Market Outlook on the Deepwater Subsea Sector: Challenges ... richard.pdfII. Global Macroeconomic...
Transcript of Market Outlook on the Deepwater Subsea Sector: Challenges ... richard.pdfII. Global Macroeconomic...
Market Outlook on the Deepwater Subsea Sector
Marine Richard, Associate Analyst
6th February 2014
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
a) Global Overview
b) Brazil
c) Gulf of Mexico
d) West Africa
e) Asia
f) Eastern Mediterranean & East Africa
VI. Disclaimer
Table of Contents
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Introduction to Infield Systems
SECTION I
Geographic Locations A globally recognised oil & gas consultancy with a dedicated international team of cross-sector specialists
4
Key Global Personnel
c.40 energy professionals – global footprint
Office Locations
London
Aberdeen
Houston
Head Office
Regional Office John Ferentinos (Senior Analyst)
London [email protected] +44 207 423 5036
James Hall (Director) London
[email protected] +44 207 423 5024
Steve Adams (International Sales Manager) Aberdeen
[email protected] +44 122 425 8150
Luke Davis (Senior Analyst) London
[email protected] +44 207 423 5023
Gregory Brown (Transaction Services Manager) London
[email protected] +44 207 423 5031
Marine Richard (Associate Analyst) London
[email protected] +44 207 423 0
Image courtesy of FMC Technologies Inc.
Products & Services A leading offshore oil and gas and associated services consultancy
Source: Infield Systems Limited, company websites 6
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
Global Macroeconomic Overview
SECTION I
2014 Oil Price Outlook
Brent Oil Price Forecast (Annual Average)
Brent Trading Range
Brent prices will likely fall slightly from their 2013 average of $108/bbl to about $104/bbl in 2014
Sources: Infield Systems; EIA Petroleum and Other Liquids Database; Bernstein Research 8
• 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
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Feb/11 Jun/11 Sep/11 Jan/12 May/12 Sep/12 Jan/13 May/13 Sep/13
$/b
bl
BRENT
Supply Responses
Demand Responses
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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$/b
bl
Brent Oil Price
Long-term Gas Price Dynamics
0 2 4 6 8 10 12 14 16 18
US
UK
Germany
India
Brazil
China
Japan
$/MMBtu
2020 2013
Global Gas Price Forecast
Gas Price in Key Regions
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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
$/m
mB
tu
US (NYMEX) UK (NBP) Japan (LNG)
Gas prices will likely continue to rise in the US and fall gradually in the rest of the world by 2020
Sources: Infield Systems; Historical data workbook (BP Statistical Review of World Energy 2013); Bloomberg 9
• 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 shut-downs in Japan
‐ European gas prices have stayed somewhere in the middle
• 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
‐ $13.9/mmBtu in Japan
• We anticipate that the divergence in regional gas prices will narrow gradually by the decade end
• However, a fully traded global gas market remains unlikely by the decade end
‐ The gas trade remains highly illiquid
‐ Price premiums in Asia will likely remain in the long-run
Global Offshore Capex
SECTION II
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20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Pipeline Platform Subsea Completion Control Line Single Point Mooring
Capex (US$m) by Infrastructure Type
Subsea Capex (US$m) by Equipment Type
Capex split (%) by Infrastructure 2014-2018
Offshore Capex by Infrastructure Type Subsea completions are expected to account for 22% of the $650 billion in offshore Capex in 2014-2018
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• US$650 billion total industry Capex 2014-2018
‐ 8.2% CAGR
‐ 62% increase on 2009-2013
• US$140 billion subsea Capex
‐ 10.7% CAGR
‐ Fastest growing segment
‐ Doubling in Capex compared to the last five years
Pipeline 42%
Platform 30%
Subsea Completion
22%
Control Line 4%
Single Point Mooring 2%
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10,000
15,000
20,000
25,000
30,000
35,000
40,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Satellite Well Manifold Templated Well Plem Template Others
0%
20%
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100%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
0-99 100-499 500-999 1000-1499 >1499
Subsea Tree Installations by Water Depth
Subsea Tree Units (%) by Water Depth 2014-2018
0-99 10%
100-499 32%
500-999 16%
1000-1499 17%
>1499 25%
Subsea Tree Capex (US$m) by Water Depth
Subsea Tree Installations and Capex by Water Depth Deepwater trees account for 58% of units but 84% of Capex of all subsea trees in 2014-2018
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Subsea Tree Capex (%) by Water Depth 2014-2018
0%
20%
40%
60%
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100%
2009 2010 2011 2012 2013 2014 2015 2016 2017 20180-99 100-499 500-999 1000-1499 >1499
0-99 3%
100-499 13% 500-999
10%
1000-1499 23%
>1499 51%
Subsea Market Overview
SECTION III
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
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0
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Africa Asia Australasia Europe Latin America Middle East & Caspian Sea North America
Deepwater Subsea Tree Awards by Manufacturer by end Q3 2013
FMC dominated the GoM and Africa, whilst Aker Solutions and Aker found success in Brazil
Latin America: 188
North America: 77
