Oil & Gas Capital Expenditure Outlook GDGE0020TR / Published January 2013

Transcription

1 Oil & Gas Capital Expenditure Outlook 2013 GDGE0020TR / Published January 2013

2 Global Oil and Gas Capital Expenditure is Expected to Increase to US$XX Billion in 2013 The global oil and gas capital expenditure (capex) is expected to increase from US$XX billion in 2012 to US$XX billion in 2013, registering a growth of XX%. The global oil and gas capex first passed the US$ trillion mark in 2012 and will continue to witness incremental growth in There are several reasons for the continued increase of the global capex. Global crude oil prices have consistently hovered above US$XX (West Texas Intermediate price) in 2012, encouraging oil and gas companies to aggressively invest in capital intensive Exploration and Production (E&P) projects in difficult environments such as deep and ultra-deep offshore regions. Without the favorable global crude oil price scenario, these projects would have been economically unfeasible. Additionally, the high demand for crude oil and natural gas is also encouraging oil and gas companies to develop unconventional oil and gas deposits such as oil sands, tight oil, shale gas, oil shale and Coal Bed Methane (CBM). The figure below shows global oil and gas capex for the period. Oil and Gas Industry, Global, Capital Expenditure (US$bn,%), National Oil Companies are Expected to Account for More than Half of the Total Global Oil and Gas Capital Expenditure in 2013 NOCs are expected to account for XX% of the total global oil and gas capex in NOCs are followed by Integrated Oil Companies (IOCs) with a share of XX% and independent oil companies with share of XX%. In terms of the year-over-year increase in capex, independent oil companies dominate, with an estimated XX% growth. These will be followed by NOCs, with an estimated year-over-year capex growth of XX%, and integrated companies, with an estimated capex growth of XX%. The figure below shows the estimated capex by the three major oil and gas company types for Oil and Gas Industry, Global, Capital Expenditure By Company Type (US$bn), 2013 Oil and Gas Capex (US$bn) Global OIl and Gas Capex (US$bn) Year-over-year Growth (%) National Oil Companies Integrated Oil Companies Independent Oil Companies Source: GlobalData Estimates Global Oil and Gas Capex Year-over-year Growth Source: GlobalData Estimates Strong financial stability, state support and access to investments will boost the investment confidence of the NOCs, which are expected to continue investing heavily in oil and gas projects worldwide. Strong capex growth expected from riskaverse independent oil companies which would indicate strong market confidence and a positive outlook. Page 2

3 1 Table of Contents 1 Table of Contents List of Tables List of Figures Introduction Overview GlobalData Report Guidance Global Oil and Gas Capital Expenditure to Increase to US$1.2 Trillion in Global Oil and Gas Capital Expenditure is Expected to Increase by 15.9% in 2013 when Compared to National Oil Companies are expected to Account for more than half of the Global Oil and Gas Capital Expenditure in Global Onshore E&P Capex will Continue to be Higher than Global Offshore E&P Capex in E&P will Continue to Account for the Majority of the M&A and Asset Transaction Activity in the Oil and Gas Industry for Capital Expenditure by Oil and Gas Sector The Global E&P Sector Capex is Expected to Witness a Year-over-Year Growth of 18.7% in Global Midstream and Downstream Capex is Expected to Witness a Year-over-Year Growth of XX% in Capital Expenditure by Region North American Capex is Expected to Witness a Year-over-Year Growth of 16.7% in The E&P Segment is Expected to Account for 55.5% in Total Oil and Gas Capex in Asia-Pacific for Oil and Gas Capex of the Middle East and Africa will Witness a Year-over-Year Increase of US$37.0 Billion in The Oil and Gas Capex of Europe is Expected to Increase by US$19.1 Billion from 2012 to The Oil and Gas Capex of South and Central America is Expected to Witness a Year-over-Year Growth of 15.0% in Oil and Gas Companies - Capital Expenditure National Oil Companies Integrated Companies Independent Oil Companies Major Planned Oil and Gas Projects in Kashagan and Fort Hills are Among the Major, Planned Upstream Projects Kashagan is a Large, Complex and Capital Intensive Oil Production Project in Caspian Sea Fort Hills is a Major Oil Sands Project in Athabasca, Canada Egina Field is Expected to Start Production in St. Malo Field is a Major Planned Conventional Oil and Gas Production Field in Central Gulf of Mexico Sapinhoá is Major Pre-salt Planned Production Field in Santos Basin, Offshore Brazil Nhon Hoi Refinery in Vietnam is One of the Largest Capital-Intensive Planned Refineries in the World Alaska Gas Pipeline Project (Main Line) is One of the Largest Capital-intensive Planned Transmission Pipeline Projects in the World Australia is Poised to Substantially Increase its LNG Liquefaction Capacity through Several Capital-intensive Projects Petrochemical Projects China and India hold Majority of the Planned Polypropylene Projects globally Polyethylene Projects Factors Influencing Oil and Gas Capital Expenditure in Consistently High Global Crude Oil Prices will Drive the Capex of Oil Companies in Increasing Global Oil and Gas Demand is Driving the Capex of Oil and Gas Companies in Increasing Upstream Activities of IOCs, NOCs and Independent E&P Companies will Drive 2013 Capex of Oil and Gas Industry Increasing Offshore E&P Activities will Fuel the Global Oil and Gas Capex in Appendix Page 5

