Head of Business Development, JBC Energy. Mr. Pögl has been using his vast knowledge of energy markets to advise national

Transcription

1 Alexander Pögl Head of Business Development, JBC Energy Mr. Pögl has been using his vast knowledge of energy markets to advise national and international oil and gas companies as well as government-related agencies around the world for many years. He is regularly leading high level energy study projects for JBC Energy clients, is heavily involved in the company s consulting projects and has participated in several international benchmarking audits concerning energy trading and risk management issues. Aside from his research work at JBC Energy, Mr. Pögl is a regular trainer in JBC Energy s Academy passing on his insights in the energy markets to the company s clients. On a daily basis, Mr. Pögl contributes to nearly all of JBC Energy s reports and uses his farreaching knowledge of the energy industry to guide both seasoned and junior analysts alike. Prior to his work within JBC Energy, Mr. Pögl has spent several years in the field of international project management.

2 Fundamental Outlook around Brent & Gasoil For ICE Futures Forum 8 February 2012 Alexander Pögl JBC Energy GmbH January 2012 Research - Energy Studies - Consulting - Training

3 Disclaimer All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements (including those depicted in graphical form) are statements of future expectations that are based on JBC Energy s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things statements expressing JBC Energy s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as anticipate, believe, could, estimate, expect, intend, may, plan, objectives, outlook, probably, project, will, forecast, predict, think, seek, target, risks, goals, should and similar terms and phrases. All forward-looking statements contained in this speech/presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers/audience should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this presentation. Neither JBC Energy nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this speech/presentation. Any persons acting on information contained in this presentation does so solely at their own risk. JBC Energy is not responsible for the accuracy of data collected from external sources and will not be held liable for any errors or omissions in facts or analysis contained in this presentation. 8 February 2012 Slide 2

4 Overview Changing Crude Balances Inter-regional Crude Arbitrage Flows Refining Industry Outlook Implications for Gasoil/Diesel Arbitrage Flows 8 February 2012 Slide 3

5 Crude Oil - Overview Nymex WTI and ICE Brent (FL) [$/bbl] Nymex WTI Vs ICE Brent FL - right scale ICE Brent FL Nymex WTI FL Source: CME Group, ICE Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan February 2012 Slide 4

6 Crude Oil - Overview Underperforming Current Crude Output vs. Suppliers Expectations 2011 ['000 b/d] Egypt Azerbaijan Brazil Venezuela Iran Iraq China Nigeria Angola Yemen Syria Sudan Libya Annual Average vs. expected Current Figures vs. expected Source: JBC Energy estimates Political instability Maintenance on ACG fields Petrobras missing output targets Exports dropping Lack of investment / sanctions Falling behind growth targets PL 19-3 shut-down due to oil spill Militant attacks and piracy Field maintenance High decline rates EU sanctions Sudan blocking South Sudan exports February 2012

7 Crude Oil - Overview World Oil Supply Outlook for 2012 [million b/d] Assuming IEA Demand Growth Supply Disruptions in 2011 World Oil Supply Maximum Supply Potential - Tight Scenario Maximum Supply Potential - Base Case 1.6 million b/d supply cushion 350,000 b/d supply cushion Tight Scenario: Only Saudi Arabia has spare capacity available, where the amount they are willing to bring on stream on an annual average basis is limited to 500,000 b/d. No Libyan-style outage assumed, but high decline rates and prolonged problems in MENA countries and lower than expected growth rates February 2012 Slide 6

8 Crude Oil - Iran Strait of Hormuz Strategic Background Info Shipping Lanes Iranian missile lauch sites Iranian military facilities Iran-Oman maritime border Iran Jazireh-ye Qeshm Jazireh-ye Sirri Abu Musa Islands seized by Iran Oman Strait of Hormuz Shipping Lanes 2 miles wide each U.A.E. Source: Various 8 February 2012 Slide 7

9 Crude Oil - Iran Iranian Crude Exports by Destination ['000 b/d] 2,200 2,000 1,800 Other France South Africa 5% 4% 3% 2% 24% 1,600 Greece 7% 1,400 1,200 1, Spain Turkey Italy 9% Korea Japan 15% 200 India 10% China 0 Total Iranian Export Source: IEA, National Statistics, JBC Energy Calculations 10% 11% 8 February 2012 Slide 8

10 Crude Oil - Iran (Potential) Crude Flows to Med/Black Sea by Country of Origin [million b/d] Russia Algeria Azerbaijan Egypt Iraq Kazakhstan Syria Tunisia Libya Saudi Arabia Iran Sources: IEA, JBC Energy estimates Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 8 February 2012 Slide 9