Africa: 112
Middle East & Caspian Sea: 3
Europe: 24 Global manufacturers’ market shares 2013: 411 subsea tree awards
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Asia: 15
Aker Solutions
29%
OneSubsea 25%
FMC 41%
GE O&G 7%
Aker Solutions 25%
OneSubsea 11%
FMC 55%
GE O&G 9%
OneSubsea 6%
FMC 25%
GE O&G 69%
Aker Solutions
33%
OneSubsea 67%
Aker Solutions 43%
OneSubsea 31%
FMC 26%
Aker Solutions 3%
OneSubsea 20%
FMC 77%
OneSubsea 100%
Deepwater Subsea Market Forecast
SECTION IV
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Africa Asia Australasia Europe Latin America Middle East & Caspian Sea North America
Subsea Installations by Region
Subsea Installations (%) by Region 2014-2018
Africa 37%
Asia 11%
Australasia 2%
Europe 4%
Latin America 24%
Middle East & Caspian Sea
2%
North America
20%
Subsea Installations (%) by Operator 2014-2018
Global Deepwater Subsea Tree Installations Forecast Up to 2,000 deepwater subsea installations are expected globally in the 2014-2018 timeframe
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• 2,000 deepwater subsea equipment installations in 2014-2018
‐ Doubling in installations from 2009-2013
‐ 300-500 new installations per year
• Deepwater installation activity and Capex led by Africa, Latin America and North America
• US$115 billion Capex in 2014-2018
‐ Doubling in Capex from 2009-2013
‐ Roughly same regional split as installations
Petrobras 22%
Total 12%
BP 9% Shell
8%
Chevron 8%
ExxonMobil 6%
Eni 4%
Others 31%
Brazil Subsea Installations by Operator
Brazil Subsea Installations (%) by Water Depth 2009-2018
Petrobras’ Market Capitalisation
Brazil Brazil is a strong market for subsea installations but Petrobras faces investment and local content challenges
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• 450 deepwater subsea installations in 2014-2018
‐ 23% increase on 2009-2013
• 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 2015
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Petrobras Shell Chevron Queiroz Galvao
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n
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
0-99 100-499 500-999 1000-1499 >1499
GoM Subsea Installations by Country
GoM Subsea Installations by Water Depth
GoM Subsea Installations (%) by Operator 2014-2018
Gulf of Mexico The Gulf of Mexico is a strong opportunity for the subsea market, with 400 installations in 2014-2018
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• 400 deepwater subsea installations in 2014-2018
‐ 63% increase on 2009-2013
• Key operators are IOCs and Independents
‐ 4 tree installations per development (average)
• Regulatory reforms in Mexico
‐ Positive signs
‐ Will depend on second stage legislation (2015)
‐ Likely to impact installations later on
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
USA Mexico
Shell 16%
BP 11%
Anadarko 11%
Hess 9%
Chevron 8%
LLOG 8%
ExxonMobil 8%
Others 29%
0%
20%
40%
60%
80%
100%
0-99 100-499 500-999 1000-1499 >1499
West Africa Subsea Installations by Country
Subsea Installations (%) by Country 2014-2018
Subsea Installations (%) by Operator 2014-2018
West Africa Angola and Nigeria are major drivers of the African subsea market, with Ghana and Congo also promising
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• 670 subsea installations in 2014-2018
‐ 70% increase on 2009-2013
‐ 70% 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
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Angola Nigeria Ghana Congo (Brazzaville) Equatorial Guinea Ivory Coast
Angola 52%
Nigeria 18%
Ghana 12%
Congo (Brazzaville)
8%
Equatorial Guinea
5%
Ivory Coast 5%
Total 34%
BP 13%
ExxonMobil 12%
Eni 10%
Tullow 9%
Chevron 7%
Noble 3% Others
12%
Asia Subsea Installations by Country
Asia Subsea Installations (%) by Country 2014-2018
Asia Subsea Installations (%) by Operator 2014-2018
Asia Asia is a small but growing market for deepwater subsea trees, led primarily by activity in Malaysia and India
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• 200 subsea installations in 2014-2018
‐ 3 x increase on 2009-2013
‐ Malaysia, India and Indonesia dominate
• Main drivers are rising domestic demand & LNG exports
• Deepwater expected to represent 63% market share in 2014-2018, up from 39% in 2009-2013
• Key operators are Chevron, Shell, Murphy and Reliance
‐ 3.9 tree installations per development (average)
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Malaysia India Indonesia China (PRC) Brunei Philippines Sri Lanka
Malaysia 39%
India 30%
Indonesia 16%
China (PRC) 7%
Brunei 5%
Philippines 2% Sri Lanka 1%
Shell 22%
Murphy 20%
Reliance 17%
Chevron 14%
ONGC 13%
Husky 7%
Others 7%
Eastern Mediterranean & East Africa
Middle East Subsea Installations by Country
E. Africa Subsea Installations by Country
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 2014-2018
• 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 2014-2018
• Dependent on LNG export terminals
‐ Potential for cost overruns
‐ Competition from other regions
‐ But dry gas 100km from shore
• Likely to see impacts of increased installations and Capex beyond the forecast period
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2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Mozambique Tanzania
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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Azerbaijan Israel
Disclaimer
SECTION V
Disclaimer
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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 2014