4 9.1 Market Definition Abbreviations Sources Methodology Coverage Secondary Research Primary Research Contact Us Disclaimer Page 6

5 1.1 List of Tables Table 1: Oil and Gas Industry, Global, Capital Expenditure (US$bn), Table 2: Oil and Gas Industry, Global, Capital Expenditure by Region (US$bn), Table 3: Oil and Gas Industry, Global, Capital Expenditure by Company Type and Growth Rate (US$bn, %), Table 4: Oil and Gas Industry, Global, Capex by Company Type (US$bn), Table 5: Oil and Gas Industry, Global, Offshore and Onshore E&P Capex (US$bn), Table 6: Oil and Gas Industry, Global, Onshore and Offshore E&P Capex (US$bn), Table 7: Oil and Gas Industry, Global, Number of Deals by Segment, Q Q Table 8: Oil and Gas Industry, Global, Deal Value by Segment (US$MM), Q Q Table 9: Oil and Gas Industry, Global, Select Major Deals in terms of Value (US$MM), Q Q Table 10: Global E&P Industry, Capital Expenditure (US$bn, %), Table 11: Global Midstream and Downstream Industry, Capital Expenditure (US$bn,%), Table 12: Oil and Gas Industry, North America, Capital Expenditure (US$bn, %), Table 13: Oil and Gas Industry, Asia-Pacific, Capital Expenditure (US$bn, %), Table 14: Oil and Gas Industry, The Middle East and Africa, Capital Expenditure (US$bn, %), Table 15: Oil and Gas Industry, Europe, Capital Expenditure (US$bn, %), Table 16: Oil and Gas Industry, South and Central America, Capital Expenditure (US$bn, %), Table 17: Oil and Gas Industry, Global, Total Oil & Gas Capital Expenditure by Company Type (US$bn), Table 18: Oil and Gas Industry, Global, Total Capital Expenditure of Select National Oil Companies (US$MM), Table 19: Oil and Gas Industry, Global, Total Capital Expenditure of Select Integrated Oil Companies (US$MM), Table 20: Oil and Gas Industry, Global, Total Capital Expenditure of Select Independent Oil Companies (US$MM), Table 21: Oil and Gas Industry, Global, Major Planned Refining Projects in terms of Capex (US$MM), Table 22: Oil and Gas Industry, Global, Major Planned Transmission Pipeline Projects in terms of Capex (US$MM), Table 23: Oil and Gas Industry, Global, Major Planned LNG Liquefaction Projects in terms of Capex (US$MM), Table 24: Oil and Gas Industry, Global, Major Planned LNG Regasification Projects in terms of Capex (US$MM), Table 25: Oil and Gas Industry, Global, Planned Polypropylene Projects, 2013 Startup Table 26: Oil and Gas Industry, Global, Planned Polyethylene Projects, 2013 Startup Page 7

