's in Store for the Asia Pacific Oil & Gas Markets in 2012?

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Frost & Sullivan Analyst Briefing on What’s in Store for the Asia Pacific Oil & Gas Markets in 2012

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What's in Store for the Asia Pacific Oil & Gas Markets in 2012?

  1. 1. What’s in Store for the Asia Pacific Oil & Gas Markets in 2012? Subramanya Bettadapura, Director Energy and Power Systems 9/12/2011
  2. 2. Executive Summary — CEO’s Perspective Source: Frost & Sullivan analysis. 2 Exploration & Production capital spending to increase in 2012 3 Deepwater market to see increased activity in 2012 4 LNG imports to Southeast Asia set to increase 5 Asia refining capacity additions in 2012 double of 2011 levels 1 Average oil prices (Brent crude) forecast to be above $ 90 in 2012
  3. 3. Opportunities Highlights
  4. 4. Highlights: Southeast Asia Upstream Sector Source: Frost & Sullivan analysis. Attractive Countries <ul><li>Malaysia </li></ul><ul><li>Indonesia </li></ul>Segments to Watch <ul><li>Deepwater </li></ul><ul><li>Enhanced Oil Recovery (EOR) </li></ul><ul><li>Marginal Fields </li></ul>Growth Potential 2012 0 1 2 3 4 5 4.5 1-2 Years 3-6 Years 7-10 Years High Growth Medium Growth Low Growth Anticipated Investments E&P Capital Expenditure, Southeast Asia (2012): $38.7 billion Growth Rate in 2012 10.6% Stable Increasing Decreasing
  5. 5. Highlights: Malaysia and Indonesia Upstream Sector Indonesia Upstream Sector Malaysia Upstream Sector Stable Increasing Decreasing Anticipated Investments E&P Expenditure, Indonesia (2012): ~ $21 billion Growth Rate in 2012 23.5% Segments to Watch <ul><li>Deepwater Projects </li></ul>Anticipated Investments E&P Expenditure, Malaysia (2012): ~ $15 billion Growth Rate in 2012 16.6% Segments to Watch <ul><li>Deepwater Projects </li></ul><ul><li>Enhanced Oil Recovery (EOR) </li></ul><ul><li>Marginal Fields </li></ul>
  6. 6. OUTLOOK EXPLAINED
  7. 7. Oil Price Outlook Brent crude average price to remain upwards of $90 , even in weak economy Oil Prices <ul><li>The wide range forecast for Brent crude in 2012 is $90 - $115 per barrel (annual average) </li></ul><ul><li>Even if the global economy contracts by 1%, Brent crude to average over $90 </li></ul><ul><li>Demand for petroleum products from China and India expected to remain strong thereby increasing the average oil price to $ 115 </li></ul>72.5 96.8 61.5 79.5 111.7 105 Brent Crude, Spot Prices (Annual Average) $ / Barrel
  8. 8. Global E&P Capital Spending Outlook <ul><li>Some independent E&P companies in North America have indicated that they may spend less in 2012 compared to 2011 </li></ul><ul><li>Increased spending in Middle East and South America </li></ul><ul><li>Increased spending in Asia Pacific, specifically in Southeast Asia </li></ul><ul><li>F&S forecasts the global E&P capital spending to increase to $545 billion. </li></ul>Global E&P capital spending to increase in 2012 to $545 billion E&P Capital Spending $ Bn 490 545 442 395 454 400 Growth Rate Source: Barclays Capital E&P Spending Survey; Frost & Sullivan estimates for 2012 11.2% 10.9% 11.9% 13.5% (13.0)%
  9. 9. Southeast Asia Capital Spending Outlook <ul><li>New areas being explored </li></ul><ul><li>Exploration and development of deepwater blocks </li></ul><ul><li>Rejuvenation of mature fields – especially in Indonesia and Malaysia </li></ul><ul><li>Development of marginal fields in Malaysia and Indonesia </li></ul><ul><li>Increased complexity of projects driving up costs </li></ul>E&P capital spending in Southeast Asia to be around $ 38.7billion E&P Capital Spending Source: Frost & Sullivan estimates based on annual reports of E&P companies and NOCs $ Bn Growth Rate 19.9 22.6 25.1 29.8 35.0 38.7 13.7% 11.1% 18.6% 17.2% 10.6%
