Market Outlook on the Deepwater Subsea Sector. Marine Richard, Associate Analyst 6th February 2014

Transcription

1 Market Outlook on the Deepwater Subsea Sector Marine Richard, Associate Analyst 6th February 2014

2 Table of Contents I. Introduction to Infield Systems II. Global Macroeconomic Overview III. Offshore Capex Forecast a) Offshore Capex by Infrastructure b) Offshore Subsea Capex by Water Depth IV. Subsea Market Overview a) Subsea Market Shares in 2013 b) Deepwater Subsea Tree Awards by Manufacturer V. Deepwater Subsea Market Forecast VI. a) Global Overview b) Brazil c) Gulf of Mexico d) West Africa e) Asia f) Eastern Mediterranean & East Africa Disclaimer 2

3 SECTION I Introduction to Infield Systems

4 Geographic Locations A globally recognised oil & gas consultancy with a dedicated international team of cross-sector specialists Office Locations Key Global Personnel James Hall (Director) London james.hall@infield.com Aberdeen London Gregory Brown (Transaction Services Manager) London gregory.brown@infield.com Houston Steve Adams (International Sales Manager) Aberdeen steve.adams@infield.com Head Office Regional Office Luke Davis (Senior Analyst) London luke.davis@infield.com John Ferentinos (Senior Analyst) London john.ferentinos@infield.com c.40 energy professionals global footprint Marine Richard (Associate Analyst) London marine.richard@infield.com

5 Image courtesy of FMC Technologies Inc.

6 Products & Services A leading offshore oil and gas and associated services consultancy Data, Reports & GIS Mapping Business Strategy and Analysis Transaction Services Offshore specific data covering production infrastructure, rigs, specialist vessels, construction yards, contracts and OFS providers Sector specific reports GIS mapping services covering operational and forecasted production infrastructure Market matching and market tracking Match & Track Complete market intelligence outsourcing Bespoke sector services Market entry strategy Procurement strategy advisory Project Flow Ad-hoc sector analysis NPV Economic Field Modelling Advisory Market overview IPO Debt financing analysis Distressed asset purchase analysis Buy/sell side market due diligence Opportunity identification 6 Source: Infield Systems Limited, company websites

7 SECTION I Global Macroeconomic Overview

8 $/bbl $/bbl 2014 Oil Price Outlook Brent prices will likely fall slightly from their 2013 average of $108/bbl to about $104/bbl in 2014 Brent Oil Price Forecast (Annual Average) Brent Oil Price Brent Trading Range 150 Demand Responses BRENT Supply Responses 70 Feb/11 Jun/11 Sep/11 Jan/12 May/12 Sep/12 Jan/13 May/13 Sep/13 Brent prices will likely fall from their 2013 average of $108/bbl to about $104/bbl in 2014 US oil production could rise to 9.6mbpd in 2014 (EIA) In early January 2014, Iran and six major powers signed an interim accord Bernstein estimates that the three swing factors Iran, Iraq and Libya, could increase global oil supply by 450,000bpd in 2014 A better, stable economic outlook within major economies will likely support prices above $100/bbl Without unexpected supply outages, Brent crude will continue to trade in the $20/bbl range throughout 2014 and 2015 Brent oil prices have stayed within their usual trading range of between $100/bbl and $120/bbl since June 2012 Prices outside the range would have the potential to be met with supply or demand responses 8 Sources: Infield Systems; EIA Petroleum and Other Liquids Database; Bernstein Research

9 $/mmbtu Long-term Gas Price Dynamics Gas prices will likely continue to rise in the US and fall gradually in the rest of the world by 2020 Global Gas Price Forecast Japan China Brazil India Germany UK Major divergence in global gas prices, with three distinct regional segments: US gas prices have been suppressed by abundant shale supply Asian LNG prices have been stimulated by nuclear shutdowns in Japan European gas prices have stayed somewhere in the middle US $/MMBtu Gas Price in Key Regions In the rest of the decade, we anticipate that gas prices will continue to rise in the US and fall gradually in the rest of the world Average $5.9/mmBtu in the US $9.3/mmBtu in the UK $13.9/mmBtu in Japan We anticipate that the divergence in regional gas prices will narrow gradually by the decade end US (NYMEX) UK (NBP) Japan (LNG) However, a fully traded global gas market remains unlikely by the decade end The gas trade remains highly illiquid Price premiums in Asia will likely remain in the long-run 9 Sources: Infield Systems; Historical data workbook (BP Statistical Review of World Energy 2013); Bloomberg