6 1.2 List of Figures Figure 1: Oil and Gas Industry, Global, Capital Expenditure (US$bn), Figure 2: Oil and Gas Industry, Global, Capital Expenditure by Region (US$bn), Figure 3: Oil and Gas Industry, Global, Capital Expenditure by Company Type (US$bn), Figure 4: Oil and Gas Industry, Global, Capital Expenditure by Company Type and Growth Rate (US$bn, %), Figure 5: Oil and Gas Industry, Global, Capex by Company Type (US$bn), Figure 6: Oil and Gas Industry, Global, Offshore and Onshore E&P Capex by Region (US$bn), Figure 7: Oil and Gas Industry, Global, Number of Deals and Deal Value by Segment (US$MM), Q Q Figure 8: Global E&P Industry, Capital Expenditure (US$bn, %), Figure 9: Global Midstream and Downstream Industry, Capital Expenditure (US$bn,%), Figure 10: Oil and Gas Industry, North America, Capital Expenditure (US$bn, %), Figure 11: Oil and Gas Industry, Asia-Pacific, Capital Expenditure (US$bn, %), Figure 12: Oil and Gas Industry, The Middle East and Africa, Capital Expenditure (US$bn, %), Figure 13: Oil and Gas Industry, Europe, Capital Expenditure (US$bn, %), Figure 14: Oil and Gas Industry, South and Central America, Capital Expenditure (US$bn, %), Figure 15: Oil and Gas Industry, Global, Total Oil & Gas Capital Expenditure by Company Type (US$bn), Figure 16: Oil and Gas Industry, Global, Total Planned Oil & Gas Capital Expenditure by Select Companies (US$MM), Figure 17: Petrobras, Planned Investments by Segment (%), Figure 18: Oil and Gas Industry, Global, Total Capital Expenditure of Select National Oil Companies (US$MM), Figure 19: Oil and Gas Industry, Global, Total Capital Expenditure of Select Integrated Oil Companies, (US$MM), Figure 20: Oil and Gas Industry, Global, Total Capital Expenditure of Select Independent Oil Companies (US$MM), Figure 21: Oil and Gas Industry, Kazakhstan, Location of Kashagan Field, Figure 22: Oil Sands Industry, Canada, Location of Fort Hills Project and Voyageur Upgrader, Figure 23: Oil and Gas Industry, West Africa, Location of Egina Field, Figure 24: Oil and Gas Industry, Gulf of Mexico, Location of the St. Malo Field, Figure 25: Oil and Gas Industry, Global, Average Crude Oil Prices of WTI, Brent and OPEC (US$), January to November Figure 26: Oil and Natural Gas Industry, Global, Projected Liquids* and Natural Gas Demand (mmtoe), Page 8

7 2 Introduction 2.1 Overview Global oil and gas industry capital expenditure (capex) for 2013 is estimated to continue growing steadily, driven primarily by upstream activities. Within the upstream sector, capex is estimated to increase in the offshore as well as onshore Exploration and Production (E&P) activities. Global oil and gas capex is expected to increase by XX% in 2013 over National Oil Companies (NOCs) are expected to be the major spenders for oil and gas development globally in 2013, followed by integrated companies and independent oil companies. Independent oil companies are expected to witness the largest increase in capex in the current year over their capex in the last year. These companies are estimated to increase their capex by XX% in 2013 over their capex in Of the global oil and gas capex, future E&P investment will be driven by the development of new oil and gas discoveries. In 2012, about XX oil and gas discoveries were announced worldwide, the majority of which were located in South and Central America (XX%), followed by the Middle East and Africa (XX%), Asia-Pacific (XX%), Europe (XX%), and North America (XX%). E&P capex is expected to increase as oil and gas companies commence the development of these resources. In addition to the development of new discoveries, the development of unconventional oil and gas and Canadian oil sand resources are also expected to remain a key focus of E&P investment in the next year. 2.2 GlobalData Report Guidance The report, Oil & Gas Capital Expenditure Outlook, 2013, starts with an executive summary. Chapter two is an introduction to the report. Chapter three highlights capex trends in the global oil and gas industry. Chapter four provides information on capex trends in the upstream, midstream and downstream sectors. Chapter five provides analysis of the capex trend throughout the regions of North America, Asia- Pacific, the Middle East and Africa, Europe, and South and Central America. Chapter six provides an analysis of the capex trends of national, integrated and independent oil and gas companies. Chapter seven provides an analysis of the major planned oil and gas projects in the oil and gas upstream, refining, pipelines, Liquefied Natural Gas and petrochemical sectors. Chapter eight highlights the key factors that will influence global oil and gas capex in Chapter nine is the appendix of the report. Page 9