11 Crude Oil - Iran Crude Flows vs. Refinery Intake in Med/Black Sea [million b/d] Total Crude Inflows to Med/Black Sea Total Crude Intake of Med 5 Countries Med 5 includes: France, Greece, Italy, Turkey, Spain Such a massive prospective stockbuild is unlikely. Instead Med refiners may slash crude imports by up to 400,000 b/d in Feb-Apr. Iranian flows may be on the chopping block Sources: IEA, JBC Energy estimates Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 8 February 2012 Slide 10

12 Crude Oil - World Major Inter-Regional Crude Flows ['000 b/d] Mideast to N. America , (est.) 2, (est.) 1,970 WAF to N. America , (est.) 1, (est.) 1,450 LatAm to N. America , (est.) 3, (est.) 3,300 Russia to N. America (est.) (est.) 290 Mideast to Europe , (est.) 2, (est.) 1,930 WAF to Europe (est.) 1, (est.) 960 LatAm to Europe (est.) (est.) 360 Russia to Europe , (est.) 3, (est.) 3,340 Mideast to Selected Asia , (est.) 11, (est.) 10,950 WAF to Asia , (est.) 1, (est.) 1,980 LatAm to Asia (est.) (est.) 870 Russia to Asia (est.) (est.) 740 Source: JBC Energy, IEA, Reuters 8 February 2012 Slide 11

13 Crude Oil - World North Sea Liquids Production [million b/d, %] 7.0 Norway UK 2% Others (NL, GER, DEN) Change y-o-y - right scale 6.0 0% 5.0-2% 4.0-4% 3.0-6% 2.0-8% % % 8 February 2012 Slide 12

14 Crude Oil - Russia Russian Crude Export Capacity & Crude Exports [million b/d] BPS-2 ESPO Other routes BPS-1 Transneft's share in CPC (31%) Omsk-Pavlodar Western pipelines (Druzhba, Belarus, Ukraine) Russian Crude Exports - Old Base Case Russian Crude Exports - Current Base Case Source: JBC Energy SuDeP, Argus February 2012 Slide 13

15 Crude Oil - Russia Russian Products Demand vs Refinery Throughput ['000 b/d] 6,000 5,000 Refinery Throughput Total Products Demand Refinery Utilisation 100% 90% 4,000 80% 3,000 70% 2,000 60% 1,000 50% % 8 February 2012 Slide 14

16 Crude Oil - Russia 7 6 Russian Crude Exports by Direction [mbpd] West (Druzhba, Belarus, Ukraine) North (Baltic & Arctic & River Petersburg) South (Black Sea, Caspian) East (Pacific, China, Kazakhstan) Old Crude Export Forecast February 2012 Slide 15

17 Crude Oil - Asia Asian Crude Requirements [million b/d] Asian crude requirements will outstrip total regional and Middle Eastern exports from In 2012, however, Middle Eastern exports to Asia may drop as more West African crude is attracted into the region due to falling Atlantic Basin requirements Asian Net Crude Imports Russian Exports to the East Global Middle Eastern Exports Extraregional Crude Requirements -Right Scale February 2012 Slide 16

18 Crude Oil - Prices 5.00 Global Crude Oil Price Developments [$/bbl] January 2012 to December 2013 figures are JBC Energy projections Source: JBC Energy, Platts Dubai (1st Mth) vs Dtd Brent WTI Cushing (1st Mth) vs Dtd Brent Urals (RCMB) vs Dtd Brent Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 8 February 2012

19 Crude Oil Global Flows Major Interregional Crude Oil Flows /2015 ['000 b/d] Europe FSU East North America Middle East Non-OECD Asia OECD Asia South America Africa OECD Asia Source: JBC Energy estimates Flows >500,000 b/d displayed 8 February 2012 Slide 18

20 Demand Global Trends Regional Oil Demand Growth by Products: [million b/d] 5,000 4,000 LPG Naphtha Gasoline Jet/Kero Gas Oil/Diesel Fuel Oil Other Products 3,000 2,000 1, ,000-2,000 Non-OECD Asia Middle East Central & South America Africa FSU East Non-OECD Europe OECD Asia OECD Europe North America 8 February 2012 Slide 19

21 Demand Europe Sector-by-Sector Oil Demand Growth in Europe ['000 b/d] Germany UK France Italy Spain Belgium Transport Residential Agriculture Power Petchem Industry Bunker Refinery Fuel Other Netherlands Poland Turkey Rest of Europe February 2012