10 SECTION II Global Offshore Capex

11 Offshore Capex by Infrastructure Type Subsea completions are expected to account for 22% of the $650 billion in offshore Capex in Capex (US$m) by Infrastructure Type Capex split (%) by Infrastructure , , , ,000 80,000 60,000 40,000 20,000 Control Line 4% Subsea Completion 22% Platform 30% Single Point Mooring 2% Pipeline 42% Pipeline Platform Subsea Completion Control Line Single Point Mooring Subsea Capex (US$m) by Equipment Type 40,000 35,000 30,000 US$650 billion total industry Capex % CAGR 62% increase on ,000 20,000 15,000 10,000 5, Satellite Well Manifold Templated Well Plem Template Others US$140 billion subsea Capex 10.7% CAGR Fastest growing segment Doubling in Capex compared to the last five years 11

12 Subsea Tree Installations and Capex by Water Depth Deepwater trees account for 58% of units but 84% of Capex of all subsea trees in Subsea Tree Installations by Water Depth 100% 80% 60% 40% 20% 0% >1499 Subsea Tree Units (%) by Water Depth Subsea Tree Capex (US$m) by Water Depth 100% 80% 60% 40% 20% 0% >1499 Subsea Tree Capex (%) by Water Depth % > % % % % % > % % % % 12

13 SECTION III Subsea Market Overview

14 Deepwater Subsea Market Shares in 2013 (end Q3) Deepwater trees accounted for 79% of the 520 subsea trees awarded in 2013, the majority in Latin America Africa Asia Australasia Europe Latin America Middle East & Caspian Sea North America 14

15 Deepwater Subsea Tree Awards by Manufacturer by end Q FMC dominated the GoM and Africa, whilst Aker Solutions and Aker found success in Brazil North America: 77 FMC 77% Aker Solutions 3% OneSubsea 20% OneSubsea 67% Aker Solutions 33% Europe: 24 OneSubsea 100% Global manufacturers market shares 2013: 411 subsea tree awards GE O&G 7% FMC 41% Aker Solutions 29% OneSubsea 25% Middle East & Caspian Sea: 3 Latin America: 188 OneSubsea 6% FMC 26% Aker Solutions 43% GE O&G 9% FMC 55% Aker Solutions 25% OneSubsea 11% Asia: 15 GE O&G 69% FMC 25% OneSubsea 31% Africa:

16 SECTION IV Deepwater Subsea Market Forecast

17 Global Deepwater Subsea Tree Installations Forecast Up to 2,000 deepwater subsea installations are expected globally in the timeframe Subsea Installations by Region Subsea Installations (%) by Operator Africa Asia Australasia Europe Latin America Middle East & Caspian Sea North America Subsea Installations (%) by Region Middle East & Caspian Sea 2% North America 20% Latin America 24% Europe 4% Asia 11% Africa 37% Australasia 2% Eni 4% Others 31% ExxonMobil 6% Chevron 8% Shell 8% Petrobras 22% Total 12% 2,000 deepwater subsea equipment installations in Doubling in installations from new installations per year Deepwater installation activity and Capex led by Africa, Latin America and North America BP 9% US$115 billion Capex in Doubling in Capex from Roughly same regional split as installations 17

18 $bn Brazil Brazil is a strong market for subsea installations but Petrobras faces investment and local content challenges Brazil Subsea Installations by Operator Petrobras Market Capitalisation Petrobras Shell Chevron Queiroz Galvao Brazil Subsea Installations (%) by Water Depth % 80% 60% 40% 20% 0% > Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/ deepwater subsea installations in % increase on Driven by pre-salt discoveries in last decade 8.4 tree installations per development (average) 68% of tree installations concentrated in 8 fields Challenges Petrobras investment capability Manufacturing capacity Little regulatory change expected before