8 3.3 Global Onshore E&P Capex will Continue to be Higher than Global Offshore E&P Capex in 2013 The global onshore E&P capex will continue to be higher than global offshore E&P capex in The global offshore and onshore E&P capex are expected to be US$XX billion and US$XX billion respectively for The higher global E&P capex for onshore regions against offshore regions is due to several factors such as logistical convenience, comparative ease of use of technology, and increasing development activities for unconventional oil and gas in the onshore regions. In 2013, North America, South and Central America, Europe, and Asia-Pacific are expected to witness higher capex for onshore E&P when compared to offshore E&P. In particular, North America will continue to witness the highest onshore capex in the world due to robust E&P activity in its unconventional oil and gas resources. In 2013, North America is expected to witness an onshore E&P capex of US$XX billion. On the other hand, the Middle East and Africa is the only region in the world where offshore E&P capex is expected to be higher than the onshore E&P capex in Nigeria, Angola and Qatar will lead offshore E&P in the Middle East and Africa in The figure and table below provide the upstream oil and gas capex by offshore and onshore for the period. Figure 6: Oil and Gas Industry, Global, Offshore and Onshore E&P Capex by Region (US$bn), E&P Capex (US$bn) Onshore Offshore Onshore Offshore Onshore Offshore Onshore Offshore Onshore Offshore Asia-Pacific Europe The Middle East and Africa North America South & Central America Source: GlobalData Estimates Table 5: Oil and Gas Industry, Global, Offshore and Onshore E&P Capex (US$bn), Onshore E&P Capex Offshore E&P Capex Source: GlobalData Estimates Page 15

9 4.2 Global Midstream and Downstream Capex is Expected to Witness a Yearover-Year Growth of XX% in 2013 The global midstream and downstream capex is expected to witness an year-over-year growth of XX% in The capex is expected to grow from US$XXbillion in 2012 to US$XXbillion in The capex would be mainly driven by increasing demand for petroleum products in the developing world. In particular, there has been an increase in the midstream and downstream activity in the Middle East, Asia- Pacific, and South and Central America. The global midstream and downstream capex registered a negative growth of -XX% in The capex has been witnessing a positive growth trend since During the period 2010 to 2013, the midstream and downstream capex increased at an AAGR of approximately XX%. The figure and table below provide the trend in global capex on midstream and downstream sector for Figure 9: Global Midstream and Downstream Industry, Capital Expenditure (US$bn,%), Midstream and Downstream Capaex (US$bn) Year-over-year Growth (%) Midstream and Downstream Capex Year-over-year Growth Source: GlobalData Estimates Table 11: Global Midstream and Downstream Industry, Capital Expenditure (US$bn,%), Midstream and Downstream Capex (US$bn) Growth Rate (year-over-year) Source: GlobalData Estimates The refinery segment is expected to account for the majority of the capex in the midstream and downstream sectors in In particular, the Middle East and Africa, and Asia-Pacific are expected the drive the global refining capex over the next year. The countries in these regions, such as China, India, Saudi Arabia, Iran, Iraq, Indonesia and Malaysia, are planning major refining capacity additions in the near term, which in turn will drive the refining capex. Page 21

10 6.1 National Oil Companies In 2013, the total capex of NOCs is expected to be US$XX billion. The capex of NOCs would increase from US$XX billion in 2012 to US$XX billion in 2013, a growth of XX%. Some of the NOCs that are expected to witness the highest capex in 2013 include Petrobras, OAO Gazprom, and Petroleos Mexicanos. Petrobras has announced a capex plan of US$XX billion for The capex of Petrobras will decrease from US$XX billion in 2012 to US$XX billion in 2013, a decline of -XX%. In total the company plans to invest approximately US$XX billion during the period 2012 to 2016 under its Business Plan. E&P would account for majority of this investment The figure below shows Petrobras planned investment by segment during the period Figure 17: Petrobras, Planned Investments by Segment (%), Biofuels Distribution Petrochemical Corporate Gas and Energy Downstream E&P Source: Petrobras, 2012 In its business plan, Petrobras has allocated around 60% of its planned investments for E&P, where it plans to invest around US$XX billion. Petrobras has allocated the vast majority of those funds, US$XX billion, to Brazil, of which US$XX billion is for exploration, US$XX billion is for production and US$XX billion is for infrastructure development. Petrobras is focusing its efforts on exploration in the postsalt layers and production in the pre-salt areas in offshore Brazil. The company has allocated around US$XX billion for exploration in the post-salt layer and around US$XX billion for production in the pre-salt layer. Besides this, the company also aims to invest US$XX billion in production in the post-salt areas. OAO Gazprom has announced its plan to invest a total of US$XX billion in 2013, which is equivalent to the 2012 levels. On the other hand, the capex of Petroleos Mexicanos is expected to increase from US$XX billion in 2012 to US$XX billion in 2013, an increase of XX%. Page 29

