Fundamental Oil Market Outlook

Transcription

1 Fundamental Oil Market Outlook ICE Forum David Wech JBC Energy GmbH 13 November 2012 Research - Energy Studies - Consulting - Training 21 November 2012 Slide 1

2 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. 21 November 2012 Slide 2

3 Overview Oil Demand Supply Trends incl. Shale Special Balance & Oil Price Refining Industry Trends 21 November 2012 Slide 3

4 Oil Demand World Oil Demand Growth 2012 & Forecast Changes [million b/d] JBC Energy EIA OPEC IEA Source: OPEC, IEA, EIA, JBC Energy Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Apr-12 Jun-12 Aug-12 Oct November 2012 Slide 4

5 Oil Demand 3,500 3,000 2,500 2,000 World Oil Demand Growth by Products ['000 b/d] Gas Oil/Diesel Jet/Kero Gasoline Fuel Oil LPG Naphtha Other Products 1,500 1, ,000-1,500-2, November 2012 Slide 5

6 Supply Trends North America (US, Mexico, Canada) Oil Supply* History and Forecasts [million b/d] JBC IEA Source: IEA, JBC Energy *does not contain US biofuels 11 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan November 2012 Slide 6

7 Supply Trends Rest Non-OPEC Oil Supply* History and Forecasts [million b/d] 38 JBC IEA Source: IEA, JBC Energy *does not contain Brazil biofuels 34 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan November 2012 Slide 7

8 Supply Trends Africa Total Oil Supply History IEA and Forecast [million b/d] 12.0 IEA JBC ? Source: IEA, JBC Energy Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan November 2012 Slide 8

9 Supply Trends 1.2 Non-OPEC Crude Supply Growth [million b/d] US Crude Other Non-OPEC Canada Total Non-OPEC November 2012 Slide 9

10 Supply Trends Shale Production Decline of Bakken Wells over Months after Start-up [%] 100% 90% O&GJ decline curve of the average Bakken well assessed with Dec 2011 well data Adapted decline curve with Aug 2012 production data to match JBC Energy model* 80% 70% 60% After 6 months, output of the average well reaches LESS than 50% of the first full month of production 50% 40% 30% There are strong indications that the average performance of Bakken wells weakens over time, i.e. wells drilled in 2012 show a stronger decline compared to wells drilled in 2011 and before. 20% 10% 0% *Same average decline curve is assumed for all new wells coming online since January Model is fitted to total actual Bakken production. Source: O&G Journal, JBC calculations November 2012 Slide 10

11 Supply Trends Shale Bakken* Production Rate [count, b/d] 5,000 4,500 Technical limit seems to be reached with about 140 b/d , Producing wells 3,500 Production per well - right scale 140 3,000 2, months moving average - right scale Average production rates per well: 2009: : : , , , Application of horizontal drilling and multistage hydraulic fracturing boosted Bakken output. Source: North Dakota State Government, JBC Energy calculations *includes Bakken, Sanish, Three Forks, Bakken/Three Forks Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan November 2012 Slide 11

12 Supply Trends Shale Production Outlook for Bakken Shale Oil [million b/d] ,000 15,000 12,000 9,000 6,000 3,000 0 Jan- 05 Historical Bakken Production Fitted Production / Base Case Low Estimate: Decreasing Productivity High Estimate: 1.5 million b/d by 2017 Number of Bakken Active Wells [count] Historical Base Case + 8,500 wells Low Estimate + 4,600 wells High Estimate + 12,700 wells Jan- 07 Jan- 09 Jan- 11 Jan- 13 Jan- 15 Jan- 17 Due to high decline rates, additional 12,700 active wells would be needed to reach 1.5 million b/d on annual average by Source: NDIC, JBC Energy calculations Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan November 2012 Slide 12

13 Supply Trends Shale 400 Eagle Ford Shale Crude Production by Field ['000 b/d] 350 Briscoe Ranch Eagleville Eagleville (Eagle Ford 1) Eagleville (Eagle Ford 2) Source: Texas RRC 0 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul November 2012 Slide 13