19 Gulf of Mexico The Gulf of Mexico is a strong opportunity for the subsea market, with 400 installations in GoM Subsea Installations by Country GoM Subsea Installations (%) by Operator Others 29% Shell 16% BP 11% USA Mexico GoM Subsea Installations by Water Depth 100% 80% 60% ExxonMobil 8% LLOG 8% Chevron 8% Hess 9% Anadarko 11% 400 deepwater subsea installations in % increase on Key operators are IOCs and Independents 4 tree installations per development (average) 40% 20% 0% >1499 Regulatory reforms in Mexico Positive signs Will depend on second stage legislation (2015) Likely to impact installations later on 19

20 West Africa Angola and Nigeria are major drivers of the African subsea market, with Ghana and Congo also promising West Africa Subsea Installations by Country Subsea Installations (%) by Operator Angola Nigeria Ghana Congo (Brazzaville) Equatorial Guinea Ivory Coast Subsea Installations (%) by Country Equatorial Guinea Congo 5% (Brazzaville) 8% Ghana 12% Nigeria 18% Ivory Coast 5% Angola 52% Noble 3% Others 12% Chevron 7% Tullow 9% Eni 10% ExxonMobil 12% Total 34% BP 13% 670 subsea installations in % increase on % Angola and Nigeria Key operators are mostly IOCs and some Independents 6 tree installations per development (average) Nigeria activity expected to move ahead, but uncertain New basins in emerging countries very promising 20

21 Asia Asia is a small but growing market for deepwater subsea trees, led primarily by activity in Malaysia and India Asia Subsea Installations by Country Asia Subsea Installations (%) by Operator Husky 7% Others 7% ONGC 13% Shell 22% Malaysia India Indonesia China (PRC) Brunei Philippines Sri Lanka Chevron 14% Reliance 17% Murphy 20% Asia Subsea Installations (%) by Country China (PRC) 7% Philippines 2% Brunei 5% Sri Lanka 1% 200 subsea installations in x increase on Malaysia, India and Indonesia dominate Main drivers are rising domestic demand & LNG exports Indonesia 16% India 30% Malaysia 39% Deepwater expected to represent 63% market share in , up from 39% in Key operators are Chevron, Shell, Murphy and Reliance 3.9 tree installations per development (average) 21

22 Eastern Mediterranean & East Africa Subsea opportunities in the Levant basin and E. Africa are likely to materialise beyond the forecast period 35 subsea installations in the Middle East in Stable activity from Azerbaijan BP-led projects ACG incremental wells Shah Deniz II Growing interest in the Levant Basin Noble Energy key operator Licensing round in Lebanon Interest in Cyprus 45 subsea installations in East Africa in Dependent on LNG export terminals Potential for cost overruns Competition from other regions But dry gas 100km from shore Middle East Subsea Installations by Country Azerbaijan Israel E. Africa Subsea Installations by Country Likely to see impacts of increased installations and Capex beyond the forecast period Mozambique Tanzania 22

23 SECTION V Disclaimer

24 Disclaimer The information contained in this document is believed to be accurate, but no representation or warranty, express or implied, is made by Infield Systems Limited as to the completeness, accuracy or fairness of any information contained in it, and we do not accept any responsibility in relation to such information whether fact, opinion or conclusion that the reader may draw. The views expressed are those of the individual contributors and do not represent those of the publishers. Some of the statements contained in this document are forward-looking statements. Forward looking statements include, but are not limited to, statements concerning estimates of recoverable hydrocarbons, expected hydrocarbon prices, expected costs, numbers of development units, statements relating to the continued advancement of the industry s projects and other statements which are not historical facts. When used in this document, and in other published information of the Company, the words such as "could," "forecast, estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although the Company believes that its expectations reflected in the forward-looking statements are reasonable, such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors could cause actual results to differ from these forward-looking statements, including the potential for the industry s projects to experience technical or mechanical problems or changes in financial decisions, geological conditions in the reservoir may not result in a commercial level of oil and gas production, changes in product prices and other risks not anticipated by the Company. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Infield Systems Limited