post recession offshore - oil & gas industry

Presented By:

AFTAB HASAN - CEOMaritime Management Company (MMC)

www.mmc-global.com

Post Recession Offshore - Oil & Gas

Industry outlook

Table of Contents

1

2

3

Global Reserves Verses Consumption

Global Proven Oil & Gas Reserves

4

Conclusion

5

6

Cyclic Nature of Oil Price & Global Economic Downturn

Global Oil & Gas Offshore

Outlook 2011

7

8

Financial Implications for Offshore Industry

Outlook for Offshore Energy Vessels

Increasing Global Energy Consumption

Factors influencing the Offshore – Oil & Gas market


World's "proven" oil reserves, according to BP Statistical data, split betweenMiddle East, North Africa, and the Remainder of the World


The economic downturn at the end of 2008 had a negative impact on demand for crude oil with the International Energy Agency and OPEC revising downwards their forecasts for oil demand growth.

Global Reserves Verses

Consumption

Factors Influencing Offshore – Oil & Gas Market

Increase in spending activitiesMergers and acquisitions taking placeCapital expenditure is an average downInvestment climate is improvingMajor reforms in Brazil's energy sectorGlobal offshore drilling spending has

increasedShale plays a key role in unconventional

investment in energy sectorGlobal energy investments to restart their

stalled projects

Increasing Global Energy Consumption

Source: Annual Energy Review (2011)

Due to Global financial crisis at the end of 2008 we have observed a global economicdownturn in 2009.

As per International Monetary Fund, global output fell by an estimated 0.6% in 2009.

Due to imbalance in supply & demand for oil we observed a sharp decrease in oil pricefrom US$140 to US$40 per barrel price levels in the first quarter of 2009.

The oil and gas sector is building up slowly as world markets pull themselves out ofrecession.

We have observed that the industry is cyclical in nature and subject to fluctuations indemand.

With the demand for crude oil increasing, especially from China and India, as well asthe need to offset falling output due to natural field depletion, oil and gas companieshave plans to increase investments in 2012.

Amid macro-economic uncertainty and market volatility, analysts are putting theindustry on a promising-to-bullish track for 2012 as oil prices remain solid, rig countsrise and the offshore industry turns the tide from the doldrums it was in a year ago.

Cyclic Nature of Oil Price & Global

Economic Downturn

Globally Offshore Industry Activity is Growing

Financial Implications for Offshore

Industry

Industry is Investing in Deepwater, Deep Wells & Horizontal Wells


Industry

Overall Fleet Utilization Does Not Suggest Additional Rig Requirement


Industry


Industry

New Build Future Deliveries will initiate some Rationalization


Industry

Source: ODS Petrodata

Energy Vessels – Market Cautiously Optimistic

• Oil companies throughout the world have been re-evaluating energy developments given acollapse in oil prices, which has made some projects uneconomic.

• Integrated Oil & Gas Companies are showing an increasing reliance on very large projects toreplace the more diverse existing production base

• Demand still strong for E&P Rigs and (OSV) Offshore Support Vessels but market is moving withcautious

• Lack of enthusiasm to commit to additional new-builds. Market has seen a few cancellations &slippage

• National Oil Companies have strategic interests that differ from listed companies

• Shortage of semi-submersibles

• Surplus of Jack-ups

• Continued financial turmoil, prevailing low oil prices and economic recessions are impactingactivity levels

• Even if companies take a bullish outlook on a recovery in oil demand growth, declining revenuesand unavailability of credit will limit their ability to invest in new build projects


FPSO Deliveries – Global


0

2

4

6

8

10

12

14

16

18

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Nu

mb

er

of

FP

SO

Deli

veri

es

Others

Japan

South Korea

China

Malaysia

Singapore

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Global FPSO Deliveries 10 8 8 12 16 13 8 8 9 10

Source: Frost & Sullivan


Source: MODEC

Gendalo-

Gandang

FPSO

Indonesia

Crux Field Liquids

Project

FPSO

Australia

First liquids by mid-

2011

Dhirubhai 2 & 3

FPSOs

(India)