14 Supply Trends Forecast Changes Jun '08 vs. Jun '12 - Annual 2012 Average Production 2012 ['000 b/d] 2,000 1,500 1,000 Total Liquids Supply: million b/d Total Crude: million b/d OPEC Crude: million b/d Non-OPEC & OPEC NGLs: million b/d US Liquids Supply: million b/d OPEC Crude Non-OPEC Total Liquids -1,000 Angola Iran Libya Azerbaijan Algeria Sudan Brazil Nigeria Qatar UAE Indonesia Iraq Australia Syria Yemen Venezuela Kuwait China Mexico Oman Russia Colombia Saudi Arabia United States 21 November 2012 Slide 14

15 Supply Trends Reserve estimates [trillion barrels] JBC Produced Other Conventional Oil Deepwater Heavy Oil & Bitumen CTL Biofuels MENA EOR Arctic Oil Shales GTL We are basing our reserve estimate on the highest feasible production volume over the next 30 years. When looking into realistic production scenarios the reserves are actually much less than originally suggested. IEA Source: IEA, JBC Energy Estimates November 2012 Slide 15

16 Cost to produce one barrel of oil Balance & Oil Price 140 Marginal Cost of Oil Production [mbpd, $/bbl] US Ethanol US Tight Oil Biodiesel Europe 70 US Deepwater 60 Oil Sands North Sea WAF Offshore Brazil Ethanol Source: JBC Energy Quantity of Oil Supplied / Demanded 21 November 2012 Slide 16

17 Balance & Oil Price Global Liquids Supply [million b/d] Other Supply US Ethanol Supply Ceiling* US Tight Oil Cushion Global Demand * We assume that Saudi Arabia, Kuwait and UAE will not produce more than 10 million b/d, 2.8 million b/d and 3.2 million b/d on annual average November 2012 Slide 17

18 Balance & Oil Price Saudi Arabia Crude Oil Output & Crude Oil Output Capacity [million b/d] Crude Oil Output Crude Oil Output Capacity Production ceiling under normal circumstances: 10 million b/d annual average Output for long term optimisation of resources: million b/d Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan November 2012 Slide 18

19 Balance & Oil Price Source: Platts, JBC Energy World Oil Price Forecast [$/bbl] Dtd. Brent Urals RCMB WTI 1st Month Dubai 1st Month 60 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul November 2012 Slide 19

20 Refining Industry Trends Global Cracking Margins [$/bbl] NWE Crude Basket Cracking Margin Standard (100%) Brent Cracking Margin Asian Crude Basket Cracking Margin Standard (100%) Dubai Cracking Margin USGC Crude Basket Cracking Margin Standard (100%) LLS Cracking Margin Source: JBC Energy calculations using H-Comet, Platts and McQuilling Jun- 12 Jul- 12 Aug- 12 Sep- 12 Oct- 12 Nov- 12 Jun- 12 Jul- 12 Aug- 12 Sep- 12 Oct- 12 Nov- 12 Jun- 12 Jul- 12 Aug- 12 Sep- 12 Oct- 12 Nov November 2012 Slide 20

21 Refining Industry Trends 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 November 2012 Slide 21

22 Refining Margin [$/bbl] Refining Industry Trends Global Refining Capacity & Margins by Configuration ( vs ) Hydrocracking FCC & Visbreaking Coking FCC Visbreaking Capacity as of Europe complex set-up Europe medium Average crude intake unchanged at 72,000 mbpd 6.00 US complex set-up US simple Margin calculation based on typical European crude slate (too light for coking) and European product prices 0.00 Source: JBC Energy Europe simple 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 Global Refining Capacity ['000 b/d] 21 November 2012 Slide 22

23 Refining Industry Trends 2,000 CDU Net-Additions East & West of Suez ['000 b/d] 2,500 1,500 2,000 1, ,500 1, ,000 West of Suez C&S America -1,000-1,500 North America Africa -1,500 East of Suez MIDDLE EAST FSU East Europe Non-OECD Asia OECD ASIA -2, , November 2012 Slide 23

24 Refining Industry Trends 6.0 Middle East - Balance of Selected Products [million b/d] Yanbu Saudi Arabia Jubail Saudi Arabia Ruwais UEA Jizan Saudi Arabia LPG Naphtha Gasoline Kero/Jet Gas Oil Residual/Fuel Oil November 2012 Slide 24