22 Global Downstream Capacity Expansions 100,000 90,000 80,000 70,000 60,000 50,000 40,000 World Conversion and CDU Capacity Development ['000 b/d] CDU FCC Hydro Cracking Coking Average Annual Crude Supply Growth: 598,000 b/d Average Annual NGL & Other Liquide Growth: 280,000 b/d 14,000 12,000 10,000 8,000 6,000 25% Average Annual Crude Supply Growth: 290,000 b/d Average Annual NGL & Other Liquide Growth: 330,000 b/d 27% 30,000 19% 4,000 20,000 10,000 21% 2,000 37% 0 60% Total Conversion Capacity 2007 Total CDU Capacity Conversion Capacity Growth CDU Capacity Growth February 2012

23 Global Downstream Capacity Expansions Light/Heavy Product Spreads as Percentage of Regional Benchmark [%] 100% 90% %L/H spread to Oman/Dubai %L/H spread to WTI Cushing %L/H spread to Dtd. Brent 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: Platts L/H product spreads calculated as: (gas oil + gasoline)/2-hsfo Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 8 February 2012 Slide 22

24 Global Downstream Capacity Expansions North America OECD Asia Europe Other Regions World Surplus Refining Capacity [million b/d, %] For this chart, surplus capacity is defined as capacity that is not being used on top of a spare capacity treshold of 10%-15% (depending on the region) February 2012 Slide 23

25 Atlantic Basin Downstream Consolidation Outlook Refining Capacity and Utilisation [million b/d, %] Other Expected Net- Additions US East Coast Hovensa % 84% 83% 2.0 Petroplus 70 82% 60 81% % 40 79% % Capacity Europe + North America Capacity World 77% Refinery Utilisation Europe + North America Refinery Utilisation World % 75% 8 February 2012 Slide 24

26 European Downstream Consolidation Outlook Europe: Refinery Industry Consolidation 210 Grangemouth 50% PetroChina 270 Shell Stanlow --> Essar Oil 130 Murphy Milford Haven terminal? 210 Chevron Pembroke --> Valero 163 Coryton Petroplus 220 Total Lindsey 240 (-86) Gonfreville 105 Berre shut down 117 Teesside terminal 107 Antwerp temp. shut down 162 Petit Couronne temp. shut down dismantling 260 Wilhelmshaven Hestya Energy terminal 150 Vlissingen 45% Lukoil 160 Dunkirk dismantling 68 Cressier temp. shut down 93 Heide Shell-->Klesch 85 Reichstett terminal 90 Cremona terminal 100 Harburg Shell-->Nynas 480 Ruhr Oel 50% Rosneft 80 Gothenburg Shell-->St1 220 Schwedt 12.5% Gazprom Neft??? 110 Ingolstadt Petroplus 210 Gdansk??? 178 Ceska Rafinerska 32.5 % Gazprom Neft??? 200 Mazeikiu??? 160 Lisichansk? TNK-BP 320 Mozyr 43% Slavneft 70 OMV Pitesti shutdown/terminal 210 Lavera 50% PetroChina 150 NIS 56% Gazprom Neft Asian Company Acquired Stake [b/d] Russian Company Acquired Stake [b/d] 690,000 2,748, Bosanski Brod Zarubezhneft 120 Burgas 70 Odessa 50 Ploiesti Lukoil (Proposed) Sale of Refinery [b/d] Shutdown [b/d] 833,000 1,224, ERG Priolo 60% Lukoil Capacity Downsizing [b/d] 86,000 8 February 2012 Slide 25

27 Gasoil/Diesel Balance - Europe Europe's Gas Oil/Diesel Balance ['000 b/d] 1, France Italy Poland Turkey Other Utilisation, Petroplus Shutdown - right scale Germany Netherlands Spain UK Refinery Utilisation- right scale 90% 85% 0 80% % -1,000 70% -1,500 Net refinery consolidation of 500,000 b/d in 2010/11 taken into account % 8 February 2012 Slide 26

28 Gasoil/Diesel Balance - Europe Europe Gas Oil/Diesel Demand by Sulphur Content [million b/d] ppm 50 ppm 350 ppm 1000 ppm 3000 ppm Source: JBC Energy February 2012 Slide 27

29 Source: JBC Energy estimates Gasoil/Diesel Balance - Europe European ULSD Net-Imports and Supplies ['000 b/d] Net-Imports NW Europe Net-Imports Mediterranean Europe Russian ULSD Russian Off-Spec to Desulphurise US Middle East & Asia Intra-European Desulphurisation Flows ,000 1,500 2,000 2,500 3,000 Potential Maximum ULSD Supplies to Europe ['000 b/d] ,000 1,500 2,000 2,500 3,000 8 February 2012 Slide 28