Shipyard: Jurong,

Singapore

Chevron Texaco

Block A FPSO

(Cambodia)

Carigali Hess Early

Gas Production Unit

(Malaysia)

Vietsovpetro FSO-6

(Vietnam)

Premier Blackbird &

Dua FPSO

(Vietnam)KEI Kangean FPSO

(Indonesia)

INPEX Ichthys

FPSO/FSO

(Australia)

Potential FPSO Projects



39

45

2008 2009

Average

Number of

Contracted

Jack-ups

Lower demand in 2009:

12 Jack-ups surplus in the SEA

Jack-up market; Up from 6 during

2008

Southeast Asia

Global New Building Forecast – Jack Up Drilling Rigs

0

5

10

15

20

25

30

35

40

Jack-Ups 36 25 1 0

2009 2010 2011 2012

Existing Fleet (Up to

End 2008)

445

Near Term Jack-up market

remains uncertain



Global New Building Forecast – Semi-submersible Drilling Rigs

Southeast Asia

Depth > 4000 Ft

Number of Deepwater Semis: 82

0

5

10

15

20

25

Semi-Submersibles 25 10 9 6

2009 2010 2011 2012

Existing Fleet

(Upto End 2008)

178



Global New Building Forecast – Drill Ships

Southeast Asia

Depth > 4000 Ft

Number of Deepwater Drillships: 37

0

2

4

6

8

10

12

14

Drill Ships 8 14 14 7

2009 2010 2011 2012

Existing Fleet

(Upto End 2008)

43

Major Driver: New gas discoveries in the region have necessitated deployment of deepwater drilling equipment



Global New Building Forecast – Offshore Support Vessels (OSV)

0

500

1,000

1,500

2,000

2003 501 1,499 508 926 438 239

2004 518 1,556 516 955 451 240

2005 551 1,616 525 1,020 450 240

2006 582 1,673 534 1,101 468 243

2007 615 1,753 549 1,199 489 246

2008 656 1,897 559 1,340 551 251

Crew /

Supply

Vessel

PSV OSV AHTSSuppor

t/safety

Pipe

Lay

PSV – Platform Supply

Vessel

OSV – Offshore

Tug/Supply Ship

Global Fleet



Global Shipyard Deliveries – Offshore Support Vessels (OSV)

PSV – Platform Supply

Vessel

OSV – Offshore

Tug/Supply Ship

0

50

100

150

200

2009 25 61 7 157 37 3

2010 39 79 8 97 40 8

2011 33 75 6 55 33 7

2012 46 81 7 41 24 5

Crew /

Supply

Vessel

PSV OSV AHTSSupport/

safetyPipe Lay



Global Shipyard Deliveries – Offshore Support Vessels (OSV)

Offshore Tug/Supply Ship

China

50%

Others

50%

AHTSChina

16%

Others

84%

Support/SafetyChina

4%

Others

96%

Pipe Lay

China

48%

Others

52%

Platform Supply VesselChina

12%

Others

88%

Crew Supply

VesselChina

3%

Others

97%

Percentage Comparison of Global Shipyard Deliveries with China Shipyard (2009 – 2012)

• 75% of the earth's surface is covered by oceans and today 60% of the

world's petroleum production comes from offshore operations in

waters of more than half the coastal nations on earth so it is no

surprise that as onshore oil and gas reserves will deplete exploration

and production activities will extend into offshore basins which has

potential proven reserves.

• This in turn will create opportunities for E &P Companies, Oilfield

Equipments Manufacturers, Shipyards, Oil and Gas Suppliers, Human

Capital, Professionals, Technology and Assets to turn the tide from the

doldrums it was in a year ago.

• Worldwide Offshore Industry is on a promising-to-bullish track.

• Energy Demand wants to grow long terms (China – India – Elsewhere)

• Offshore Accounts for one third of oil production which is up

significantly from pass.

Conclusion

Managing Risks For Success

THANK YOU

post recession offshore - oil & gas industry

Documents

offshore industry industry

crude oil

oil prices

world global proven

offshore industry source

offshore energy vessels

oil demand growth

offshore industryoutlook