25 Refining Industry Trends 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. 21 November 2012

26 Refining Industry Trends Spain - Oil Products Market & Refining Sector 1,800 Oil Demand by Product ['000 b/d] 300 Product Balance & Ref Util. ['000 b/d, %] 100% 1, % 1, % 1, % 1, % % % % LPG Naphtha 20% Gasoline Gas Oil/Diesel Jet/Kero Fuel Oil 10% Other Products Ref. Utilisation - Right Scale % 21 November 2012

27 Refining Industry Trends Refinery Utilisation Rates vs. Total Product Net-Imports in Various Asian Countries [%, '000 b/d] 100% 1,000 90% % % % 0 50% % 30% 20% China India Japan South Korea Indonesia Philippines Australia Pakistan , November 2012 Slide 27

28 Refining Industry Trends US Gas Oil/Diesel Exports by Destination ['000 b/d] 1,200 1,100 1,000 Europe Canada & Mexico Central & South America Other Markets Jan-July 2012 vs Jan-July 2011: Total Gas Oil/Diesel Exports: +237,000 b/d (+30.9%) Total gas oil/diesel includes distillates, biomass and other renewable diesel Source: EIA Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan November 2012 Slide 28

29 Refining Industry Trends 1,600 Asian Refining Industry Developments and Crude Imports ['000 b/d] 1,400 1,200 1, Asian CDU Net Additions Crude Intake Change Crude Import Change November 2012 Slide 29

30 Refining Industry Trends 6.00 Asian Premium Versus MED [$/bbl] 5.00 NB: Assumes all Med buyers pay on the basis of the loading-month-average of ICE BWAVE for the loading month Arab Light Asia (FOB) vs. Arab Light Med (FOB) Source: Saudi Aramco, Platts, ICE Yearly Average Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan November 2012 Slide 30

31 Refining Industry Trends Singapore Cracking Margins: 3-Mth Rolling Average [$/bbl] JBC Basket Cracking Margin 3-Mth Rolling Avg Dubai Cracking Margin 3-Mth Rolling Avg Source: JBC Energy calculations based on Platts data Nov-08 Mar-09 Jul-09 Nov-09 Mar-10 Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Nov November 2012 Slide 31

32 Refining Industry Trends Saudi Arabian Crude Market [million b/d] 11.0 Total Crude Supply Domestic Use - Right Scale Exports November 2012 Slide 32

33 Refining Industry Trends US Crude Imports from West Africa and the Middle East [million b/d, %] Imports from the Middle East are increasing while WAF flows have collapsed 30% 27% 24% 21% 18% 15% 12% Source: EIA, JBC Energy Mideast-3 (Saudi Arabia, Iraq, Kuwait) WAF-3 (Nigeria, Angola, Congo-Brazz) % US Crud Imports from WAF-3 -RHS % US Crude Imports from Mideast-3 -RHS Aug-Oct '12 figures are preliminary Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 9% 6% 3% 21 November 2012 Slide 33

34 Refining Industry Trends Angola Nigeria Major West African Crude Flows to OECD Europe [mbpd] More Nigerian crude is being sent to Europe now than in 2011, a year in which the bulk of Libyan barrels were not on the market Source: IEA (YTD) 21 November 2012 Slide 34

35 Refining Industry Trends Major Interregional Crude Oil Flows /2012/2013/2015 ['000 b/d] North America South America Europe Africa Middle East FSU East Non-OECD Asia OECD Asia Source: JBC Energy estimates Flows >500,000 b/d displayed 21 November 2012 Slide 35

36 Refining Industry Trends Global Refining Spare Capacity [million b/d] Theoretical Spare Capacity Assuming 100% of existing capacity can be operated across all regions at all times Maintenance Offline due to average level of maintenance and outages Seasonal Demand Adjustment Capacity that exists only to deal with seasonal peaks in demand Europe FSU EAST ASIA MIDDLE EAST AFRICA North America CENTRAL & SOUTH AMERICA Uneconomic/out dated capacity Capacity not realistically available to be ramped up to meet external demand Realistically Available Spare Capacity Capacity available on reasonably short notice, capable of meeting external demand based on economic incentives Source: JBC Energy Calculations November 2012 Slide 36

37 Refining Industry Trends 3.0 Liquids Supply Growth [million b/d] Other Non-OPEC Crude OPEC Crude US Crude NGLs Biofuels & Other Liquids November 2012 Slide 37

38 Thank You! Research Energy Studies Consulting Training 21 November 2012 Slide 38