11 9 Appendix 9.1 Market Definition Data is taken from oil and gas ministry websites, company websites and oil and gas related news journals. The pipelines covered in the report are trunk pipelines. Distribution and gathering pipelines are not considered in the report. The region of the pipeline is the region in which the start point of the pipeline is situated. The refining capacity of every company is equity-weighted where the company holds a direct (complete or partial) equity ownership. All the capacities given in this report are annual capacities taken on December 31 of every year and have been rounded off to one decimal point. The latest equity stakes have been assumed to remain the same until and unless explicitly mentioned by the company. The equity stakes of assets are taken from company news items, press releases and other forwardlooking statements issued by companies/ministries. 9.2 Abbreviations AAGR: Average Annual Growth Rate Bcf: Billion cubic feet Capex: Capital expenditure CBM: DoC: coalbed methane Declaration of Commerciality E&P: Exploration and Production FPSO: Floating Production, Storage and Offloading vessel FEED: Front End Engineering Design IOC: Km: LNG: M&A: Integrated Oil Company Kilometers Liquefied Natural Gas Mergers and acquisitions Mmtpa: Million metric tons per Annum Mmt: Million Metric Tons NOCs: National Oil Companies OPEC: Organization of Petroleum Exporting Countries GoM: WT: y-o-y: The US Gulf of Mexico West Texas Intermediate Year-over-year Page 47

12 9.3 Sources BP Plc (2012). Statistical Review. Available from: [Accessed on November 6, 2012]. Eni (2012). Kazakhstan says ConocoPhillips to sell Kashagan stake. Available via: Petrobras (2012) Business Plan. Available from: [Accessed on December 7, 2012]. Total E&P Canada Ltd (2012). Voyageur Upgrader. Total E&P Canada Ltd. Available from: [Accessed on September 26, 2012] Total S.A. (2005). Major Upstream Projects in Nigeria. Total S.A. Available from: [Accessed May 29, 2012]. 9.4 Methodology GlobalData s dedicated research and analysis teams consist of experienced professionals with marketing, market research and consulting backgrounds in the energy industry, and advanced statistical expertise. GlobalData adheres to the codes of practice of the Market Research Society ( and the Strategic and Competitive Intelligence Professionals ( All GlobalData databases are continuously updated and revised Coverage The objective of updating GlobalData s coverage is to ensure that it represents the most up-to-date vision of the industry possible. Changes to the industry taxonomy are built on the basis of extensive research of company, association and competitor sources. Company coverage is based on three key factors: market capitalization, revenues and media attention/innovation/market potential. An exhaustive search of 56 member exchanges is conducted and companies are prioritized on the basis of their market capitalization The estimated revenues of all major companies, including private and governmental, are gathered and used to prioritize coverage Companies which are making the news, or which are of particular interest due to their innovative approach, are prioritized GlobalData aims to cover all major news events and deals in the energy industry, updated on a daily basis. The coverage is further streamlined and strengthened with additional inputs from GlobalData s expert panel (see below). Page 48

13 9.4.2 Secondary Research The research process begins with exhaustive secondary research on internal and external sources being carried out to source qualitative and quantitative information relating to each market. The secondary research sources that are typically referred to include, but are not limited to: Company websites, annual reports, financial reports, broker reports, investor presentations and US Securities and Exchanges Commission (SEC) filings Market trade journals and other literature Internal and external proprietary databases National government documents, statistical databases and market reports News articles, press releases and web-casts specific to the companies operating in the market Primary Research GlobalData conducts hundreds of primary interviews each year with industry participants and commentators in order to validate its data and analysis. A typical research interview fulfills the following functions: It provides first-hand information on the market size, market trends, growth trends, competitive landscape, and future outlook It helps in validating and strengthening the secondary research findings It further develops the analysis team s expertise and market understanding Primary research involves interactions and telephone interviews, as well as face-to-face Interviews for each market, category, segment and sub-segment across geographies. 9.6 Disclaimer All Rights Reserved. No part of this publication June be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GlobalData. Page 49