  10. 10. Southeast Asia Offshore Rigs Outlook <ul><li>Concerns about tightening supply of high specification rigs led to the swelling of orders in 2010 </li></ul><ul><li>Though there are indications of oversupply globally, rig demand, especially for high spec rigs, is expected to increase in 2012 </li></ul><ul><li>High-end Jack-up utilization is over 75% in Southeast Asia </li></ul><ul><li>Rigs operating in Southeast Asia are currently posting dayrates that exceed the global average for jackups </li></ul><ul><li>The outlook for high end Jack-ups and Drillships looks good as dayrates and utilization rates improve </li></ul>A record number of rigs that were ordered in 2010 will enter the fleet beginning mid-2012 Offshore Rigs Orders Source: Compiled by Frost & Sullivan Rigs under Construction in the Southeast Asian Region <ul><li>Drivers for Rig Construction </li></ul><ul><li>To upgrade to High Spec Rigs for </li></ul><ul><ul><li>Enhanced Technical Capabilities </li></ul></ul><ul><ul><li>Higher Operational and Safety Standards </li></ul></ul>End of 2010 End of 2011 (e) End of 2012 (e) Global Jack-up Fleet 356 380 395
  11. 11. Asia Pacific LNG Re-gasification Sector Outlook Australia to add the largest LNG liquefaction capacity during 2012 to 2016 LNG Imports to the Asia Pacific Region Set to Increase Further in 2012 LNG Imports Source: Compiled by Frost & Sullivan Location : Jakarta Bay, West Java, Indonesia Start up : 2012 Capacity : 3 MTPA Location : Melaka, Malaysia Start up : 2012 Capacity : 3.8 MTPA Location : Map Ta Phut, Thailand Start up : Phase 1, 2011 Capacity : 5.0 MTPA Location : Kochi, India Start up : 2012 Capacity : 5.0 MTPA Location : Dabhol, India Start up : 2011 Capacity : 1.2 MMTPA Location : Jurong Island, Singapore Start up : 2013 Capacity : 3 MTPA LNG Exports LNG Re-gasification Terminals – ongoing projects; Commission period during Q3, 2011-2013 Location : Zhuhai, China Start up : Phase 1, 2013 Capacity : 3.5 MTPA Location : Jieyang, China Start up : ~ 2012/2013 Capacity : 2.0 MTPA
  12. 12. Asia Pacific Refining Capacity Outlook Asian refining capacity to increase by 850,000 barrels per day in 2012 compared to 400,000 barrels per day in 2011 Refining Capacity BP Statistical Review, F&S Forecast 28.4 28.8 29.6 27.6 Million Barrels/Day Asia Pacific Refining Capacity <ul><li>A major portion of the capacity addition investment is by NOCs </li></ul><ul><li>China is expected to add 600,000 barrels per day refining capacity in 2012 </li></ul><ul><li>China and India adding refinery capacity in a bid to become self-sufficient </li></ul><ul><li>India to become the second largest refiner in Asia overtaking Japan </li></ul><ul><li>With refining capacity projected to increase by 3.1% and demand in major export markets projected to stay flat in 2012, margins are expected to be under pressure </li></ul>
  13. 13. http://twitter.com/frost_sullivan Follow Frost & Sullivan on Facebook, LinkedIn, SlideShare, and Twitter http://www.facebook.com/pages/Frost-Sullivan/249995031751?ref=ts http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan
  14. 14. For Additional Information Donna Jeremiah Corporate Communications Asia Pacific +603 6204 5832 [email_address] Carrie Low Corporate Communications Asia Pacific +603 6204 5910 [email_address] Subramanya Bettadapura Director Energy & Power Systems [email_address]

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