30 Gasoil/Diesel Balance - Competition Product Net-Imports of Core Refining Products ['000 b/d] 1,500 Middle East 1,500 Asia 1,000 Gasoline Jet/Kero 1,000 Gas Oil/Diesel Fuel Oil ,000-1,000-1, , February 2012 Slide 29

31 Gasoil/Diesel Balance - Competition Turkey - Gas Oil/Diesel Imports by Retailers ['000 b/d] Bulgaria Romania (Jan - Sept) UK Netherlands US Israel Retailer - ULSD Greece Italy Retailer - HS Reliance Malta India Russia Other Source: EPDK February 2012 Slide 30

32 Gasoil/Diesel Balance - Competition US Gas Oil/Diesel Trade Flows ['000 b/d] 1,300 1,200 1,100 1, Gas Oil/Diesel Net-Imports - Right Scale Total Gas Oil/Diesel Fuel Exports Total Gas Oil/Diesel Fuel Imports 1, ,000-1, Source: EIA Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11-1,400-1,600 8 February 2012 Slide 31

33 Gasoil/Diesel Balance - Competition Gasoline and Gas Oil/Diesel Product Balance ['000 b/d, %] 3,000 35% 2,000 33% 1,000 31% 0 29% -1,000 27% -2,000-3,000 Europe - Gasoline US - Gasoline Europe - Gas Oil/Diesel Rest of World - Gasoline US - Gas Oil/Diesel Rest of World - Gas Oil/Diesel US - Gas Oil/Diesel Yield % 23% 8 February 2012 Slide 32

34 Gasoil/Diesel Balance - Competition Russian Oil Export Duties According to New Law [% of crude export duty] Light products (old scheme) Light products (Dec 10 scheme) Crude Light products (Aug 11 scheme) Heavy products (old scheme) Heavy products (Dec 10 scheme) Gasoline & naphtha (Aug 11 scheme) Heavy products (Aug 11 scheme) Crude 30 Source: Ministry of Energy Base Prior to October 2011 Currently From January 2015 (Urals price per bbl - $25)* % +$4 65% 60% 60% Gasoline and naphtha Crude duty 90% 90% 90% Clean products (other light and middle distillates) Dirty products (fuel oil, bitumen, lubricants, etc.) Source: Russian Government New Oil Export Duties Crude duty 67% 66% 66% Crude duty 47% 66% 100% 8 February 2012 Slide 33

35 Gasoil/Diesel Balance - Competition Impact of Crude & Product Export Duties on Russian Refinery Margins [$/bbl] 2.00 December 2010 legislation August 2011 legislation legislation 2011 legislation legislation 2012 legislation Simple Refiners Complex Refiners x-axis reads as: marginal rate of crude duty / clean product duty as share of crude duty / dirty product duty as share of crude duty Source: JBC Energy estimates Starting October 2011 Starting /71.5/ /67/ /64/ /60/60 60/66/66 60/66-90/66 60/66-90/100 60/66/100 8 February 2012 Slide 34

36 Gasoil/Diesel Balance - Competition Russian Product Balance ['000 b/d] 1,400 1,200 Fuel Oil Jet/Kero Naphtha Gas Oil Gasoline 1, February 2012 Slide 35

37 Gasoil/Diesel Balance - Competition Diesel Supply Potential 2016 from main non-european Suppliers ['000 bpd] The US refining sector has proved to be highly competitive. The expansion of the Latin American refining sector in the coming years will redirect further volumes to Europe. If US utilisation rates in 2016 were 83% instead of the projected 78% and distillate yields were 1pp higher, another 450,000 b/d of diesel would be freed for exports. Americas Source:JBC Energy estimates Russia Diesel supplies to Europe (mostly Med) from the listed suppliers are expected to rise by anywhere between 0.4 and 1 million b/d over the next 5-10 years. Saudi Arabia (Saudi Aramco) India (Reliance) Russian refining sector will be massively upgraded over the next 3-7 years and most gas oil volumes will be desulphurised domestically. The considered Yugpipeline would also push more volumes towards the Med. Total might bring its diesel share in the Jubail refinery to the Med - equivalent roughly to 20% of the overall Middle Eastern diesel length in While our base-case expectation is that Asian diesel supplies to Europe will remain roughly stable, a strong Indian refining investment program and higher supplies from South Korea could easily double volumes. 8 February 2012 Slide 36

38 Thank You! Research Energy Studies Consulting Training 8 February 2012 Slide 37